Kainantu Resources Closes C$0.3M Second Tranche of Its Previously Announced C$1.8 Million Convertible Debenture Financing
KAINANTU RESOURCES CLOSES C$0.3M
SECOND TRANCHE 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
,
July 18, 2023
/CNW/ - Kainantu Resources Ltd. (TSXV: KRL) (FSE: 6J0) ("KRL"
or the "Company"), the
Asia-Pacific
focused gold mining company, is pleased to announce that it has
closed a further
C$0.3 million
second 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 an aggregate of 6,289,551 senior
convertible debentures (the "Debentures") at a price of
C$0.08
per Debenture to raise gross
proceeds of
C$503,164.06
originally announced on
June 22, 2023
.
Under the second tranche of the Offering, the Company has issued an aggregate of 3,710,449
senior convertible debentures (the "Debentures") at a price of
C$0.08
per Debenture to raise gross
proceeds of
C$296,835.94
.
The Debentures, which will be issued pursuant to the Private Placement, will have a conversion price
of
C$0.08
per common share of the Company (the "Conversion Price"), provided that if the
Company does not complete a consolidation of its outstanding common shares (the "Consolidation")
that would result in a conversion price of at least
$0.10
on a post-Consolidation basis is prior to the
date that is 12 months from the date of issuance of the convertible notes, the Conversion Price shall
thereafter be
$0.10
.
Closing of the Private Placement and the Consolidation remain subject to approval from the TSX
Venture Exchange. The Debentures and the common shares of the Company issuable upon
conversion of the Debentures are subject to a statutory hold period of four months and a day ending
on
November 19, 2023
, in accordance with applicable securities law.
A final tranche of the Offering of up to an additional approximately
C$1.0 million
remains open and is
expected to close on or before
August 11, 2023
with further updates provided in due course.
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
38 %
Exploration activities
C$420,000
30 %
General Working Capital & Investor Relations
C$450,000
32 %
TOTAL
C$ 1,400,000
100 %
Finder's Fees
No finders' fees are payable on funds raised in this tranche of the private placement.
Multilateral Instrument 61-101 – Related Party Transaction
Snowfields Wealth Management Limited ("Snowfields") and Season Cove Limited ("Season Cove")
are both insiders of the Company by virtue of:
(a)
in the case of Snowfields, it is controlled by Geoffrey Lawrence, director, and holds 19.99% of the Common Shares of the Company on a partially diluted basis; and
(b)
in the case of Season Cove, holding 12.09% of the Common Shares of the Company on a partially diluted basis.
Snowfields Wealth Management Limited and
Season Cove
participated in the first and second
tranches of the Offering by purchasing 3,639,236 Units, and 1,955,816 Units, respectively, for an
aggregate subscription price of
C$291,138.88
and
C$156,465.28
, respectively and accordingly, the
Offering constitutes a "related party transaction" for the Company within the meaning of Multilateral
Instrument 61-101 -
Protection of Minority Security Holders in Special Transactions
("MI 61-101").
The Company is exempt from the requirements to obtain a formal valuation and minority shareholder
approval under MI 61-101 as the fair market value of Axis' and
Season Cove'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 will not file a material change report more
than twenty-one (21) days before the expected closing date of the Offering, as the Company wished
to close the Offering as soon as practicable. A copy of the early warning reports to be filed by the
Company in connection with the Offering will be available on SEDAR at
www.sedar.com
under the
Company's profile and may also be obtained by contacting the Company at
. This
news release is issued under the early warning provisions of the Canadian securities legislation.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) 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 four highly
prospective gold-copper projects, the Kili Teke Project, 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.
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 of a second
tranche of the Offering and use of proceeds from the closing of the first tranche of the Offering the
Conversion Price and the potential Consolidation. 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 & Commercial Associate (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 20:14e 18-JUL-23