/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.