Diamond Fields International Ltd.’s private placement reported in Stockwatch on Oct. 24, 2005, was revised to $6,096,735, which was accepted for filing by the Toronto Stock Exchange on Nov. 4, 2005. The first tranche of $4,878,735 has been released to the company, with the balance to be released upon receipt of shareholder approval, as set out below.
In accordance with the rules of the TSX, the first tranche of the private placement closed on Nov. 7, 2005, with the issuance and release of a total of 24,393,676 units at 20 cents per unit (the PP units), each PP unit consisting of one common share and one transferable share purchase warrant, each warrant entitling the holder to purchase one additional common share at a price of 40 cents per share on or before June 2, 2008.
The second tranche of 6.09 million units for proceeds of $1,218,000 will be released upon receipt of requisite shareholder approvals at the company’s annual general meeting scheduled for Nov. 16, 2005. The second tranche includes the indirect subscription of a total of 2.5 million units by Jean-Raymond Boulle, an insider of the company who, before giving effect to the private placement, holds directly or indirectly approximately 19.5 per cent of the company’s issued and outstanding common shares and approximately 2.70 per cent of the company’s outstanding warrants. After giving effect to the private placement in full, Mr. Boulle will hold directly or indirectly approximately 16.4 per cent of the company’s issued and outstanding common shares and approximately 6.08 per cent of the company’s outstanding warrants. The portion of the private placement subscribed to by Mr. Boulle is considered to be a related-party transaction as defined under Ontario Securities Commission Rule 61-501. In connection with Mr. Boulle’s subscription, DFI is relying on the exemptions from the formal valuation and minority shareholder approval requirements of the rule on the basis that the fair market value of the securities issued to Mr. Boulle is less than 25 per cent of DFI’s market capitalization, as determined by all of the directors of the company in accordance with the rule.
In connection with the private placement, the company paid as finders’ fees a total of $221,894 cash, issued 354,000 units on the same terms as the PP units, and issued 621,500 compensation warrants on the same terms as the warrants. All of the shares issued or issuable under the private placement will be subject to a hold period under applicable Canadian securities laws expiring on March 8, 2006, and will be subject to such further restrictions on resale as may apply under applicable foreign securities laws.
Proceeds will be used toward paying down outstanding debt, maintaining and advancing the company’s exploration projects, and for general working capital.
