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VAA-TSX
TORONTO, July 19 /CNW/ - Vaaldiam Resources Ltd. ("Vaaldiam") (TSX-VAA) is pleased to announce that it has entered into an agreement with Canaccord Capital Corporation (the "Underwriter"), which has agreed to purchase, on an underwritten private placement basis, 21,500,000 subscription receipts of the Company (the "Subscription Receipts") at a price of Cdn
.90 per Subscription Receipt (the "Issue Price") for aggregate gross proceeds to Vaaldiam of Cdn$19,350,000 (the "Offering").
Each Subscription Receipt shall be deemed to be exchanged, without payment of any additional consideration and subject to adjustment, for one (1) unit of Vaaldiam (each a "Unit") on the earlier to occur of: (i) the Escrow Release Time (as defined below); and (ii) the Final Escrow Deadline (as defined below), in respect of the Subscription Receipts which remain outstanding after giving effect to the return of the Escrowed Funds (as herein defined) provided for below. Each Unit will be comprised of one common share of the Company (each an "Underlying Share") and one-half of one common share purchase warrant (each whole warrant, an "Underlying Warrant"). Each Underlying Warrant shall entitle the holder thereof to subscribe for one additional common share of the Company (a "Warrant Share") at an exercise price of $1.20 per Warrant Share at any time prior to the day that is 24 months from the Closing Date (as herein defined) of the Offering.
Vaaldiam plans to use the net proceeds of the Offering to advance Vaaldiam's projects, including those proposed to be acquired pursuant to the planned acquisition by the Company of all of the outstanding shares of (i) Elkedra Diamonds NL (the "Elkedra Transaction"), and (ii) Great Western Diamonds Corp. (together with the Elkedra Transaction, the "Acquisitions") and for general corporate working capital purposes. The Acquisitions are described in more detail in the press release of Vaaldiam dated July 3, 2007.
Upon the closing of the Offering, 25% of the gross proceeds of the Offering shall be delivered to Vaaldiam, with the remaining 75% (the "Escrow Ratio") of the gross proceeds of the Offering to be deposited in escrow (the "Escrowed Funds").
The Escrowed Funds will be released from escrow to Vaaldiam (after deducting the applicable Underwriters' commission) immediately following the closing of the Elkedra Transaction (the "Escrow Release Time"), provided that the following conditions (the "Escrow Release Conditions") have been satisfied before the Escrow Release Time:
a) all conditions precedent to the closing of the Elkedra Transaction shall have been satisfied or waived to the satisfaction of the Underwriter, acting reasonably; andb) to the extent required in accordance with the rules of the Toronto Stock Exchange (the "TSX"), the Elkedra Transaction and the issuance of the Units pursuant to the Offering, shall have been approved by the shareholders of Vaaldiam.
In the event that either (i) the Escrow Release Conditions are not satisfied by the Escrow Release Time, or (ii) the closing of the Elkedra Transaction does not occur on before 110 days after the Closing Date (the "Final Escrow Deadline"), the Escrowed Funds, plus any accrued interest earned thereon, shall be returned pro rata to each holder of the Subscription Receipts in exchange for that number of Subscription Receipts held by such holder multiplied by the Escrow Ratio