Diamond Fields Resources Inc. (DFR) has signed a binding term sheet to raise $1-million in working capital from Albert C. Gourley, non-executive chairman, and its major shareholder, Spirit Resources SARL.
Each lender will subscribe for $100,000 worth of common shares at an issue price of 20 cents per common share and advance the company $400,000 at an interest rate of 10 per cent, repayable on Dec. 31, 2020, giving the company working capital of $1-million in aggregate.
The loan may be repaid earlier in the event that the company and its subsidiaries complete an equity financing or otherwise receive financing; payments or income equal to $1-million; or the company’s Namibian subsidiary receives authorization from the Bank of Namibia to remit not less than $500,000 (U.S.) from Namibia (which the company expects to receive in 2020).
As the lenders are insiders of the company, the loan and the issuance of the common shares will constitute related party transactions within the meaning of TSX Venture Exchange Policy 5.9 and Multilateral Instrument 61-101. The company intends to rely on the exemptions from the valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and (b) and 5.7(1)(a) of MI 61-101 in respect of such insider participation. The material change report in relation to the transactions described herein may be filed less than 21 days before closing as the company intends to complete as soon as is commercially feasible.
The transaction is subject to approval of the TSX Venture Exchange.
The common shares will be subject to a four-month hold period.
About Diamond Fields Resources Inc.
DFR is an exploration and mine development company with assets in Madagascar and Namibia. In Madagascar, DFR is developing the Beravina project in co-operation with Denham Mining Fund LP.
