CanAm Announces Delay in Filing of Annual Financial Statements and Provides Financial Update

CALGARY, AB / ACCESSWIRE / May 1, 2015 / CanAm Coal Corp. (TSXV: COE) (“CanAm” or the “Company”) announces that it has not filed its audited consolidated financial statements for the year ended December 31, 2014 and its related management’s discussion and analysis and management certifications (collectively, the “Required Filings”) on or before the prescribed deadline of April 30, 2015.

In this context, the Company intends to make an application to the applicable regulators under National Policy 12-203 – Cease Trade Orders for Continuous Disclosure Defaults (“NP 12-203”) requesting that a management cease trade order be imposed in respect of this late filing, but there is no guarantee that such an order will be granted. If the application for a management cease trade order is not made or is made and not approved, the securities of the Company may become subject to a general cease trade order in accordance with NP 12-203.

The Company has been working on efforts to refinance its debt obligations and these efforts have resulted in the Company being unable to file the Required Filings within the prescribed time. The Company is working diligently through the various issues in order to expedite the finalization of the Required Filings, and the Company is targeting to file the Required Filings as soon as possible but no later than May 20, 2015.

The Company is also reporting that it is currently in default under a number of its debt obligations and covenants. Under its 12% secured debenture with a maturity date of May 23, 2018, the Company has not paid interest due on April 30, 2015. The Company has a 10 business day cure period to remedy this situation and has been in discussions with representatives of the debentureholders on this matter. Under its equipment lending facility with a US financial institution, Birmingham Coal & Coke (“BCC”), the Company’s Alabama subsidiary, is in breach on certain covenants including its fixed charge coverage ratio. The Company is discussing with the lender a remedy to the situation. Under its 9.5% debenture with a maturity date of Aug 7, 2016, the Company is in breach of its debt to equity covenant and is seeking a waiver for such breach.

Although the Company continues to work on a refinancing plan in order to improve its overall financial position and to deal with a number of upcoming debt obligations, including a US$1.5 million promissory note that is due by BCC on May 31, 2015, there can be no guarantee that it will be successful. The Company is also exploring other strategic options.

In the event a management cease trade order is granted, the Company intends to satisfy the provisions of the alternative information guidelines under NP 12-203 by issuing biweekly default status reports in the form of news releases so long as it remains in default of the filing requirements set out above.

For Further Information:

CanAm Corporate Office:
Jos De Smedt, CEO
Tel: 403.262.3797
Toll Free: 1.877.262.5888
Email: jdesmedt@canamcoal.com

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This news release may contain certain forward-looking information including management’s and the Board of Directors’ assessment of the Company’s ability to complete the Required Filings, the availability of the funds required to do so, the submission by the Company of an application for a management cease trade order, a favorable ruling by applicable securities regulators upon the Company’s application for a management cease trade order (in the event such an application is made) or for a cease trade order revocation in the event a cease trade order is instituted, anticipated defaults or events of defaults under certain of the Company’s debt obligations and results thereof and the availability of alternative refinancings. 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 forward-looking 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 certain additional forward-looking information and a description of risk factors that may cause actual results to differ materially from such certain 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.

SOURCE: CanAm Coal Corp. 

ReleaseID: 428415