CanAm Coal Announces Proposed $14 million Brokered Private Placement Financing

CALGARY, AB / May 1, , 2014 / CanAm Coal Corp. (COE:TSX-V) ("CanAm" or the "Company") is pleased to announce that the Company has engaged Richardson GMP Limited ("Richardson GMP") to act as broker with respect to a proposed "commercially reasonable efforts" $14 million private placement.

Richardson GMP will sell by private placement on a commercially reasonable efforts basis up to 14,000 units ("Units") of the Company at a price of $1,000 per unit for gross proceeds of up to $14 million (the "Offering").

Each Unit is comprised of a $1,000 principal amount of 12% non-convertible secured debentures ("Debentures") and 670 common share purchase warrants ("Warrants"). Each Warrant entitles the holder to purchase one common share of CanAm ("Common Share") at a price equal to the volume weighted average price ("VWAP Price") plus 30%, for a period of 4 years from the closing date. The VWAP price is the amount that is the volume weighted closing price of the Common Shares on the TSX Venture Exchange for the 10 day period ending on the business day prior to the closing date of the Offering (the "Closing Date").

The Debentures will mature 48 months from the date of issuance of the Debentures and will bear interest at a rate of 12 percent per year, payable semi-annually. The Debentures will include certain provisions for repayment of the principal. Starting on the 25th month from the day on which the Debentures are issued, the principal amount of the Debentures will be repaid at a rate of $200,000 per month, payable quarterly, with such payments being made pro rata on all outstanding Debentures. The Debentures will also have optional early redemption provisions in favour of CanAm starting in month 13.

CanAm intends to use the net proceeds from the Offering for the repayment of its 10% and 9.5% debentures that mature on May 8 and May 9, 2014, respectively, and for general working capital purposes.

Richardson GMP will be paid a broker's fee and receive broker's warrants in compensation for acting as the broker in connection with the Offering.

The closing date of the Offering is expected to occur on or about May 9, 2014 and is subject to receipt of all necessary regulatory approvals including approval of the TSX Venture Exchange.

Jos De Smedt, President & CEO commented on the overall financing package announced herewith and yesterday: "The impact of the additional equipment financing and the extension of the equipment financing loan term, which were announced yesterday, together with a successful refinancing of the May debentures and other measures taken by the Company will reduce the working capital deficit of the Company by approximately $17 million. In addition, our commitment, as part of the equipment refinancing package, to a debt to equity conversion with respect to our 2012, 9.5% debentures maturing in 2016, will reduce long-term debt by a minimum of $6.5 million. Combined these measures will put us in a significantly improved financial position and provides us with the necessary financial flexibility to enable us to execute on our business plan."

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any state in the United States in which such offer, solicitation or sale would be unlawful. The securities referred to herein have not been and will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

For Further Information:

CanAm Corporate Office:

Jos De Smedt, President & CEO

Tel: 403.262.3797

Toll Free: 1.877.262.5888


Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Advisory Respecting Forward-Looking Statements:

This news release contains certain "forward-looking information and statements" within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends", "confident", "might" and similar expressions are intended to identify forward-looking information or statements. In particular, this new release contains forward looking statements pertaining to: the terms of the Offering and the Units to be issued thereunder; the anticipated closing date of the Offering; the amount of proceeds from the Offering; and the use of the proceeds from the Offering. Various assumptions were used in drawing the conclusions contained in the forward-looking statements throughout this news release.

The forward-looking information and statements included in this news release are not guarantees of future performance and should not be unduly relied upon. Forward-looking statements reflect management's current beliefs and assumptions, based on information currently available to management. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, many of which are beyond the control of the Company. Among the material factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: that the information is of a preliminary nature and may be subject to further adjustment; failure of the proposed Offering to proceed on the terms agreed to; failure to obtain the required approvals for the Offering; the failure to sell all Units offered pursuant to the Offering; failure to convert the required amount of debentures pursuant to the terms of the U.S. debt facility; as well as those factors discussed in or referred to under the heading "Risk and Uncertainties" in the Company's Management's Discussion & Analysis dated November 26, 2013 available at Such information and statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information or statements.

The Company cautions that the foregoing list of assumptions, risks and uncertainties is not exhaustive. The forward-looking information and statements contained in this news release speak only as of the date of this news release, and the Company assumes no obligation to publicly update or revise them to reflect new events or circumstances, except as may be required pursuant to applicable securities laws.

SOURCE: CanAm Coal Corp.

Release ID: 42621