CST: 23/08/2016 23:58:34   

Private Placement of HK$ 189,999,990 of Common Shares Under the General Mandate to Bright Hope Global Investments Limited

161 Days ago

HONG KONG, CHINA and CALGARY, ALBERTA--(Marketwired - Mar 15, 2016) - The Board of Directors (the "Board") of Sunshine Oilsands Ltd. (the "Corporation" or "Sunshine") (HKEX: 2012) is pleased to announce the following:

PRIVATE PLACEMENT OF HK$ 189,999,990 OF COMMON SHARES

(a) The Placement

On March 15, 2016 in Hong Kong (March 15, 2016 in Calgary), the Corporation entered into a subscription agreement (the "Subscription Agreement") with Bright Hope Global Investments Limited ("Bright Hope Global") under which Bright Hope Global agreed to subscribe for a total of 558,823,500 Class "A" Common Voting Shares of the Corporation ("Common Shares") at a price of HK$ 0.34 per Common Share or approximately CDN$ 0.058 per Common Share at current exchange rates (the "Subscription Price"), which in the aggregate amounts to gross proceeds of HK$ 189,999,990 (approximately CDN$ 32,576,639 at current exchange rates) (the "Placement").

The aggregate number of Common Shares to be issued to Bright Hope Global (the "Subscriber") represent approximately 13.21 % of the existing issued and outstanding Common Shares as at the date of this announcement and, immediately following the completion of the Placement (assuming there will be no other changes in the number of issued and outstanding Common Shares between the date of this announcement and the completion of the Placement including, without limitation, pursuant to the Employee and Connected Subscription as defined below), approximately 11.67% of the then enlarged total issued and outstanding Common Shares.

(b) Subscription Price

The Subscription Price represents:

(i) a discount of approximately 19.05% to the average closing price of approximately HK$0.42 per Common Share as quoted on the Hong Kong Stock Exchange for the last five trading days immediately prior to March 15, 2016 (being the last trading day immediately preceding the signing of the Subscription Agreement); and

(ii) a discount of approximately 11.69% to the closing price of HK$ 0.385 per Common Share as quoted on the Hong Kong Stock Exchange on March 15, 2016.

The aggregate gross proceeds to be raised from the Placement will be HK$ 189,999,990 (approximately CDN$ 32,576,639 at current exchange rates).

The Subscription Price was determined with reference to the prevailing market price of the Common Shares and was negotiated on an arm's length basis between the Corporation and the Subscriber. The directors of the Corporation (the "Directors") consider that the terms of the Placement are on normal commercial terms and are fair and reasonable based on the current market conditions and the Placement is in the interests of the Corporation and its shareholders as a whole.

(c) Conditions to Completion of the Placement

Completion of the Placement is subject to the fulfillment (or waiver) of the following conditions:

(i) the Stock Exchange of Hong Kong Limited (the "Hong Kong Stock Exchange") approving the listing of the Common Shares to be issued pursuant to the Placement;

(ii) compliance of the Placement with the requirements under the Rules Governing the Listing of Securities on the Hong Kong Stock Exchange and the Hong Kong Code on Takeovers and Mergers (where applicable); and

(iii) the receipt of all other required regulatory approvals.

(d) Termination of the Subscription Agreement

In the event that (i) the Corporation suffers a material adverse change in the management, business, properties, financial condition, prospects, shareholders' equity or results of operation of the Corporation shall have occurred or been announced since the date of the Subscription Agreement; or (ii) any adverse change in the oil price and/or general market conditions and/or the share price of the Corporation takes place after the date of the Subscription Agreement, the Subscription Agreement may be terminated by the Subscriber by written notice, and in which case, the obligations of the Corporation and the Subscriber under the Subscription Agreement shall immediately and unconditionally cease and be null and void.

(e) Completion of the Placement

Completion of the Placement will take place on or before May 14, 2016 (or such other date as the Corporation may choose) (the "Closing Date").

The certificates representing the Common Shares subscribed for under the Placement will bear certain legends, as required under applicable Canadian securities laws, including a legend stating that unless permitted under applicable Canadian securities legislation, the holder of the Common Shares must not trade the Common Shares before the date that is four months and a day after the Closing Date.

Completion of the Placement is subject to the satisfaction of certain conditions. As the Placement may or may not proceed, shareholders and potential investors of the Corporation are advised to exercise caution when dealing in the securities of the Corporation.

(f) General Mandate to Issue Common Shares

The Placement does not require the approval of the Corporation's shareholders as the Common Shares under the Placement will be allotted and issued under the general mandate, which was granted to the Board at the annual general and special meeting of the Corporation held on June 24, 2015 (Hong Kong time) / June 23, 2015 (Calgary time) (the "AGM") to issue up to 20% of its aggregate issued and outstanding share capital as at the date of the AGM until the next annual general meeting of the Corporation (the "General Mandate"). The amount of the General Mandate is 780,194,614 Common Shares. Details of the General Mandate are set out in the Corporation's circular dated May 19, 2015.

