On Oct. 31, 2012,
the Toronto Stock Exchange (TSX) conditionally accepted the
repricing and one-year extension of a convertible debenture in the
principal amount of $151,357 that was issued to an
insider of Diamond Fields International Ltd.
on Oct. 19, 2010 (refer to news release dated
Oct. 19, 2010, for particulars).
The debenture has been extended to mature on Sept. 27, 2013, with 8-per-cent
interest payable semi-annually, and will be convertible into 1,513,570
units at a reduced conversion price of 10 cents per unit, each unit
comprising one common share and one-half transferable share purchase
warrant, each whole debenture warrant being
exercisable into one common share at an exercise price of 25 cents per
share on or before Sept. 27, 2013, so that a total of 756,785
common shares may be issued on exercise of the debenture warrant.
As consideration for extending the debenture, the company has issued a
share purchase warrant to the insider entitling
it to purchase up to 890,335 common shares, exercisable at six cents per
share, on or before Sept. 27, 2013.
The bonus warrant shares, if and when issued, will be subject to a hold
period under applicable Canadian securities laws expiring on March 8,
2013, and will be subject to such further restrictions on resale as may
apply under applicable foreign securities laws.
The insider, as a related party, may acquire up to an additional
3,160,690 common shares in the capital stock of the company (inclusive
of all shares that may be issued on conversion of the debenture and on
exercise of the debenture warrant and bonus warrant), which will
increase its pro rata shareholdings in the company. All of the independent directors of the company,
acting in good faith, have determined that the fair market value of the
securities being issued and the consideration paid are reasonable, and,
with the value of the related-party transaction being less than 25 per cent of
the company’s market capitalization, the transaction is exempt from the formal
valuation and minority shareholder approval requirements of the Ontario
Securities Commission’s Rule 61-501.
