/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 info@krl.com.sg. 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.