As at the date of this announcement, other than (i) the issuance of 100,000,000 Common Shares as disclosed in the announcement dated September 21, 2015 (Hong Kong time)/ September 20, 2015 (Calgary time); (ii) the issuance of 36,912,000 Common Shares as disclosed in the announcement dated November 10, 2015 (Hong Kong time)/ November 9, 2015 (Calgary time); and (iii) the issuance of 78,125,000 Common Share as disclosed in the announcement dated November 13, 2015 (Hong Kong time)/November 12, 2015 (Calgary time), the Corporation has not issued, and has not proposed to issue, any Common Shares under the General Mandate. The Common Shares when issued pursuant to the Placement will be credited as fully paid and rank pari passu in all respects with the other existing Common Shares.

(g) Background of Bright Hope Global

Bright Hope Global is an existing shareholder of the Corporation and, as at the date of this announcement, holds 36,261,500 Common Shares representing approximately 0.86% of the existing issued and outstanding Common Shares as at the date of this announcement. After the completion of the Placement (assuming there will be no other changes in the issued Common Shares between the date of this announcement and the completion of the placement) including, without limitation, pursuant to the Employee and Connected Subscription), Bright Hope Global will hold 12.43% of the then enlarged total issued and outstanding Common Shares.

To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, Bright Hope Global, and its respective associates (as defined under the Listing Rules) and respective ultimate beneficial owners are independent of and not connected with the Corporation and its connected persons (as defined under the Listing Rules).

An application will be made by the Corporation to the Hong Kong Stock Exchange for the listing of, and permission to deal in, the Common Shares to be issued to the Subscriber pursuant to the Placement.

(h) Reasons for the Placement and Use of Proceeds from the Placement

[The Directors consider that the Placement represents an opportunity to raise capital for the Corporation at an important time for the Corporation. The gross proceeds to be raised from the Placement will be HK$ 189,999,990 (approximately CDN$ 32,576,639 at current exchange rates). Based on the estimated expenses of approximately HK$ 700,000 (approximately CDN$ 120,190.2 at current exchange rates), the net proceeds to be raised from the Placement will be approximately HK$ 189,299,990 (approximately CDN$ 32,456,620 at current exchange rates). On this basis, the net price per Common Share under the Placement is approximately HK$0.339.

The Corporation intends to apply the net proceeds from the Placement (i) for general working capital of the Corporation and (ii) as funds for future development of the existing business of the Corporation, including funding the development and operation costs of the West Ells project.

(i) Fund Raising Activities of the Corporation in the Past Twelve Months

The Corporation has conducted the following equity fund raising activity in the 12 months preceding the date of this announcement.

Date of announcement Fund raising activity Approximate net proceeds raised Intended use of the net proceeds Actual use of the net proceeds
June 1, 2015 Private placement of Common Shares under Specific Mandate (the "Employee and Connected Subscription") HK$391,612,282.50 (approximately CDN$62,958,149.66 (1),(2)) (i) for general working capital of the Corporation; and
(ii) as funds for future development of the existing business of the Corporation, including funding the development and operation costs of the West Ells project.
HK$ 83,410,658 (approximately CDN$ 14.1 million) used as intended
September 21, 2015 Private placement of Common Shares under General Mandate HK$ 49,300,000.00
(approximately
CDN$ 8,363,161(3))
(i) for general working capital of the Corporation; and
(ii) as funds for future development of the existing business of the Corporation, including funding the development and operation costs of the West Ells project.
HK$ 49,300,000.00
(approximately
CDN$ 8,363,161(3)) used as intended
November 10, 2015 Private placement of Common Shares under General Mandate HK$ 22,554,560.00
(approximately
CDN$ 3,862,413(4))
(i) for general working capital of the Corporation; and
(ii) as funds for future development of the existing business of the Corporation, including funding the development and operation costs of the West Ells project.
HK$ 22,554,560.00
(approximately
CDN$ 3,862,413(4))) used as intended
November 13, 2015 Private placement of Common Shares under General Mandate HK$ 48,300,000.00 (approximately CDN$ 8,293,126(5)) (i) for general working capital of the Corporation; and
(ii) as funds for future development of the existing business of the Corporation, including funding the development and operation costs of the West Ells project.
HK$ 48,300,000.00
(approximately
CDN$ 8,293,126(5)) used as intended
Notes
(1) Based on the Bank of Canada's nominal noon exchange rate (as at May 29, 2015) of CDN$1.00 = HK$6.2202.
(2) The issuance of 111,214,210 Common Shares with proceeds of HK$83,410,658 closed on August 21, 2015 and the issuance of the remaining 413,520,000 Common Shares with proceeds of HK$310,140,000 is expected to close no later than May 2, 2016.
(3) Based on the Bank of Canada's nominal noon exchange rate (as at September 18, 2015) of CDN$1.00 = HK$5.8949.
(4) Based on the Bank of Canada's nominal noon exchange rate (as at November 9, 2015) of CDN$1.00 = HK$5.8395.
(5) Based on the Bank of Canada's nominal noon exchange rate (as at November 12, 2015) of CDN$1.00 = HK$5.8241

(j) Effects on Shareholding Structure

The existing shareholding structure of the Corporation and the effect of the Placement on the shareholding structure of the Corporation immediately following the completion of the Placement (assuming there will be no other changes in the issued Common Shares between the date of this announcement and the completion including, without limitation, pursuant to the Employee and Connected Subscription) is set out below.

