CALGARY, ALBERTA–(Marketwired – March 16, 2017) –
NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAW.
Prairie Provident Resources Inc. (“Prairie Provident” or the “Company”) (TSX:PPR) is pleased to announce the closing of its previously announced bought deal equity financing through a syndicate of underwriters (the “Underwriters”) led by Mackie Research Capital Corporation (“MRCC”) raising total gross proceeds of approximately $8.0 million (the “Offering”).
The Company issued 5,971,000 subscription receipts (“Subscription Receipts”) at a price of $0.67 per Subscription Receipt and 5,195,000 common shares issued on a “flow-through” basis pursuant to the Income Tax Act (Canada) (“Flow Through Shares”) at a price of $0.77 per Flow-Through Share. The Underwriters have an over-allotment option exercisable in whole or in part at any time prior to April 15, 2017 to purchase up to an additional 15% of the number of Subscription Receipts and Flow-Through Shares sold today at the Offering prices, for total additional gross proceeds of up to approximately $1,200,000.
Purchases under the Offering included director and officer participation together with outside investors. Tim Granger, CEO of Prairie Provident, personally purchased 373,000 Subscription Receipts.
The gross proceeds from the sale of Subscription Receipts will be held in escrow pending closing of the Company’s previously announced $41 million acquisition of strategic assets in the Greater Red Earth area of northern Alberta (the “Acquisition”). Upon closing of the Acquisition, expected to occur on or about March 22, 2017, the net proceeds from the sale of Subscription Receipts will be released from escrow to the Company, and the purchasers of the Subscription Receipts will automatically receive, for no additional consideration and without any action on their part, for every Subscription Receipt held, one unit of Prairie Provident comprised of one common share (a “Common Share”) and one-half of one common share purchase warrant (each whole warrant, a “Warrant”). Each Warrant will entitle the holder to acquire one common share (a “Warrant Share”) at an exercise price of $0.87 per share until March 16, 2019. If the Acquisition is not completed at or before 5:00 p.m. (Calgary time) on March 31, 2017 (or such later date as the Company and MRCC, on behalf of the Underwriters, may agree), then the purchase price for the Subscription Receipts will be returned pro rata to purchasers, together with a pro rata portion of interest earned on the escrowed funds.
For each Flow-Through Share, the Company has covenanted to incur or be deemed to incur on or before December 31, 2018, and to renounce to the purchaser, effective on or before December 31, 2017, qualifying “Canadian exploration expenses” within the meaning of the Income Tax Act (Canada) in an amount equal to the purchase price of the Flow-Through Share.
The Toronto Stock Exchange (“TSX”) has conditionally approved the listing of the Flow-Through Shares, the Common Shares and Warrants issuable pursuant to the Subscription Receipts, and the Warrant Shares issuable upon exercise of the Warrants, subject to the Company fulfilling all of the requirements of TSX on or before May 22, 2017.
This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities of the Company in the United States or in any other jurisdiction in which any such offer, solicitation or sale would be unlawful. The securities described in this news release have not been and will not be registered under the United States Securities Act of 1933, as amended (the “1933 Act”) or any state securities laws, and may not be offered or sold in the United States or to U.S. Persons (as that term is defined in Regulation S under the 1933 Act) except in transactions exempt from the registration requirements of the 1933 Act and applicable state securities laws.
READER ADVISORY
Forward-Looking Information. Certain information included in this press release constitutes forward-looking information under applicable securities legislation. Forward-looking information typically contains statements with words such as “anticipate”, “believe”, “expect”, “plan”, “intend”, “estimate”, “propose”, “project” or similar words suggesting future outcomes or statements regarding an outlook. Forward-looking information in this press release includes, but is not limited to, statements concerning closing and timing of the Acquisition, the use of proceeds of the Offering, the listing on TSX of the Flow-Through Shares, the Common Shares and Warrants issuable pursuant to the Subscription Receipts and the Warrant Shares issuable upon exercise of the Warrants, the issuance of the Common Shares and the Warrants underlying the Subscription Receipts, and the potential exercise of the Underwriters’ over-allotment option to purchase additional Subscription Receipts and Flow-Through Shares.
The forward-looking information contained in this press release is based on certain expectations and assumptions made by Prairie Provident, including expectations and assumptions concerning the likelihood and ability to obtain all required approvals and satisfy all outstanding conditions to the completion of the Acquisition and the listing on TSX of the Flow-Through Shares, the Common Shares and Warrants issuable pursuant to the Subscription Receipts, and the Warrant Shares issuable upon exercise of the Warrants, and the willingness and ability of the vendor under the Acquisition to complete the transaction. Although Prairie Provident believes that the expectations and assumptions on which the forward-looking information in this press release is based are reasonable, undue reliance should not be placed on forward-looking information because Prairie Provident can give no assurance that such information, or its underlying expectations and assumptions, will prove to be correct. Since forward-looking information addresses future events and conditions, it necessarily involves inherent risks and uncertainties that could cause actual results to differ materially from those currently anticipated. These risks and uncertainties affecting the forward-looking information include, but are not limited to, the inability to obtain required approvals despite the Company’s efforts, whether as a result of third party action or otherwise, and the inability or unwillingness of counterparties to complete transactions as agreed. The foregoing lists of expectations and assumptions, and risks and uncertainties, are not exhaustive.
The forward-looking information contained in this press release is made as of the date hereof and Prairie Provident undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless required by applicable securities laws. All forward-looking information contained in this press release is expressly qualified by this cautionary statement.
Tim Granger
President and Chief Executive Officer
(403) 292-8110
[email protected]
Prairie Provident Resources Inc.
Mimi Lai
Chief Financial Officer
(403) 292-8171
[email protected]
www.ppr.ca
