News Column

Sunshine Announces Additional Investor for the Private Placement Financing of HK$336 Million

January 24, 2014

HONG KONG , Jan. 24, 2014 /CNW/ - Sunshine Oilsands Ltd. (the " Corporation ") ( HKEX : 2012, TSX: SUO) is pleased to announce the following: (1) in relation to the initial private placement that was announced by the Corporation on December 3, 2013 (the " First Placing "), the Corporation has received and accepted an irrevocable subscription agreement (the " Jin Quan Subscription Agreement ") from Jin Quan Limited (" Jin Quan ") for 45,000,000 units of the Corporation (" Units ") at a price of HK$1.70 per Unit (the " Subscription Price ") (approximately CDN$0.24 per Unit at current exchange rates) for total gross proceeds of HK$76,500,000 (approximately CDN$10.90 million ). The Jin Quan Subscription Agreement will replace the subscription by Global Petroleum Services Limited (" Global Petroleum ") which subscription amount has been reduced accordingly, referred to in the Company's announcement dated December 3, 2013 , December 10, 2013 and January 10, 2014 . The Global Petroleum subscription agreement has been terminated and the remaining balance of 588,236 Units is no longer issuable to Global Petroleum. The finders' fees for the Global Petroleum subscription is also cancelled. 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 the relevant placing. The Warrant Exercise Price will be subject to normal adjustment provisions in the case of share capital or corporate reorganizations such as share consolidations and share splits, which will accordingly adjust the Warrant Exercise Price by the impact of such consolidation or split on the total issued share capital of the Corporation such that the relevant holder of the Warrant will be kept whole and will receive their proportionate share upon exercise of the Warrant. Jin Quan is an independent, third party company based in Hong Kong . In connection with the Jin Quan Subscription Agreement, the Corporation has agreed to pay Goldeast Limited a finders' fee of two-fifths of a Warrant for each Unit issued to Jin Quan, such that Goldeast Limited will receive 18,000,000 Warrants. (2) it has completed the closing of its private placement of 45,000,000 Units to Immediate Focus Limited that was announced on January 16, 2014 (the " Second Placing "). (3) it has received and accepted an additional irrevocable subscription agreement (the " Pyramid Valley Subscription Agreement ") from Pyramid Valley Limited (" Pyramid Valley ") for 84,000,000 Units at the Subscription Price for total gross proceeds of HK$142,800,000 (approximately CDN$20.4 million ) (the " Third Placing "). Closing of this subscription is subject to receipt of listing approval from the Hong Kong Stock Exchange (" HKEX ") and the Toronto Stock Exchange (" TSX "). Pyramid Valley is an independent, third party company based in Hong Kong . In connection with the Pyramid Valley Subscription Agreement, the Corporation has agreed to pay Goldeast Limited a finders' fee of two-fifths of a Warrant for each Unit issued to Pyramid Valley, such that Goldeast Limited will receive 33,600,000 Warrants. In relation to the First Placing and Second Placing, the Corporation has received irrevocable subscriptions from five investors for an aggregate of 242,388,235 Units priced at HK$1.70 per Unit for aggregate net proceeds of HK$401,060,000 . So far, the Corporation has received HK$335,560,000 in funds relating to the issuance of 197,388,235 Units to four different investors, pending completion of the Jin Quan Subscription Agreement. To the best of the Directors' knowledge, information and belief after having made all reasonable enquiries, Jin Quan, Pyramid Valley and Goldeast Limited and, if applicable, their ultimate beneficial owner is/are third parties independent of and not connected with the Corporation and the connected persons of the Corporation. The Subscription Price and the Warrant Exercise Price, were determined by negotiation between the Corporation, and each of Jin Quan, Pyramid Valley and Goldeast Limited . 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 Pyramid Valley and Goldeast Limited . The Subscription Price represents: (i) a premium of approximately 8.28% to the average closing price per Common Share of approximately HK$1.57 as quoted on the Hong Kong Stock Exchange for the last thirty (30) trading days up to and including January 23, 2013 (being the trading day immediately preceding the signing of the Jin Quan Subscription Agreement and Pyramid Valley Subscription Agreement); (ii) a premium of approximately 6.25% to the average closing price per Common Share of HK$1.60 as quoted on the Hong Kong Stock Exchange for the last five (5) trading days up to and including January 23, 2013 (being the trading day immediately preceding the signing of the Jin Quan Subscription Agreement and Pyramid Valley Subscription Agreement); (iii) a premium of approximately 8.28% to the closing price per Common Share of HK$1.57 as quoted on the Hong Kong Stock Exchange on January 23, 2013 (being the trading day immediately preceding the signing of the Jin Quan Subscription Agreement and Pyramid Valley Subscription Agreement). The Warrant Exercise Price represents: (i) a premium of approximately 19.75% to the average closing price per Common Share of approximately HK$1.57 as quoted on the Hong Kong Stock Exchange for the last thirty trading days up to and including January 23, 2013 (being the trading day immediately preceding the signing of the Jin Quan Subscription Agreement and Pyramid Valley Subscription Agreement); (ii) a premium of approximately 17.50% to the average closing price per Common Share of HK$1.60 as quoted on the Hong Kong Stock Exchange for the last five trading days up to and including January 23, 2013 (being the trading day immediately preceding the signing of the Jin Quan Subscription Agreement and Pyramid Valley Subscription Agreement); and (iii) a premium of approximately 19.75% to the closing price per Common Share of HK$1.57 as quoted on the Hong Kong Stock Exchange on January 23, 2013 (being the trading day immediately preceding the signing of the Jin Quan Subscription Agreement and Pyramid Valley Subscription