Diamond Fields Resources Inc. has closed the private placement previously announced on May 9, 2018.
On May 24, 2018, the TSX Venture Exchange accepted the company’s private placement of 6,472,496 common shares at a price of 12.5 cents per share for gross proceeds of $809,062. In addition, on May 25, 2018, the TSX-V approved the issuance of 14,078,170 common shares at a deemed price of 12.5 cents per share to settle a total of $1,759,771 in outstanding debt owing to its major shareholder, Spirit Resources Sarl.
Accordingly, on May 29, 2018, the company issued a total of 20,550,666 common shares at 12.5 cents per share, having an aggregate value of $2,568,833. These shares are subject to a hold period under applicable Canadian securities laws expiring on Sept. 30, 2018, and will be subject to such further restrictions on resale as may apply under applicable foreign securities laws.
Proceeds raised in connection with the financing will be used for the company’s Beravina project and for general working capital purposes. Following completion of the financing and the issuance of the debt shares, the company has eliminated all of its long-term debt and has cash of approximately $1.9-million.
Sybrand van der Spuy, chief executive officer, and Jean Lindberg Charles, chief financial officer, participated in the financing directly, and Albert Gourley, non-executive chairman, participated in the financing indirectly through a wholly owned corporation, by subscribing for an aggregate of 2.47 million financing shares.
The financing, together with the debt settlement, was considered a related-party transaction under Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions) as three insiders of the company subscribed for financing shares, and the debt shares were issued to Spirit, the company’s major shareholder. The issuance of the financing shares and debt shares was 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 constituted 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 exceeded $2.5-million.
Prior to the financing, Spirit owned, directly and/or indirectly, a total of 38,917,153 common shares of the company, representing 82.2 per cent of the company’s 47,344,996 then issued and outstanding share capital, together with a warrant entitling Spirit to purchase up to 10,666,667 common shares at 12.5 cents per share, exercisable on or before Sept. 22, 2021. On closing of the financing, Spirit now owns 52,995,323 common shares, representing 78.1 per cent of the company’s current 67,895,662 issued and outstanding share capital, as well as the warrant.
