VANCOUVER, BC, May 30, 2023
/CNW/ - Kainantu Resources Ltd. (TSXV: KRL) (FSE: 6J0) ("KRL"
or the "Company"), the Asia-Pacific focussed gold mining company, is
pleased to announce subscriptions and/or commitments for
C$1,400,000 for the Company's
offering (the "Offering") of a non-brokered private placement of
Senior Convertible Debentures, also known as Convertible Promissory
Notes (the "Notes").
Under the Offering, KRL holds subscriptions (or firm commitments
to subscribe) for C$1,400,000, which
is sufficient for the Company's current initiatives. The
Offering enables KRL to accept subscriptions for total gross
proceeds of up to C$1,800,000.
Key Terms of the
Offering:
- The Company will issue Notes to accredited investors to raise
gross proceeds of up to C$1,800,000,
with subscriptions in hand and/or commitments to subscribe already
for C$1,400,000.
- Shares in Kainantu Resources Pte Ltd ("KRPL"), a Singapore registered company wholly owned by
the Company, will be pledged as collateral.
- The Notes will accrue interest at a rate of 10% per annum,
compounded annually and will mature after a period of 36
months.
- After 12 months from the completion of the Offering, the Notes
will be convertible into units of the Company (the "Units") at a
price of $0.08 per Unit.
- Upon conversion, the Units will be comprised of 1 common share
and 1 full warrant ("Warrant") allowing holders to acquire an
additional share at $0.12 per share
within 36 months of closing.
- The Note contemplates a consolidation of KRL stock on a 2:1
basis prior to the 12-month anniversary of closing.
- After 18 months from closing, the Company will have an option
to request conversion of 50% of debt to common shares if the share
price has traded at or above $0.16
over a 60-day VWAP (and/or 100% if the share price trades at or
above $0.24 for a 60-day VWAP).
- The Note has no negative covenants on subordinate borrowing or
asset disposition.
- The Note will close on or before June
10, 2023.
- The Note is subject prior approval of the TSX Venture Exchange
("TSX-V") and contains such other customary terms as
appropriate.
Matthew Salthouse, CEO of KRL, commented:
"This funding represents a significant milestone for Kainantu
Resources as we continue to unlock the value of our exploration
assets, with particular focus on the Kili Teke project and targets
at Ontenu, adjacent to K92.
On closing, funds will be immediately deployed to these two
projects, which are key initiatives on the pathway to building
intrinsic value across the KRL portfolio.
KRL thanks our investors and stakeholders for their ongoing
support."
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, including focusing on specific high-grade drilling
targets at Ontenu in KRL South.
Proceeds will also be used for general working capital
purposes.
Further Deal Terms
The Offering is expected to close on or before June 10, 2023 and the Company will provide an
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-V.
In connection with the Offering, the Company may pay finder's
fees to certain finders, which fees would be a cash payment of up
to 7% of the gross proceeds raised by purchasers introduced by such
finders, and the issuance of non-transferable compensation warrants
up to 7% of the number of Units purchased by purchasers introduced
by such finders (each, a "Finders Warrant"). Each such Finders
Warrant will be exercisable for one common share at an exercise
price of C$0.12 per common share at
any time prior 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 Finders Warrants will
not be subject to an acceleration clause.
Disclosures:
Current shareholders of the Company, Snowfields Wealth
Management Limited ("SWML"), a private British Virgin Islands holding company
controlled by Geoff Lawrence, a
director of the Company, and Season Cove Limited ("SCL") a private
British Virgin Islands holding
company controlled by Iain Deay,
will participate in the Offering.
Accordingly, the participation of SWML and SCL 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 SWML and SCL'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 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.
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 focussed gold mining company with
three highly prospective gold and 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 mineralization, 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.
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.