Sunshine Oilsands Ltd Announces New Equity Placement

CALGARY, Alberta and HONG KONG, May 18, 2014 /CNW/ - 
(1) NEW PRIVATE PLACEMENT OF HK$544 MILLION OF COMMON SHARES UNDER THE GENERAL 
MANDATE TO JIN QUAN LIMITED AND IMMEDIATE Focus International Limited 
(2) CANCELLATION OF THE CLOSING OF THE REMAINING 38,346,042 UNITS TO PYRAMID 
VALLEY LIMITED PURSUANT TO THE PRIVATE PLACEMENT ANNOUNCED ON JANUARY 24, 2014 
(3) INSIDE INFORMATION – PROPOSED DEBT OFFERING 
Sunshine Oilsands Ltd. (the "Corporation" or "Sunshine") (HKEX: 2012, TSX: 
SUO) is pleased to announce the following: 
1. NEW PRIVATE PLACEMENT OF HK $544 MILLION OF COMMON SHARES 
(a) The Placements 
On May 17, 2014 in Hong Kong (May 16, 2014 in Calgary), the Corporation 
received and accepted an irrevocable subscription agreement from Jin Quan 
Limited ("Jin Quan") for a total of 280,000,000 Class "A" Common Voting Shares 
of the Corporation ("Common Shares") at a price of HK $0.85 per Common Share 
or approximately CDN $0.12 per Common Share at current exchange rates (the 
"Subscription Price"), which in the aggregate amounts to gross proceeds of HK 
$238,000,000 (approximately CDN $33.4 million at current exchange rates) (the 
"Jin Quan Subscription Agreement"). 
Also on May 17, 2014 in Hong Kong (May 16, 2014 in Calgary), the Corporation 
received and accepted an irrevocable subscription agreement from Immediate 
Focus International Limited ("Immediate Focus") for a total of 360,000,000 
Common Shares at the Subscription Price which in aggregate amounts to gross 
proceeds of HK $306,000,000 (approximately CDN $43.0 million at current 
exchange rates) (the "Immediate Focus Subscription Agreement", and together 
with the Jin Quan Subscription Agreement, the "Placements"). 
The total number of Common Shares to be issued to both Jin Quan and Immediate 
Focus represent approximately 19.69% of the existing issued Common Shares as 
at the date of this announcement and, immediately following the completion of 
the Placements, approximately 16.45% of the then enlarged total issued Common 
Shares. 
(b) Subscription Price 
The Subscription Price represents: 
(i) a discount of approximately 9.57% to the average closing price of 
approximately HK $0.94 per Common Share as quoted on the Hong Kong Stock 
Exchange for the last thirty (30) trading days up to and including May 16, 
2014 (being the trading day immediately preceding the signing of the 
Placements); 
(ii) a discount of approximately 8.60% to the average closing price of 
approximately HK $0.93 per Common Share as quoted on the Hong Kong Stock 
Exchange for the last five (5) trading days up to and including May 16, 2014 
(being the trading day immediately preceding the signing of the Placements); 
and 
(iii) a discount of approximately 13.27% to the closing price of HK $0.98 per 
Common Share as quoted on the Hong Kong Stock Exchange on May 16, 2014 (being 
the trading day immediately preceding the signing of the Placements). 
The aggregate gross proceeds to be raised from the Placements will be HK 
$544,000,000 (approximately CDN $76.4 million at current exchange rates). 
The Subscription Price was determined with reference to the prevailing market 
price of the Common Share and was negotiated on an arm's length basis between 
the Corporation and Jin Quan and Immediate Focus, respectively. The Directors 
consider that the terms of the Placements are on normal commercial terms and 
are fair and reasonable based on the current market conditions and the 
Placements are in the interests of the Corporation and its shareholders as a 
whole. 
(c) Conditions to Completion of the Placements 
Closing of the Placements is conditional upon the following conditions: 
(i) the closing of not less than US $200,000,000 in respect of a debt offering 
by the Corporation of senior secured notes in North America for total gross 
proceeds of up to US $325,000,000 (the "Proposed Debt Offering"); 
(ii) The Stock Exchange of Hong Kong Limited (the "Hong Kong Stock Exchange") 
and the Toronto Stock Exchange approving the listing of the Common Shares to 
be issued pursuant to the Placements; 
(iii) compliance of the Placements with the requirements under the Rules 
Governing the Listing of Securities on the Hong Kong Stock Exchange (the "Hong 
Kong Listing Rules") and the Hong Kong Code on Takeovers and Mergers (where 
applicable); and 
(iv) the receipt of all other required regulatory approvals. 
For further details of the Proposed Debt Offering, see the section below 
entitled "3. Inside Information – Proposed Debt Offering". 
(d) Completion of the Placements 
After the fulfilment of conditions (ii), (iii) and (iv) above, completion of 
the Placements is expected to take place concurrently with the closing of the 
Proposed Debt Offering.  A further announcement will be made by the 
Corporation upon completion of the Placements. 
The certificates representing the Common Shares subscribed for under the 
Placements 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 Placements is subject to the satisfaction of certain 
conditions.  As the Placements 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. 
(e) General Mandate to Issue Common Shares 
The Placements do not require the approval of the Corporation's shareholders 
as the Common Shares under the Placements will be allotted and issued under 
the unused portion of the general mandate, which was granted to the Board at 
the special general meeting of the Corporation held on April 15, 2014 (the 
"SGM") to issue up to 20% of its aggregate issued and outstanding share 
capital as at the date of the SGM until the next annual general meeting of the 
Corporation (the "Refreshed General Mandate").  The amount of the Refreshed 
General Mandate is 649,889,185 Common Shares.  Details of the Refreshed 
General Mandate are set out in the Corporation's circular dated March 17, 2014. 
As at the date of this announcement, the Corporation has not issued any Common 
Shares under the General Mandate.  The Common Shares when issued pursuant to 
the Placements will be credited as fully paid and rank pari passu in all 
respects with the other existing Common Shares. 
(f) Background of Jin Quan and Immediate Focus 
Jin Quan, an independent third party investment company based in Hong Kong, is 
an existing shareholder of the Corporation and, as at the date of this 
announcement, holds 67,500,000 Common Shares and 22,500,000 common share 
purchase warrants of the Corporation which are exercisable into Common Shares. 
 Jin Quan participated in the Corporation's recent unit placement referred to 
in the announcements made by the Corporation on January 24, 2014 and February 
7, 2014, respectively. 
Immediate Focus, an independent, third party investment company based in Hong 
Kong, is an existing shareholder of the Corporation and, as at the date of 
this announcement, holds 112,000,000 Common Shares and 30,000,000 common share 
purchase warrants of the Corporation which are exercisable into Common Shares. 
 Immediate Focus participated in the Corporation's recent unit placements 
referred to in the announcements made by the Corporation on December 3, 2013, 
December 10, 2013, January 16, 2014, January 24, 2014, February 7, 2014 and 
February 21, 2014, respectively. 
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 Jin Quan and Immediate Focus pursuant to the Placements. 
(g) Reasons for the Placements and Use of Proceeds from the Placements 
The Directors consider that the Placements represent an opportunity to raise 
capital for the Corporation at an important time for the Corporation.  The 
gross proceeds to be raised from the Placements will be HK $544,000,000 
(approximately CDN $76.4 million at current exchange rates). Based on the 
estimated expenses of approximately HK $356,000 (approximately CDN $50,000 at 
current exchange rates), the net proceeds to be raised from the Placements 
will be approximately HK $543,644,000 (approximately CDN $76.35 million at 
current exchange rates). On this basis, the net price per Common Share under 
the Placements is approximately HK $0.849. 
The net proceeds to be raised from the Placements will be primarily used by 
the Corporation to settle outstanding accounts payable with a view to resuming 
the development and construction of the Corporation's West Ells steam assisted 
gravity drainage ("SAGD") project and for general corporate purposes. 
(h) Fund Raising Activities of the Corporation in the Past Twelve Months 
Except for the equity fund raising activity mentioned below, the Corporation 
has not carried out any other equity fund raising activities during the past 
twelve months immediately prior to the date of this announcement: 


