17 May 2017
Vancouver, B.C., May 17, 2017 – Kennady Diamonds Inc. (“Kennady Diamonds”, the “Company”) (TSX-V: KDI) today announced the closing of the previously announced non-brokered private placement of flow-through and non flow-through common shares, for aggregate gross proceeds of $12,035,422.93 (the “Offering”).
The Company has issued 1,538,461 flow-through common shares at a price of $4.38 per share and 1,629,835 non flow-through common shares at a price of $3.25 per share. The shares are subject to a four month hold period, expiring September 18, 2017.
Proceeds of the Offering will be used in part to fund the Company’s 2017 exploration and evaluation program on the Kennady North Project, and for general corporate purposes.
Finders’ fees in the aggregate amount of $172,230, and an advisory fee in the amount of $135,000, were paid on a portion of the offering.
In connection with the Offering, the Company issued 615,385 non flow-through common shares to Bottin (International) Investments Ltd., a related party to the Company. The Company has determined that exemptions from the various requirements of TSX Venture Exchange Policy 5.9 and Multilateral Instrument 61-101 (“MI 61-101”) are available for the issuance of the common shares to Bottin. The Company relied on Section 5.5(c) of MI 61-101 for an exemption from the formal valuation requirement on the basis that the transaction is a distribution of securities for cash, and Section 5.7(b) of MI 61-101 for an exemption from the minority approval requirement as the fair market value of the transaction is not more than $2,500,000. The Company did file a material change report disclosing the related party transaction on May 1, 2017, less than 21 days in advance of the closing of the Offering. The Company considers the shorter period reasonable and necessary in the circumstances as the Company needs the proceeds of the private placement for its ongoing operations.