Sunshine Oilsands Ltd. Announces Additional Closing of Private Placement Financing of HK$336 Million of Common Shares and Warrants Under the General Mandate

CALGARY, Alberta and HONG KONG, Jan. 10, 2014 /PRNewswire/ -- Sunshine Oilsands Ltd. (the "Corporation") (HKEX: 2012, TSX: SUO) is pleased to provide an update with respect to its private placement (the "Placement") referred in its announcements dated December 3, 2013 and December 10, 2013. 

The Corporation is pleased to announce that it has received and accepted an irrevocable subscription agreement (the "Strong Subscription Agreement") from Strong Petrochemical Holdings Limited ("Strong Petrochemical") for 45,588,235 units of the Corporation ("Units") at a price of HK$1.70 per Unit (the "Subscription Price") (approximately CDN$0.23 per Unit at current exchange rates) for total gross proceeds of HK$77,500,000 (approximately CDN$10.8 million). The Strong Subscription Agreement will replace the subscription by Global Petroleum Services Limited ("Global Petroleum") of which subscription amount has been reduced accordingly, referred to in the Company's announcement dated 3 December 2013. The Corporation anticipates closing the remaining balance of the Global Petroleum subscription agreement in the near future.  

Each Unit is comprised of one Class "A" Common Voting Share of the Corporation ("Common Share") and one-third of one purchase warrant of the Corporation ("Warrant"). Each whole Warrant entitles the holder to acquire one Common Share at an exercise price of HK$1.88 per Common Share (the "Warrant Exercise Price") (approximately CDN$0.26 per Common Share) for a period of 24 months following the closing date of this placing. The Warrant Exercise Price will be subject to normal adjustment provisions in the case of share capital or corporate reorganizations.

Both the Subscription Price and the Warrant Exercise Price were determined after arm's length negotiation between the Corporation and Strong Petrochemical.

Strong Petrochemical is an independent, third party company based in Hong Kong and listed on the Hong Kong Stock Exchange under stock code 852. In connection with the Strong Subscription Agreement, the Corporation has agreed to pay a finder's fee equal to 3% of the gross proceeds of the placing to Strong Petrochemical to Far East Enterprise Investment Foundation Limited, which finder's fee may, at the sole election of the Corporation, be paid through the issuance of Units to the finders at a deemed price of HK$1.70 per Unit (the "Finder Price") (approximately CDN$0.23 per Unit). Additionally, the Corporation has agreed to pay Goldeast Limited a finders' fee of two-fifths of a Warrant for each Unit issued to Strong Petrochemical, such that Far East Enterprise Investment Foundation Limited will receive a cash fee equal to HK$2,325,000 and Goldeast Limited will receive 18,235,294 Warrants. After payment of the 3% cash fee payable to Far East Enterprise Investment Foundation Limited in connection with the closed subscriptions, the net proceeds to the Corporation will be HK$75,175,000 (approximately CDN $10.5 million).

To the best of the Directors' knowledge, information and belief after having made all reasonable enquiries, Strong Petrochemical, Far East Enterprise Investment Foundation Limited and Goldeast Limited are independent of and not connected with the Corporation and the connected persons of the Corporation.

Each of the Subscription Price and the Finder Price represents:

(i) a premium of approximately 2.4% to the average closing price per Common Share of approximately HK$1.66 as quoted on the Hong Kong Stock Exchange for the last thirty (30) trading days up to and including January 9, 2013 (being the trading day immediately preceding the signing of the Strong Subscription Agreement);

(ii) a premium of approximately 6.9% to the average closing price per Common Share of HK$1.59 as quoted on the Hong Kong Stock Exchange for the last five (5) trading days up to and including January 9, 2013 (being the trading day immediately preceding the signing of the Strong Subscription Agreement);

(iii) a premium of approximately 8.3% to the closing price per Common Share of HK$1.57 as quoted on the Hong Kong Stock Exchange on January 9, 2013 (being the trading day immediately preceding the signing of the Strong Subscription Agreement).

The Warrant Exercise Price represents:

(i) a premium of approximately 13.3% to the average closing price per Common Share of approximately HK$1.66 as quoted on the Hong Kong Stock Exchange for the last thirty trading days up to and including January 9, 2013 (being the trading day immediately preceding the signing of the Strong Subscription Agreement);

(ii) a premium of approximately 18.2% to the average closing price per Common Share of HK$1.59 as quoted on the Hong Kong Stock Exchange for the last five trading days up to and including January 9, 2013 (being the trading day immediately preceding the signing of the Strong Subscription Agreement); and

(iii) a premium of approximately 19.7% to the closing price per Common Share of HK$1.57 as quoted on the Hong Kong Stock Exchange on January 9, 2013 (being the trading day immediately preceding the signing of the Strong Subscription Agreement).

The Common Shares to be issued pursuant to the Units issued to Strong Petrochemical represent approximately 1.49% of the existing issued Common Shares and, immediately following the completion of the closing of this subscription, approximately 1.46% of the then enlarged total issued Common Shares of the Company.

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 pursuant to the Units issued to the Strong Petrochemical, Far East Enterprise Investment Foundation Limited and Goldeast Limited.

Closing of the placing is conditional upon: (i) the Hong Kong Stock Exchange ("HKEX") and the Toronto Stock Exchange approving the listing of the Common Shares comprising the Units, the Common Shares issuable upon exercise of the Warrants and the Common Shares issuable in connection with the payment of the finder's fees; (ii) compliance of the placing with other requirements under the HKEX Listing Rules and the Hong Kong Code on Takeovers and Mergers or otherwise of the HKEX and the Securities and Futures Commission of Hong Kong; and (iii) the receipt of all other required regulatory approvals. 

Closing of the Strong Subscription Agreement is expected to occur on or about January 14, 2014.

FUND RAISING ACTIVITIES IN THE PAST TWELVE MONTHS

EFFECTS ON SHAREHOLDING STRUCTURE

The existing shareholding structure of the Corporation and the effect of the placing to Strong Petrochemical on the shareholding structure of the Corporation immediately following the completion of the placing is set out below.