                                                                  Actual use
                                                               of
    Date of                       Estimated     Intended use   proceeds as
    announcement   Event          net proceeds  of proceeds    at
                                                               the date of
                                                               this
                                                               announcement
                                                To address
    December 3,    Placements of                short
    2013,          197,388,235                  term capital   HK
    December 10,   Common Shares  HK            requirements,  $327,788,200
    2013, January  and            $327,788,200  corporate      (CDN
    10,            144,751,372    (CDN          objectives     $45,635,461)
    2014 and       Common Share   $45,635,461)  and            used as
    January        purchase                     for general    intended
    24, 2014       warrants                     corporate
                                                purpose
                                                To address
    January 16,    Placements of                short
    2013,          45,000,000                   term capital   HK
    January 24,    Common Shares  HK            requirements,  $74,205,000
    2013           and            $74,205,000   corporate      (CDN
    and February   33,000,000     (CDN          objectives     $10,497,272)
    7,             Common Share   $10,497,272)  and            used as
    2014           purchase                     for general    intended
                   warrants                     corporate
                                                purposes
                                                To address
                   Placements of                short
    January 24,    45,653,958                   term capital   HK
    2013           Common Shares  HK            requirements,  $77,611,729
    and February   and            $77,611,729   corporate      (CDN
    28,            33,479,569     (CDN          objectives     $11,140,000)
    2014           Common Share   $11,140,000)  and for        used as
                   purchase                     general        intended
                   warrants                     corporate
                                                purposes
                                  HK                           HK
    Total                         $479,604,929                 $479,604,929
                                  (CDN                         (CDN
                                  $67,272,733)                 $67,272,733)

