Diamond Fields Resources Inc. has arranged a private placement for gross proceeds of up to $1-million. Upon receipt of acceptance from the TSX Venture Exchange for the financing, the company will issue up to eight million common shares at a price of 12.5 cents per financing share.
In addition, the company announces, subject to approval by the TSX-V and completion of the financing, that it intends to enter into an agreement with a related party creditor, Spirit Resources SARL, pursuant to which the company plans to issue up to 14,078,170 common shares to settle indebtedness of up to $1,759,771 at a deemed issue price of 12.5 cents per settlement share.
Proceeds raised in connection with the financing will be used to finance the company’s Beravina project and for general working capital purposes.
The financing will be considered a related party transaction under Multilateral Instrument 61-101 — Protection of Minority Security Holders in Special Transactions, as three insiders of the company may, directly and/or indirectly, subscribe for approximately 3.12 million financing shares. The debt settlement will be considered a related party transaction under MI 61-101 as the settlement shares are to be issued to an insider of the company. The issuance of the financing shares and the settlement shares will be exempt from the formal valuation and minority shareholder approval requirements under MI 61-101 (pursuant to subsections 5.5(c) and 5.7(1)(b)) on the basis that each issuance constitutes the distribution of securities of the company for cash consideration and neither the fair market value of the securities distributed to, nor the consideration received from, related parties will exceed $2.5-million. The material change report in relation to the financing and debt settlement may be filed less than 21 days before closing.
