Diamondhead-Phoenix purchase agreement expires

DIAMONDHEAD — Diamondhead Casino Corporation letter of intent to sell a part of its site on the Mississippi Gulf Coast has expired.

Diamondhead Casino entered into a letter of intent Dec. 10, 2010, to sell 25 acres of its Diamondhead property to Phoenix Gaming and Entertainment, LLC, to be used, in part, for the construction of a casino. The agreement was scheduled to expire April 1, 2011, if no definitive agreement was in place by that date.

Inasmuch as Phoenix has been unable to arrange financing for its proposed project, the letter of intent has expired and the time frame to reach a definitive agreement will not be extended further.

Diamondhead Casino said Phoenix remains interested in reaching a definitive agreement, and the parties would remain in discussion.

Under the letter of intent, Diamondhead Casino was allowed to and did enter into discussions with other interested parties and is currently in discussions with these parties as well.

James Ahearn, who serves as chairman and CEO of Phoenix, said, “Phoenix remains extremely interested in this project and is actively pursuing financing. (Diamondhead Casino) and Phoenix plan to meet in the immediate future to explore additional options in order to accomplish this casino development.”

Diamondhead Casino also reported that it had no plans to modify options to purchase a total of 650,000 shares of common stock held by current or former officers, directors and/or employees of the company, exercisable at a strike price of $2.70 per share, which are due to expire April 13, 2011.

Diamondhead Casino owns, through its wholly-owned subsidiary, Mississippi Gaming Corporation, approximately 404 acres of land in Diamondhead. The property fronts Interstate 10 for approximately two miles and the Bay of St. Louis for approximately two miles.

Source: Diamondhead Casino Corporation

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