VANCOUVER, Jan. 7, 2013 /PRNewswire/ - Diamond Fields International Ltd. (DFI:TSX) ("DFI" or the "Company") is pleased to announce that on November 22, 2012 the Toronto Stock Exchange ("TSX") conditionally accepted a private placement by the issuance of convertible debentures in the total aggregate amount of $650,000 (the "Debentures") to two insiders of the Company, one of whom is the Company's controlling shareholder (the "Insiders"). The issuance of the Debentures was subject to receipt of "disinterested" shareholder approval, which was obtained at the Company's Annual General Meeting held December 20, 2012.
In accordance with the provisions of Subscription Agreements, on January 7, 2013 the Company issued the Debentures, which are for a two year term maturing January 7, 2015, with 8% interest payable semi-annually. The Debentures are convertible into a total of 28,888,889 units (the "Units") at a conversion price of $0.0225 per Unit. Each Unit is comprised of one common share and one share purchase warrant (the "Warrants"), each Warrant entitling the holder to acquire one additional common share (the "Warrant Shares") on or before January 7, 2015 at a price of $0.0315 per Warrant Share.
Any shares that may be issued on conversion of the Debentures or on exercise of the Warrants will be subject to a hold period under applicable Canadian securities laws expiring on May 8, 2013, and will be subject to such further restrictions on resale as may apply under applicable foreign securities laws.
Proceeds of the private placement will be applied towards advancing the Company's exploration projects and for general working capital.
The Insiders, who are accordingly related parties under applicable Canadian securities laws, may acquire up to an additional 28,888,889 common shares in the capital stock of the Company if they convert the Debentures (excluding Warrant Shares), which will increase their pro rata shareholdings in the Company (the "Related Party Transaction"). 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 is reasonable and, as the value of the Related Party Transaction is less than 25% of the Company's market capitalization, the transaction is exempt from the formal valuation and minority shareholder approval requirements of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions.
DIAMOND FIELDS INTERNATIONAL LTD.
SIGNED: Wayne Malouf
Wayne Malouf, Chairman and director
Statements in this release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors identified in Diamond Fields' periodic filings with Canadian Securities Regulators. Such forward-looking information represents management's best judgment based on information currently available. No forward-looking statement can be guaranteed and actual future results may vary materially. Diamond Fields does not assume the obligation to update any forward-looking statement, except as otherwise required by law.
SOURCE Diamond Fields International Ltd.