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  
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