(i)         Effects on Shareholding Structure

The existing shareholding structure of the Corporation and the effect of the 
Placements on the shareholding structure of the Corporation immediately 
following the completion of the Placements is set out below.
        _____________________________________________________________________
    |            |As at the date of this      |Immediately after the      |
    |            |Announcement                |completion of the          |
    |            |                            |Placements                 |
    |Name of     |____________________________|___________________________|
    |Shareholder |             |Approximate   |             |Approximate  |
    |            |Number of    |% of total    |Number of    |%of total    |
    |            |Common Shares|issued        |Common Shares|issued Common|
    |            |             |Common Shares |             |Shares (1)   |
    |            |             |(1)           |             |             |
    |____________|_____________|______________|_____________|_____________|
    |Mr. Tseung  |295,233,035  |9.08          |295,233,035  |7.59         |
    |Hok Ming    |             |              |             |             |
    |____________|_____________|______________|_____________|_____________|
    |China Life  |             |              |             |             |
    |Insurance   |             |              |             |             |
    |(Overseas)  |258,802,600  |7.96          |258,802,600  |6.65         |
    |Company     |             |              |             |             |
    |Limited     |             |              |             |             |
    |____________|_____________|______________|_____________|_____________|
    |China       |             |              |             |             |
    |Investment  |239,197,500  |7.36          |239,197,500  |6.15         |
    |Corporation |             |              |             |             |
    |____________|_____________|______________|_____________|_____________|
    |Sinopec     |             |              |             |             |
    |Century     |             |              |             |             |
    |Bright      |239,197,500  |7.36          |239,197,500  |6.15         |
    |Capital     |             |              |             |             |
    |Investment  |             |              |             |             |
    |Limited     |             |              |             |             |
    |____________|_____________|______________|_____________|_____________|
    |Central     |             |              |             |             |
    |Huijin      |206,611,560  |6.36          |206,611,560  |5.31         |
    |Investment  |             |              |             |             |
    |Ltd         |             |              |             |             |
    |____________|_____________|______________|_____________|_____________|
    |Immediate   |112,000,000  |3.45          |472,000,000  |12.13        |
    |Focus(2)    |             |              |             |             |
    |____________|_____________|______________|_____________|_____________|
    |Pyramid     |             |              |             |             |
    |Valley      |64,000,000   |1.97          |64,000,000   |1.64         |
    |Limited(2)  |             |              |             |             |
    |____________|_____________|______________|_____________|_____________|
    |Jin Quan    |67,500,000   |2.08          |347,500,000  |8.93         |
    |____________|_____________|______________|_____________|_____________|
    |Other       |1,767,374,009|54.38         |1,767,374,009|45.43        |
    |Shareholders|             |              |             |             |
    |____________|_____________|______________|_____________|_____________|
    |Total       |3,249,916,204|100.00        |3,889,916,204|100.00       |
    |____________|_____________|______________|_____________|_____________|
    |            |             |              |             |             |
    |____________|_____________|______________|_____________|_____________|
    |Note:                                                                |
    |_____________________________________________________________________|
    |(1) Certain percentage figures included in this table have been      |
    |subject to rounding adjustments. Accordingly, figures shown as totals|
    |may not be an arithmetic aggregation of the figures preceding them.  |
    |_____________________________________________________________________|
    |(2) Mr. Xie Bing holds a 100% and 40% interest in Immediate Focus and|
    |Pyramid Valley Limited, respectively. Accordingly, Mr. Xie Bing is   |
    |deemed to be interested in the aggregate number of Common Shares held|
    |by both Immediate Focus and Pyramid Valley Limited, which represents:|
    |(i) approximately 5.42% of the total issued Common Shares as at the  |
    |date of this announcement, and (ii) approximately 13.78% of the total|
    |issued Common Shares immediately following the completion of the     |
    |Placements.                                                          |
    |_____________________________________________________________________|

2. CANCELLATION OF THE CLOSING OF THE REMAINING 38,346,042 UNITS TO PYRAMID 
VALLEY LIMITED

Reference is made to the Corporation's two announcements dated January 24, 
2014 and  February 28, 2014 regarding the private placement of 84,000,000 
units of the Corporation (the "Units") to Pyramid Valley Limited ("Pyramid 
Valley") (the "Pyramid Valley Subscription"). The placement of 45,653,958 
Units pursuant to the Pyramid Valley Subscription was completed on February 
28, 2014.