Agreement). The Common Shares to be issued pursuant to the Units issued to the Jin Quan and Pyramid Valley represent approximately 4.09% of the existing issued Common Shares and, immediately following the completion of the final portion of the First Placing and the Third Placing, approximately 3.92% of the then enlarged total issued Common Shares of the Company. Assuming the exercise of all Warrants issued to the Jin Quan, Pyramid Valley and Goldeast Limited , the Common Shares to be issued pursuant to the Units issued to Jin Quan, Pyramid Valley and Goldeast Limited and upon the exercise of all Warrants will total 223,600,000 Common Shares and will represent approximately 7.08% of the existing issued Common Shares and, immediately following the completion of the final portion of the First Placing and the Third Placing, approximately 6.60% of the then enlarged total issued Common Shares of the Company. Closing of the Third Placing is conditional upon: (i) the HKEX and the TSX 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 Third 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 is expected to occur on January [28], 2014. REASONS FOR THE THIRD PLACING AND USE OF PROCEEDS FROM THE THIRD PLACING The Directors consider that the Third Placing represents an opportunity to raise capital for the Corporation at an important time for the Corporation. The net proceeds of the Third Placing, will be HK$142,800,000 (approximately CDN$20.4 million ) which will be used by the Corporation to address its short term capital requirements, corporate objectives and for general corporate purposes. FUND RAISING ACTIVITIES IN THE PAST TWELVE MONTHS Date of announcement Event Estimated net proceeds Intended use of proceeds Actual use of proceeds as at the date of this announcement December 3, 2013 , December 10, 2013 , January 10, 2014 and January 16, 2014 Placing of 197,388,235 Common Shares and 144,751,372 Warrants HK$325,493,200 To address its short term capital requirements, corporate objectives and for general corporate purposes Approximately HK$255,000,000 used as intended EFFECTS ON SHAREHOLDING STRUCTURE The existing shareholding structure of the Corporation and the effect of the final portion of the First Placing and the Third Placing on the shareholding structure of the Corporation immediately following the completion of the final portion of the First Placing and the Third Placing is set out below. Name of Shareholder At the date of this Announcement Immediately after the completion of the final portion of the First Placing and the Third Placing and assuming no Warrant is exercised Immediately after the completion of the final portion of the First Placing and the Third Placing and assuming all outstanding Warrant s are exercised Number of Common Shares % Number of Common Shares % Number of Common Shares % Mr. Hok Ming Tseung 266,666,640 8.44 266,666,640 8.11 266,666,640 7.56 Premium Investment Corporation 239,197,500 7.57 239,197,500 7.28 239,197,500 6.78 Sinopec Century Bright Capital Investment Limited 239,197,500 7.57 239,197,500 7.28 239,197,500 6.78 China Life Insurance 231,411,600 7.33 231,411,600 7.04 231,411,600 6.56 Charter Globe Limited 206,611,560 6.54 206,611,560 6.29 206,611,560 5.86 Pyramid Valley 22,500,000 0.71 106,500,000 3.24 142,000,000 4.03 Jin Quan 22,500,000 0.71 67,500,000 2.05 90,000,000 2.55 Other Shareholders 1,929,671,226 61.11 1,929,671,226 58.71 2,111,022,598 59.87 Total 3,157,756,026 100.00 3,286,756,026 100.00 3,526,107,398 100.00 GENERAL MANDATE TO ISSUE THE NEW COMMON SHARES The Common Shares pursuant to the Units will be allotted and issued under the General Mandate granted to the Board at the annual general meeting of the Corporation held on May 7, 2013 to issue up to 20% of its aggregate issued and outstanding share capital (the " General Mandate "). The General Mandate amount is 575,161,232 Common Shares. As at the date of this announcement, the Corporation has issued 197,388,235 Common Shares under the General Mandate and may be committed to issue another 368,351,372 Common Shares under the placings arrangements announced on December 3, 2013 , December 10, 2013 , January 10, 2014 , January 16, 2014 and this announcement. The Common Shares when issued pursuant to the Units will be credited as fully paid and rank pari passu in all respects with the other existing Common Shares. Completion of the Third Placing is subject to the satisfaction of certain conditions. Shareholders and potential investors are advised to exercise caution when dealing in the securities of the Corporation. ABOUT SUNSHINE OILSANDS LTD. Sunshine Oilsands Ltd. is one of the largest holders of oil sands leases by area in the Athabasca oil sands region, which is located in the province of Alberta, Canada . Since Sunshine's incorporation on 22 February 2007 , Sunshine has secured over one million acres of oil sands leases (equal to approximately 7% of all granted leases in this area). Sunshine's principal operations are the evaluation, development and production of its diverse portfolio of oil sands leases. Its principal operating regions in the Athabasca area are at West Ells, Thickwood, Legend Lake , Harper, Muskwa, Goffer, Pelican and Portage. Sunshine's oil sands leases are grouped into three main asset categories: clastics, carbonates and conventional heavy oil. Email: investorrelations@sunshineoilsands.com Website: www.sunshineoilsands.com FORWARD-LOOKING INFORMATION AND DISCLAIMER This announcement may contain forward-looking information that 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 any words "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 information release 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 "Risk Factors" in our most recent Annual Information Form, "Risk Management" in our current MD&A 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 www.sunshineoilsands.com . This document does not constitute and is not an offer to sell or a solicitation of an offer to buy common shares of Sunshine in the United States (including its territories and possessions, any State of the United States and the District of Columbia ) or elsewhere. SOURCE Sunshine Oilsands Ltd.


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