Kainantu Resources Announces Senior Convertible Debenture Offering; Confirms Commitments FOR C$1,400,000
KAINANTU RESOURCES ANNOUNCES
SENIOR CONVERTIBLE DEBENTURE
OFFERING; CONFIRMS COMMITMENTS FOR
C$1,400,000
VANCOUVER, BC
,
May 30, 2023
/CNW/ - Kainantu Resources Ltd. (TSXV: KRL) (FSE: 6J0)
("KRL" or the "Company"), the
Asia-Pacific
focussed gold mining company, is pleased to announce
subscriptions and/or commitments for
C$1,400,000
for the Company's offering (the "Offering") of a
non-brokered private placement of Senior Convertible Debentures, also known as Convertible
Promissory Notes (the "Notes").
Under the Offering, KRL holds subscriptions (or firm commitments to subscribe) for
C$1,400,000
,
which is sufficient for the Company's current initiatives. The Offering enables KRL to accept
subscriptions for total gross proceeds of up to
C$1,800,000
.
Key Terms of the Offering:
The Company will issue Notes to accredited investors to raise gross proceeds of up to
C$1,800,000
, with subscriptions in hand and/or commitments to subscribe already for
C$1,400,000
.
Shares in Kainantu Resources Pte Ltd ("KRPL"), a
Singapore
registered company wholly owned
by the Company, will be pledged as collateral.
The Notes will accrue interest at a rate of 10% per annum, compounded annually and will
mature after a period of 36 months.
After 12 months from the completion of the Offering, the Notes will be convertible into units of
the Company (the "Units") at a price of
$0.08
per Unit.
Upon conversion, the Units will be comprised of 1 common share and 1 full warrant ("Warrant")
allowing holders to acquire an additional share at
$0.12
per share within 36 months of closing.
The Note contemplates a consolidation of KRL stock on a 2:1 basis prior to the 12-month
anniversary of closing.
After 18 months from closing, the Company will have an option to request conversion of 50% of
debt to common shares if the share price has traded at or above
$0.16
over a 60-day VWAP
(and/or 100% if the share price trades at or above
$0.24
for a 60-day VWAP).
The Note has no negative covenants on subordinate borrowing or asset disposition.
The Note will close on or before
June 10, 2023
.
The Note is subject prior approval of the TSX Venture Exchange ("TSX-V") and contains such
other customary terms as appropriate.
Matthew Salthouse, CEO of KRL, commented:
"This funding represents a significant milestone for Kainantu Resources as we continue to unlock
the value of our exploration assets, with particular focus on the Kili Teke project and targets at
Ontenu, adjacent to K92.
On closing, funds will be immediately deployed to these two projects, which are key initiatives on
the pathway to building intrinsic value across the KRL portfolio.
KRL thanks our investors and stakeholders for their ongoing support."
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
US$400,000
as a condition of closing).
In addition, proceeds will be used to advance exploration programmes, including focusing on specific
high-grade drilling targets at Ontenu in KRL South.
Proceeds will also be used for general working capital purposes.
Further Deal Terms
The Offering is expected to close on or before
June 10, 2023
and the Company will provide an
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-V.
In connection with the Offering, the Company may pay finder's fees to certain finders, which fees
would be a cash payment of up to 7% of the gross proceeds raised by purchasers introduced by
such finders, and the issuance of non-transferable compensation warrants up to 7% of the number
of Units purchased by purchasers introduced by such finders (each, a "Finders Warrant"). Each such
Finders Warrant will be exercisable for one common share at an exercise price of
C$0.12
per
common share at any time prior 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 Finders
Warrants will not be subject to an acceleration clause.
Disclosures:
Current shareholders of the Company, Snowfields Wealth Management Limited ("SWML"), a private
British Virgin Islands
holding company controlled by
Geoff Lawrence
, a director of the Company, and
Season Cove Limited ("SCL") a private
British Virgin Islands
holding company controlled by
Iain
Deay
, will participate in the Offering.
Accordingly, the participation of SWML and SCL 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 SWML and SCL's 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.
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
focussed gold mining company with three highly
prospective gold and 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
mineralization, 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.
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]; Corporate Advisor (Jemini Capital): Kevin Shum, Tel: +1 212 219 4670 (702),
Email: [email protected]
CO: Kainantu Resources Ltd.
CNW 06:00e 30-MAY-23