Kainantu Resources Announces $2.5MILLION Financing BY Private Placement
KAINANTU RESOURCES ANNOUNCES
$2.5MILLION FINANCING BY PRIVATE
PLACEMENT
/NOT FOR DISTRIBUTION TO
UNITED STATES
NEWSWIRE SERVICES OR FOR RELEASE,
PUBLICATION, DISTRIBUTION, DISSEMINATION, DIRECTLY OR INDIRECTLY IN OR INTO
THE
UNITED STATES
/
VANCOUVER, B.C
,
Oct. 19, 2022
/CNW/ - Kainantu Resources Ltd. (TSXV: KRL) (FSE: 6J0)
("KRL" or the "Company"), the
Asia-Pacific
focused gold mining company, is pleased to announce a
financing to raise up to
C$2.5 million
(the "Offering").
Specifically, KRL announces a non-brokered private placement (the "Offering") for up to 22,727,273
units of the Company (each, a "Unit") at a price of
C$0.11
per Unit for aggregate gross proceeds of
up to
C$2.5 million
.
Each Unit will be comprised of one common share of the Company (each, a "Common Share") and
one common share purchase warrant (each, a "Warrant"), with each Warrant being exercisable for
one Common Share at an exercise price of
C$0.22
per Common Share at any time up to 36 months
following the closing date of the Offering.
Current shareholder and control person of the Company, Snowfields Wealth Management Limited
("Snowfields"), a private
British Virgin Islands
holding company controlled by
Geoff Lawrence
, a
director of the Company, and Axis Metals and Mining Pte. Ltd. ("Axis") a private
Singapore
company
controlled by
Matthew Salthouse
, director and Chief Executive Officer of the Company, will
participate in the Offering. Accordingly, the participation of Snowfields and Axis in the Offering
constitutes a related party transaction under Multilateral Instrument 61-101 -
Protection of Minority
Security Holders in Special Transactions
("MI 61-101"). The Company is exempt from the formal
valuation and minority approval requirement under MI 61-101 as the fair market value of Snowfields'
participation in the Offering does not exceed more than 25% of the market capitalization of the
Company, as set forth in Sections 5.5(a) and 5.7(1)(a) of MI 61-101. The Company may not file a
material change report more than twenty-one (21) days before the expected closing date of the
Offering, as the Company intends to close the Offering as soon as practicable.
The Company anticipates Snowfields, Axis and other significant shareholders will participate in the
Offering to maintain their proportionate equity interests in the Company.
Matthew Salthouse
, CEO of KRL, commented:
"KRL looks forward to closing this financing, with indications of strong support from various
shareholders and investors. Having successfully grown the business through challenging markets,
KRL will use proceeds raised for specific key priorities; being the closure of the Kili Teke deal and
funding a path-way to targeted drilling at the KRL North, Ontenu and Mountain Gate prospects.
These targeted initiatives will drive value for KRL shareholders over both the short and longer
term, as the Company consolidates on its progress and achievements since listing."
Use of Proceeds
The net proceeds from the Offering are intended to be used, but are not limited to, the completion of
the acquisition of the Kili Teke Project (which requires a further payment to
Harmony Gold
(PNG)
Exploration Limited of US400,000 as a condition of closing).
In addition, proceeds will be used to advance exploration programmes focusing on specific high-
grade potential drilling targets at KRL North (adjacent to K92), KRL South (focusing on the Ontenu
target) and May River (primarily at the Mountain Gate prospect).
Proceeds will also be used for general working capital purposes.
Further Deal Terms
The Offering is expected to close on or about
October 31, 2022
and the Company will update on the
private placement in due course.
Completion of the Offering is subject to certain conditions including, but not limited to, the receipt of
all necessary regulatory approvals, including acceptance of the TSX Venture Exchange ("TSXV").
The Warrants will also be subject to an acceleration clause whereby, in the event the volume
weighted average trading price of the Common Shares on the TSXV is equal to or greater than
C$0.44
for a period of ten (10) consecutive trading days, the Company will have the right to
accelerate the expiry date of the Warrants by giving written notice to the holders of the Warrants
that the Warrants will expire on the date that is not less than 10 days from the date notice is
provided by the Company to the Warrant holders.
In connection with the Offering, the Company may pay finder's fees to certain finders, which fees
would be a cash payment equal to 6% of the gross proceeds raised by purchasers introduced by
such finders, and the issuance of non-transferable compensation warrants equal to 6% of the
number of Units purchased by purchasers introduced by such finders (each, a "Compensation
Warrant"). Each such Compensation Warrants will be exercisable for one Common Share at an
exercise price of
C$0.22
per Common Shares at any time prior up to 36 months following the closing
date of the Offering and will be issued on substantially the same terms and conditions as the
Warrants, except that the Compensation Warrants will not be subject to an acceleration clause.