As at the date of this Announcement Immediately after Completion of the Placement
Name of Shareholder Number of Common Shares Approx. % of Common Shares Number of Common Shares Approx. % of Common Shares
Mr. Sun Ping Kwok 803,082,500 18.98 803,082,500 16.77
China Life Insurance (Group) Company(1) 314,822,600 7.44 314,822,600 6.57
Mr. Hok Ming Tseung 295,893,656 7 295,893,656 6.18
Sinopec Century Bright Capital Investment Limited(2) 239,197,500 5.65 239,197,500 4.99
Great Hope Global 36,261,500 0.86 595,085,000 12.43
Other Shareholders 2,576,829,348 60.07 2,576,829,348 53.06
Total 4,230,264,104 100.00 4,789,087,604 100.00
Notes:
(1) China Life Insurance (Group) Company owns the entire issued share capital of China Life Insurance (Overseas) Company Limited, which in turn owns 314,822,600 Common Shares. Accordingly, China Life Insurance (Group) Company is deemed to be interested in 314,822,600 Common Shares held by China Life Insurance (Overseas) Company Limited.
(2) Sinopec Century Bright Capital Investment Limited is a wholly-owned subsidiary of China Petrochemical Corporation.

ABOUT SUNSHINE OILSANDS LTD.

The Corporation is a Calgary based public corporation listed on the Hong Kong Stock Exchange since March 1, 2012. The Corporation is focused on the development of its significant holdings of oil sands leases in the Athabasca oil sands region. The Corporation owns interests in approximately one million acres of oil sands and petroleum and natural gas leases in the Athabasca region. The Corporation is currently focused on executing milestone undertakings in the West Ells project area. West Ells has an initial production target rate of 5,000 barrels per day.

FORWARD LOOKING INFORMATION

This announcement contains forward-looking information relating to, among other things, (a) the closing of, and the anticipated timing of the closing of, the Placement and the remainder of the Employee and Connected Subscription; (b) the future financial performance and objectives of Sunshine; and (c) the plans and expectations of the Corporation. Such forward-looking information is subject to various risks, uncertainties and other factors. All statements other than statements and information of historical fact are forward-looking statements. The use of words such as "estimate", "forecast", "expect", "project", "plan", "target", "vision", "goal", "outlook", "may", "will", "should", "believe", "intend", "anticipate", "potential", and similar expressions are intended to identify forward-looking statements. Forward-looking statements are based on Sunshine's experience, current beliefs, assumptions, information and perception of historical trends available to Sunshine, and are subject to a variety of risks and uncertainties including, but not limited to those associated with resource definition and expected reserves and contingent and prospective resources estimates, unanticipated costs and expenses, regulatory approval, fluctuating oil and gas prices, expected future production, the ability to access sufficient capital to finance future development and credit risks, changes in Alberta's regulatory framework, including changes to regulatory approval process and land-use designations, royalty, tax, environmental, greenhouse gas, carbon and other laws or regulations and the impact thereof and the costs associated with compliance.
Although Sunshine believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned that the assumptions and factors discussed in this announcement are not exhaustive and readers are not to place undue reliance on forward-looking statements as the Corporation's actual results may differ materially from those expressed or implied. Sunshine disclaims any intention or obligation to update or revise any forward-looking statements as a result of new information, future events or otherwise, subsequent to the date of this announcement, except as required under applicable securities legislation. The forward-looking statements speak only as of the date of this announcement and are expressly qualified by these cautionary statements. Readers are cautioned that the foregoing lists are not exhaustive and are made as at the date hereof. For a full discussion of the Corporation's material risk factors, see the Corporation's annual information form for the year ended December 31, 2014 and risk factors described in other documents we file from time to time with securities regulatory authorities, all of which are available on the Hong Kong Stock Exchange at www.hkexnews.hk, on the SEDAR website at www.sedar.com or on the Corporation's website at www.sunshineoilsands.com.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

This announcement appears for information purpose only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities of Sunshine Oilsands Ltd. By Order of the Board of Sunshine Oilsands Ltd.

Sun Kwok Ping, Executive Chairman

As at the date of this announcement, the Board consists of Mr. Kwok Ping Sun, Mr. Hong Luo and Dr. Qi Jiang as executive directors; Mr. Michael John Hibberd, Mr. Hok Ming Tseung, Mr. Jin Hu and Mr. Jianzhong Chen as non-executive directors; and Mr. Raymond Shengti Fong, Mr. Robert John Herdman, Mr. Gerald Franklin Stevenson and Mr. Zhefei Song as independent non-executive directors.

Mr. Hong Luo
Chief Executive Officer
Tel: (1) 403-984-1450
Email: investorrelations@sunshineoilsands.com
Website: www.sunshineoilsands.com