Sunshine Oilsands Ltd. Announces Launch of US $325 Million Offering of Senior
CALGARY, Alberta and HONG KONG, May 22, 2014 /CNW/ - Reference is made to the
announcement of Sunshine Oilsands Ltd. ("Sunshine" or the "Corporation"; HKEX:
2012; TSX: SUO) dated May 19, 2014 (the "Announcement"). Sunshine is pleased
to announces that on May 22, 2014 in Hong Kong (May 22, 2014 in Calgary) it
intends to offer (the "Offering") US $325,000,000 aggregate principal amount
of senior secured notes of the Corporation maturing in 2019 (the "Notes").
The terms and conditions of the 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 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 steam assisted gravity drainage ("SAGD") project and general corporate
purposes, (ii) prefund 18 months of cash interest in an escrow account and
(iii) pay fees and expenses associated with the Offering.
Please refer to the section headed "About Sunshine Oilsands Ltd." below and
the Corporation's 2013 Annual Report released on April 28, 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 Offering will be made by the Corporation as
and when appropriate.
The closing of the Offering will be conditional on the closing of the
previously-announced private placement of HK$544 million of Class "A" Common
Voting Shares (the "Private Placement"). For further details on the Private
Placement, please refer to the Announcement.
No binding agreement in relation to the Offering has been entered into as at
the date of this announcement. The 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.
UPDATE ON WEST ELLS
As referenced above, if the Corporation is able to complete the Offering and
the Private Placement, it intends to fund expenditures associated with the
anticipated final construction and development necessary to complete phases
one and two at the Corporation's West Ells 10,000 bbls/day commercial SAGD
Provided the Corporation does not experience any significant cost overruns or
delays in construction, the Corporation anticipates that the total amount
remaining to complete phases one and two of West Ells SAGD project is
approximately CDN $236 million. This amount is comprised of approximately CDN
$25 million in commissioning, start up and road maintenance costs,
approximately CDN $61 million in commencement costs and approximately CDN $150
million of construction costs. The Corporation is targeting first steam for
phase one by the end of 2014 and first oil for phase one by the second quarter
of 2015, assuming there are no significant delays in the Corporation's
construction schedule or cost overruns.
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;
(b) the plans and expectations of the Corporation; (c) the ability of the
Corporation to complete the Offering and Private Placement; and (d) the use of
any proceeds raised from the Offering and Private Placement. 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 our
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 our
material risk factors, see the Corporation's annual information form for the
year ended December 31, 2013 (the "AIF"), "Risk Management" in our current
MD&A for the year ended December 31, 2013 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 our website at
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 effective
as of 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 our most recent 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.
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 for 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
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-0- May/22/2014 14:01 GMT
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