News release dated Aug 8 CanAm Completes Transaction to Acquire an Additional 30% of Birmingham Coal & Coke and Related Private Placement
CALGARY, ALBERTA--(Marketwire - Aug. 8, 2012) - Further to a press release dated July 27, 2012, CanAm Coal Corp. (TSX VENTURE:COE) (OTCQX:COECF) ("CanAm" or the "Company") is pleased to announce that CanAm through its wholly owned subsidiary, Radar USA Hold Corp. ("Radar USA"), has completed the acquisition of an additional 30% in equity interests in the capital of Birmingham Coal & Coke Co., Inc and Cahaba Contracting & Reclamation LLC (collectively referred to as "BCC") (the "Transaction") from Thomas A. Lewis, Robert A. Lewis and Robert Wayne Bass ("Vendors"). CanAm retains an option to acquire the remaining 20% of BCC before May 9, 2016.
Additionally, the Company has closed a non-brokered private placement offering (the "Offering") of 13,165 units ("Units") at a price of CDN$1,000 (and/or its US dollar equivalent) per Unit for total proceeds of CDN$13,165,000. Each Unit is comprised of a $1,000 principal amount of 9.5% non-convertible and unsecured debentures ("Debentures"), 1,250 2012 series A common share purchase warrants ("Series A Warrants") and 1,000 2012 series B common share purchase warrants ("Series B Warrants"). The Debentures have a term of four years with a partial repayment feature that is triggered upon the achievement of a certain production level. The Series A Warrants have an exercise price of CDN
.20 and a term of four years, and the Series B Warrants have an exercise price of CDN
.25 and a term of four years.
The aggregate purchase price of the acquisition is US$11,505,682, which will be settled by US$5,505,682 in cash and the issuance of Debentures in the Offering in an aggregate principal amount of US$6,000,000 together with 7,500,000 Series A Warrants and 6,000,000 Series B Warrants. As previously disclosed, the exercise of the Series A Warrants and Series B Warrants issued to the Vendors is subject to disinterested shareholder approval which the Company intends to seek at its next annual general meeting. The remainder of the private placement will be used for general corporate purposes.
Certain directors and officers of the Company have subscribed under the Offering for CDN$860,000 aggregate principal amount Debentures, an aggregate of 1.1 million Series A Warrants and an aggregate of 0.9 million Series B Warrants. In relation to the insiders who participated in the Offering, the Company has determined that there are exemptions available from the various requirements of TSX-V Policy 5.9 for formal valuation and minority shareholder approval.
A finder's fee of 7% or CDN$14,000 was paid under the Offering to Wolverton Securities for CDN$200,000 aggregate principal amount Debentures.
The Transaction and the Offering were completed upon receipt of conditional TSX-V approval. The Warrants issued under the Offering are subject to a four month hold period that will expire on December 8, 2012.
At the close of the Transaction, the Company's Alabama mine operations will be comprised of:
4 operating mines
4 mines in development
Annual productive capacity of 1 million tons
Permits and leases covering approximately 5,000 acres of land
Workforce of approximately 140 employees
"We are excited about completing this transaction as this will allow us to fully integrate all of CanAm's Alabama mining operations and further achieve synergies across our mines. Our integrated team will also be better positioned for continued growth through current asset expansion and the development of additional opportunities in Alabama", said Robert A. Lewis, President of Birmingham Coal & Coke Company, Inc.