Kainantu Resources Closes C$1.7M First Tranche of Its Previously Announced C$2.5 Million Private Placement Financing
KAINANTU RESOURCES CLOSES C$1.7M
FIRST TRANCHE OF ITS PREVIOUSLY
ANNOUNCED C$2.5 MILLION PRIVATE
PLACEMENT 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
,
Nov. 3, 2022
/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 the first tranche of its previously announced private placement financing of
C$2.5 million
(the
"Offering"), originally announced on
October 19, 2022
.
Under the first tranche of the Offering, the Company has issued an aggregate of 15,635,790 units of
the Company (the "Units") at a price of
C$0.11
per Unit to raise gross proceeds of
C$1,719,937
.
Each Unit is 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, with each Warrant being subject to acceleration in certain
circumstances.
The Common Shares and Warrants issued pursuant to the Offering, as well as the Common Shares
issuable upon exercise of the Warrants, if any, are subject to a statutory hold period of
approximately four months ending on
March 4, 2023
, in accordance with applicable securities law.
A second and final tranche of the Offering of up to an additional approximately
C$0.8 million
remains
open and is expected to close on or about
December 2, 2022
.
Matthew Salthouse
, CEO of KRL, commented:
"In challenging markets, we are encouraged and pleased with the support from current and new
investors participating in our tranche 1 raising. In particular, we are grateful for the ongoing
commitment from the founding shareholder consortium.
Progress continues at our KRL North and KRL South/Ontenu prospects as we move towards
defining potential high-grade drilling targets, with proceeds of the placement to support this work."
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 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.
Finder's Fees
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 Share 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.
Upon the closing of the first tranche of the Offering, the Company will pay the following finder's fees
and issue the following Compensation Warrants to such finders, as noted:
Name of Finder
Cash Finder's Fees
Compensation Warrants
Intrynsyc Capital Corp.
(1)
$ 30,000.00
272,727
Canaccord Genuity Corp.
$ 24,618.00
223,800
CM-Equity AG
(1)
$ 3,300.00
30,000
PI Financial Corp.
$ 1,320.00
12,000
TOTAL
$ 59,238.00
538,527
Notes:
1) Payment of finder's fee and issuance of Compensation Warrants remain subject to the prior approval of the TSX Venture Exchange.
Multilateral Instrument 61-101 – Related Party Transaction
Axis Mining and Minerals Pte. Ltd. ("Axis") and Season Cove Limited ("Season Cove") are all
insiders of the Company by virtue of:
(a) in the case of Axis, it is controlled by
Matthew Salthouse
, director and Chief Executive
Officer of the Company; and
(b) in the case of
Season Cove
, holding 11.75% of the Common Shares of the Company on
a partially diluted basis.
Axis and
Season Cove
participated in the first tranche of the Offering by purchasing 909,091 Units,
and 1,645,769 Units, respectively, for an aggregate subscription price of
C$100,000
and
C$181,035
, 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 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.
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.
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]; Investor Relations (Jemini Capital): Kevin Shum, Tel: +1 212 219
4670 (702), Email: [email protected]
CO: Kainantu Resources Ltd.
CNW 18:15e 03-NOV-22