News Column

CanAm to Hold Annual General and Special Shareholders Meeting on July 25, 2014 and Provides Update on Terms of Previously Announced Debt to Equity Conversion Transaction

July 15, 2014



ENP Newswire - 15 July 2014

Release date- 11072014 - Calgary, AB - CanAm Coal Corp. (COE TSX-V) has set its Annual General and Special Meeting of Shareholders for July 25, 2014.

In addition to the general matters to be acted upon at an annual meeting, shareholders will also be requested to consider a 'Debt to Equity Conversion' and the creation of a new 'Control Person' of the Company.

Debt to Equity Conversion

In order to meet the requirements of a covenant put in place in April 2014 by the Company's US equipment lender and as part of a broader strategy to improve the financial position of the Company, the Board is seeking disinterested shareholder approval respecting the repurchase of $7.2 million in outstanding 2016 debentures held by related parties (also referred to as 'Insiders') in exchange for common shares of the Company.

The Company wishes to clarify that the price at which the shares will be issued has been set as the greater of (a) $0.06 per common share and (b) a 20% premium of the greater of the 10-day VWAP (1) or the market price at the date of the issuance of such shares. Based on the Company's current share price (at yesterday's close of $0.03), Insiders will be converting at a minimum of $0.06 or a 100% premium to current market.

Also, the Company has entertained discussions with 2016 debenture holders who are not related parties. As a result of these discussions, the Company is anticipating that it will convert up to an additional $1.5 million of 2016 debentures at the greater of (a) $0.05 per common share and (b) the greater of the 10-day VWAP(1) or the market price at the date of the issuance of such shares.

With these conversions (including the maximum non-insider conversion), the debt to equity ratio (2) improves substantially; from 52:1 to 4:1.

Based on 10 day volume weighted average price immediately prior to issuance

Defined as current assets less current liabilities less long-term portion of debenture and equipment financing debt. Equity defined as Shareholders Equity and Non-controlling interest.

Creation of a new Control Person

Following the Debt to Equity Conversion transaction, a new control person, as defined by the TSXV, may be created whereby a number of individuals may hold more than 20% of the outstanding voting shares of the Company. The Board is seeking disinterested shareholder approval for the creation of this new 'control person'.

All of the above matters have been described in the Company's Management Information Circular which has been mailed to shareholders and which is available on the Company's website.

Company President and CEO, Jos De Smedt commented: 'The Debt to Equity Conversion transaction is required in order to meet a banking covenant put in place in April by our US equipment lender. The conversion will significantly improve the financial position of our Company by achieving a more sustainable debt to equity ratio and capital structure. This will better position us to continue to execute on our strategy of growing our production capacity and of expanding our reserve base of high quality coals.'

The Company will be providing updates on its contracting position and second quarter volumes in the coming days.

Contact:

Jos De Smedt

President & CEO

CanAm Coal Corp.

Tel: 403.262.3797

Toll Free: 1.877.262.5888

Email: jdesmedt@canamcoal.com

Forward Looking Information and Statements

This news release may contain certain forward-looking information. All statements included herein, other than statements of historical fact, is forward-looking information and such information involves various risks and uncertainties. There can be no assurance that such information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such information.

A description of assumptions used to develop such forward-looking information and a description of risk factors that may cause actual results to differ materially from forward-looking information can be found in the Company's disclosure documents on the SEDAR website at www.sedar.com. The Company does not undertake to update any forward-looking information except in accordance with applicable securities laws.


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Source: ENP Newswire


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