The Corporation has cancelled the closing of the remaining 38,346,042 Units to 
Pyramid Valley Limited under the Pyramid Valley Subscription.  Doing so will 
allow the Corporation to maximise its  Refreshed General Mandate in accepting 
the Placements in order to raise capital that is available to close now.

3. INSIDE INFORMATION – PROPOSED DEBT OFFERING

The Corporation announces that it intends to pursue the Proposed Debt Offering 
to satisfy condition (i) of the Placements as set out above and intends to 
raise total gross proceeds of up to US $325,000,000 through the issuance of 
senior secured notes of the Corporation due in 2019 (the "Notes").  The terms 
and conditions of the Proposed Debt Offering, including the interest rate of 
the Notes, will be determined after taking into account market conditions and 
all other relevant factors.

The Corporation intends to use the proceeds from the Proposed Debt Offering 
to: (i) fund expenditures associated with the anticipated final construction 
and development necessary to complete phases one and two at the Corporation's 
West Ells asset, (ii) settle outstanding accounts payable, (iii) prefund 18 
months of cash interest in an escrow account, and (iv) pay fees and expenses 
associated with the Proposed Debt Offering.

Please refer to the section below entitled "5. About Sunshine Oilsands Ltd." 
below and the Corporation's 2013 Annual Report dated April 22, 2014 for 
further details about the West Ells SAGD project.

The Notes will not be listed for trading on any stock exchange.  Further 
announcement(s) in respect of the Proposed Debt Offering will be made by the 
Corporation as and when appropriate.

No binding agreement in relation to the Proposed Debt Offering has been 
entered into as at the date of this announcement. The Proposed Debt Offering 
may nor may not materialise subject to, among other things, market conditions 
and investors' interest. Investors and shareholders of the Corporation are 
reminded to exercise caution when dealing in the securities of the Corporation.

4. FORWARD-LOOKING INFORMATION AND DISCLAIMER

This announcement contains forward-looking information relating to, among 
other things: (a) the future financial performance and objectives of Sunshine; 
and (b) 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, 2013 (the "AIF") 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 the 
Corporation's website at www.sunshineoilsands.com.

In addition, information and statements in this announcement relating to 
"reserves" and "resources" are deemed to be forward-looking information, as 
they involve the implied assessment, based on certain estimates and 
assumptions, that the reserves and resources described exist in the quantities 
predicted or estimated, and that the reserves and resources described can be 
profitably produced in the future. The assumptions relating to Sunshine's 
reserves and resources are contained in the reports of GLJ Petroleum 
Consultants Ltd. and DeGolyer and MacNaughton Canada Limited, each dated 
effective December 31, 2013.  For additional information regarding the 
specific contingencies which prevent the classification of Sunshine's 
contingent resources as reserves see "Statement of Reserves Data and Other Oil 
and Gas information" in the AIF.  The estimates of reserves and future net 
revenue for individual properties in this announcement may not reflect the 
same confidence level as estimates of reserves and future net revenue for all 
properties, due to the effects of aggregation.  "Contingent Resources" has the 
meaning given to that term in the AIF.

5. About Sunshine Oilsands Ltd.

The Corporation is a Calgary based public corporation, listed on the Hong Kong 
Stock Exchange since March 1, 2012 and the Toronto Stock Exchange since 
November 16, 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 P&NG 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, which will be 
followed immediately by an approved expansion to a planned production capacity 
of 10,000 barrels per day. In addition to West Ells activities, the 
Corporation has received regulatory approval to the Thickwood 10,000 barrels 
per day SAGD project and has an additional 10,000 barrels per day application 
in regulatory review for Legend.



SOURCE  Sunshine Oilsands Ltd. 
Mr. David Sealock, Interim President & CEO, Tel: +1-403-984-1446, Email: 
investorrelations@sunshineoilsands.com 
http://www.sunshineoilsands.com 
http://www.sedar.com 
http://www.hkexnews.hk 
To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/May2014/18/c8951.html 
CO: Sunshine Oilsands Ltd.
NI: OIL UTI NEWSTK  
-0- May/19/2014 01:34 GMT
 
 
Press spacebar to pause and continue. Press esc to stop.