Kainantu Resources Announces Amended Terms and Closing of the Third Tranche FOR C$0.3M of Its Previously Announced C$1.8 Million Convertible Debenture Financing
KAINANTU RESOURCES ANNOUNCES
AMENDED TERMS AND CLOSING OF THE
THIRD TRANCHE FOR C$0.3M OF ITS
PREVIOUSLY ANNOUNCED C$1.8 MILLION
CONVERTIBLE DEBENTURE FINANCING
/NOT FOR DISTRIBUTION TO
UNITED STATES
NEWSWIRE SERVICES OR FOR RELEASE,
PUBLICATION, DISTRIBUTION, DISSEMINATION, DIRECTLY OR INDIRECTLY IN OR INTO
THE
UNITED STATES
/
VANCOUVER, BC
,
Sept. 1, 2023
/CNW/ - Kainantu Resources Ltd. (TSXV: KRL) (FSE: 6J0)
("
KRL
" or the "
Company
"), the
Asia-Pacific
focused gold mining company, is pleased to announce
the closing of the third tranche of its private placement financing of
C$1.8 million
(the "
Offering
"),
originally announced on
May 30, 2023
.
In the first tranche of the Offering, the Company has issued senior convertible debenture units (the
"
First Tranche Debenture Units
") with an aggregate principal amount of
C$503,164.06
, as
announced on
June 22, 2023
.
In the second tranche of the Offering, the Company has issued senior convertible debenture units
(the "
Second Tranche Debenture Units
") with an aggregate principal amount of
C$296,835.94
, as
announced on
July 18, 2023
.
In the third tranche of the Offering, the Company has issued senior convertible debenture units (the
"
Third Tranche Debenture Units
", and together with the First Tranche Debenture Units and the
Second Tranche Debenture Units, the "
Debenture Units
") with an aggregate principal amount of
C$310,000
.
A final tranche of the Offering of up to an additional
C$690,000
is expected to close on or before
September 8, 2023
.
Each Debenture Unit consists of: (i) a 10% convertible secured debenture (a "
Convertible
Debenture
") convertible into common shares of the Company ("
Common Shares
") at a conversion
price of
C$0.08
per common share (the "
Conversion Price
") at any time given a period
commencing twelve months from the closing date and ending on the date that is 36 months from the
closing date, provided that if the Company does not complete a consolation of the issued and
outstanding common shares that would result in a Conversion Price of at least
C$0.10
on a post-
consolidation basis, the Conversion Price at any time during the period commencing 12 from the
closing date and ending on the date that is 36 months from the closing date shall be
C$0.10
, and
maturing three years from the closing date of each tranche; and (ii) such number of common share
purchase warrants (the "
Warrants
") that would result from dividing the principal amount of such
Debenture Unit by
C$0.08
, with each Warrant entitling the holder thereof to acquire one common
share of the Company (each, a "
Warrant Share
") at
C$0.12
per share for a period of three years
from the closing of the applicable tranche.
In the event that at any time following eighteen months after the issuance of a Convertible Debenture
the 60-day volume-weighted average price of the Common Shares on the TSX Venture Exchange is
equal to or greater than 200% of the Conversion Price, the Company will have the right to exercise
50% of the outstanding principal amount of such Convertible Debenture into Common Shares. If such
60-day VWAP is equal to or greater than 300% of the conversion price, the Company has the right
to exercise all or a portion of the outstanding principal amount of such Convertible Debenture into
Common Shares.
The terms of the Offering set out herein amend and restate the terms of the Offering as described in
the news releases referred to above, which essentially mistook the detachable warrants for
underlying warrants of the convertible debentures.
The Convertible Debentures, Warrants, Warrant Shares, Finder Warrants (as defined below) and
Finder Warrant Shares (as defined below) are subject to a statutory hold period of four months and
a day ending on four months and a day after the date of issuance thereof, in accordance with
applicable securities law.
Finder's Fees
The Company has paid to Lightstream Capital Ltd. and Haywood Securities Inc. (the "
Finders
")
C$21,600
in cash and issued to the Finders a total of 180,000 common shares purchase warrants
(the "
Finder Warrants
"), each Finder Warrant entitling the holder thereof to acquire one common
share of the Company (each, a "
Finder Warrant Share
") at
C$0.12
per share for a period of three
years from the closing of the applicable tranche.
Use of Proceeds
The net proceeds from the Offering are intended to be used, but are not limited to, the potential
completion of the acquisition of the Kili Teke Project (which requires a further payment to
Harmony
Gold
(PNG) Exploration Limited of
US$400,000
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.
Use of Proceeds
Amount
Weighting
Completion of Kili Teke Acquisition
C$530,000
47.75 %
Exploration activities
C$420,000
37.84 %
General Working Capital & Investor Relations
C$160,000
14.41 %
TOTAL
C$1,110,000
100 %
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 near 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.
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 use of proceeds from the
Offering; the Conversion Price of the Convertible Debentures; the potential consolidation of the
authorized share capital of the Company; and the potential of both KRL North and KRL South.
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.sedarplus.ca
). 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); Stacey Halliwell, General Manager - Investor Relations (Tel: + 65 975); Email:
CO: Kainantu Resources Ltd.
CNW 17:00e 01-SEP-23