All securities issued pursuant to the Offering and as payment of any finder's fees, including Common
Shares issuable upon the exercise of Warrants or Compensation Warrants, if any, will be subject to
a hold period of four months and one day after the date of closing of the Offering. However, there is
no assurance that the Company will complete the Offering upon the terms set out above, or at all.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy the Units,
nor shall there be any sale of the Units in any jurisdiction in which such offer, solicitation or sale
would be unlawful prior to the registration or qualification under the securities laws of any such
jurisdiction. The Units being offered will not be, and have not been, registered under the United
States Securities Act of 1933, as amended, and may not be offered or sold within
the United States
or to, or for the account or benefit of, a U.S. person.
Neither the TSX-V nor its Regulation Services Provider (as that term is defined in the policies of
the TSX-V) accepts responsibility for the adequacy or accuracy of this release.
About Kainantu Resources (KRL)
Kainantu Resources ("KRL")' is an
Asia-Pacific
focused gold mining company with three highly
prospective gold-copper projects, KRL South, KRL North and the May River Project. All projects are
located in premier mining regions in PNG. Both KRL North and KRL South show potential to host
high-grade epithermal and porphyry mineralisation, as seen elsewhere in the high-grade Kainantu
Gold District. The May River project is in close proximity to the world-renowned Frieda River
Copper-Gold Project, with historical drilling indicating the potential for significant copper-gold
projects. KRL has a highly experienced board and management team with a proven track record of
working together in the region; and an established in-country partner. KRL recently executed an
agreement to acquire the Kili Teke project in the western highlands of PNG.
For further information please visit
https://kainanturesources.com/
Neither the TSX-V nor its Regulation Services Provider (as that term is defined in the policies of
the TSX-V) accepts responsibility for the adequacy or accuracy of this release.
Disclaimer and Forward-Looking Information
This release contains forward-looking statements, which relate to future events or future
performance and reflect management's current expectations and assumptions. Such forward-
looking statements reflect management's current beliefs and are based on assumptions made by
and information currently available to the Company. All statements, other than statements of
historical fact, are forward-looking statements or information. Forward-looking statements or
information in this news release relate to, among other things: the expected closing and use of
proceeds of the Offering. These forward-looking statements and information reflect the Company's
current views with respect to future events and are necessarily based upon a number of
assumptions that, while considered reasonable by the Company, are inherently subject to
significant operational, business, economic and regulatory uncertainties and contingencies. These
assumptions include; success of the Company's projects; prices for gold remaining as estimated;
currency exchange rates remaining as estimated; availability of funds for the Company's projects;
capital, decommissioning and reclamation estimates; prices for energy inputs, labour, materials,
supplies and services (including transportation); no labour-related disruptions; no unplanned
delays or interruptions in scheduled construction and production; all necessary permits, licenses
and regulatory approvals are received in a timely manner; and the ability to comply with
environmental, health and safety laws. The foregoing list of assumptions is not exhaustive. The
Company cautions the reader that forward-looking statements and information involve known and
unknown risks, uncertainties and other factors that may cause actual results and developments to
differ materially from those expressed or implied by such forward-looking statements or
information contained in this news release and the Company has made assumptions and estimates
based on or related to many of these factors. Such factors include, without limitation: fluctuations
in gold prices; fluctuations in prices for energy inputs, labour, materials, supplies and services
(including transportation); fluctuations in currency markets (such as the Canadian dollar versus the
U.S. dollar); operational risks and hazards inherent with the business of mineral exploration;
inadequate insurance, or inability to obtain insurance, to cover these risks and hazards; our ability
to obtain all necessary permits, licenses and regulatory approvals in a timely manner; changes in
laws, regulations and government practices, including environmental, export and import laws and
regulations; legal restrictions relating to mineral exploration; increased competition in the mining
industry for equipment and qualified personnel; the availability of additional capital; title matters
and the additional risks identified in our filings with Canadian securities regulators on SEDAR in
Canada
(available at
www.sedar.com
). Although the Company has attempted to identify important
factors that could cause actual results to differ materially, there may be other factors that cause
results not to be as anticipated, estimated, described, or intended. Investors are cautioned against
undue reliance on forward-looking statements or information. These forward-looking statements
are made as of the date hereof and, except as required under applicable securities legislation, the
Company does not assume any obligation to update or revise them to reflect new events or
circumstances.
SOURCE
Kainantu Resources Ltd.
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For further information:
Kainantu Resources; Matthew Salthouse, Chief Executive Officer (Tel: +
65 8318 8125); Callum Jones, Corporate Development Co-ordinator (Tel: + 61 450 969 697), Email:
[email protected] ; Investor Relations (Jemini Capital):mKevin Shum, Tel: +1 212 219 4670 (702),
Email: [email protected]
CO: Kainantu Resources Ltd.
CNW 05:00e 19-OCT-22