Diamond Fields International Ltd. intends to consolidate its share capital on a one-new-share-for-five-old-share basis, subject to receipt of acceptance from the TSX Venture Exchange. The company does not intend to change its name in connection with the consolidation. The company will disseminate a further news release upon receipt of acceptance from the TSX-V, which will set out the effective date for the consolidation.
The company is also pleased to announce that it has negotiated, subject to acceptance by the TSX-V, a private placement for gross proceeds of $1-million. These funds will be raised by the issuance of 53,333,333 preconsolidated units at a price of 1.875 cents per preconsolidated unit, being a 25-per-cent discount to the current market price. Upon closing of the financing and completion of the consolidation, the company will issue the units on a postconsolidated basis, so that a total of 10,666,667 postconsolidated units will be issued, with each unit consisting of one postconsolidated common share and one share purchase warrant, with each warrant entitling the holder thereof to purchase one additional postconsolidated common share, exercisable for a period of five years from the date of issuance at a price of five cents per postconsolidated share. The units will be issued to Spirit Resources SARL, a private company wholly owned by the company’s controlling shareholder, Jean-Raymond Boulle.
Proceeds raised from the financing will be used toward exploration and development of the company’s recently acquired Beravina zircon project in Madagascar (refer to the company’s news release dated Aug. 15, 2016) and for general working capital.
The financing is expected to close on or about Sept. 15, 2016, and is subject to certain conditions, including, but not limited to, completion of the 1:5 consolidation and receipt of acceptance from the TSX-V to the financing and consolidation.
Related party transaction disclosure
Spirit, as an insider and accordingly a related party, will directly acquire the units, 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 as the financing is necessary, the transaction is designed to improve the financial position of the company, the terms of this related party transaction are reasonable in the circumstances of the company.
Prior to the financing and consolidation, Mr. Boulle owned, directly and indirectly, a total of 141,252,432 preconsolidated common shares of the company, representing 78.4 per cent of the company’s 180,126,009 preconsolidated issued and outstanding share capital. After closing of the financing and completion of the consolidation, Spirit will own (excluding any shares that it may acquire on exercise of the warrants to be issued in connection with the financing) approximately 41,583,819 common shares, representing 84.2 per cent of the company’s then 49,358,535 issued and outstanding share capital.
