Cancana Closes C$1.5 Million Private Placement, Amends Term Sheet
With The Sentient Group and Appoints A New CFO
TORONTO, ONTARIO--(Marketwired - Feb 25, 2014) - Cancana
Resources Corp. (TSX-VENTURE:CNY) (the "Company" or "Cancana") has
closed a non-brokered private placement of Units, agreed to certain
non-material amendments to the previously announced binding term
sheet with The Sentient Group and appointed Jonathan Richards as
CFO of Cancana.
Cancana is pleased to announce that, effective February 24,
2014, it has closed a non-brokered private placement offering (the
"Offering") for aggregate gross proceeds of approximately
C$1,500,000. The Company issued an aggregate of 7,142,857 units
(each a "Unit"), at a price of C$0.21 per Unit. Each Unit consists
of one common share in the capital of the Company (a "Common
Share") and one common share purchase warrant (each a "Warrant").
Each Warrant entitles the holder thereof to acquire one Common
Share of the Company at a price of C$0.27 until February 24,
2016.
In connection with the Offering, the Company paid an aggregate
amount of C$78,518 in cash finder's fees to certain eligible arm's
length persons and issued 123,149 non-transferable finder's
warrants (the "Finder Warrants") to certain eligible arm's length
persons. Each Finder Warrant is exercisable into a Unit at an
exercise price of C$0.21 per Unit for a period of twenty-four (24)
months from the closing of the Offering.
All securities issued pursuant to the Offering, including the
Common Shares and Warrants comprising the Units and the Common
Shares underlying the Warrants, the Finder Warrants, and the
securities underlying the Finder Warrants, are subject to a four
(4) month and one (1) day statutory hold commencing from closing of
the Offering. The Offering is subject to TSX Venture Exchange
("TSXV") acceptance of requisite regulatory filings. The proceeds
raised from the Offering will be used for general working
capital.
Andrew Male, President and CEO of Cancana, commented: "The
closing of this tranche of the private placement continues to
validate the market's view of our business strategy and the future
prospects of our operations in Brazil. Cancana has continued to
develop Valdirâo, the Company's green-field project, since early
November 2013 and the progress being made and knowledge we are
gaining from this activity continues to be exciting."
Amendments to Binding
Term Sheet with The Sentient Group
Cancana also announces that, further to its press release of
December 20, 2013 (the "December Release"), immediately prior to
the closing of the Offering it entered into an amended and restated
binding term sheet (the "Amended Agreement") with Ferrometals BV
("Ferrometals"), a special purpose vehicle established by The
Sentient Group, amending the term sheet announced in the December
Release (the "Original Agreement") in connection with the
acquisition of Rio Madeira Comercio Importacao E Exportacao De
Minerios, ("Rio Madeira") by Cancana and Ferrometals, the operation
of Rio Madeira as a 50/50 joint venture between Cancana and
Ferrometals and the proposed financings of Cancana by
Ferrometals.
Specifically, the Amended Agreement provides for certain
non-material amendments (as set out below) to reflect the fact that
the acquisition of Rio Madeira has been completed by Ferrometals
and that Ferrometals will increase its aggregate investment in
Cancana in light of Cancana not pursuing certain
previously-disclosed financings.
Pursuant to the Amended Agreement, Ferrometals shall invest an
aggregate of approximately C$7,225,137 in Cancana (the
"Financings"), being an increase from the aggregate investment of
approximately C$5,950,000 as contemplated in the Original Agreement
and as disclosed in the December Release, and Cancana shall no
longer be proceeding with the 3rd party Debenture Financing
disclosed in the December Release, nor with the C$1 million
financing share exchange arrangement with Global Resources
Investment Trust previously disclosed in the Company's news release
dated October 10, 2013. The terms of the Financings shall now
consist of the following:
1. Ferrometals has purchased 1,190,476 Units of the 7,142,857
Units of Cancana issued in the Offering disclosed above, at a price
of C$0.21 per Unit for gross proceeds of approximately C$250,000 to
Cancana.
2. Ferromentals will purchase 4,167,180 units (the "2nd Tranche
Units") of Cancana at a price of C$0.27 per 2nd Tranche Unit for
gross proceeds of C$1,125,138.50 to Cancana. The 2nd Tranche Units
to be issued to Ferrometals will form part of a non-brokered
private placement offering (the "Second Tranche Offering") of up to
6,393,106 2nd Tranche Units for aggregate gross proceeds of
C$1,726,138.50 to Cancana. Each 2nd Tranche Unit shall consist of
one Common Share and one Common Share purchase warrant (a "2nd
Tranche Warrant"), with each 2nd Tranche Warrant exercisable into
one Common Share at a price of C$0.34 per Common Share for a period
of two (2) years from the date of issuance. The Second Tranche
Offering is expected to close on or before March 6, 2014.
3. As disclosed in the December Release, Ferrometals will
purchase 8,500,000 units, (the "3rd Tranche Unit"), of Cancana at a
price of C$0.20 per 3rd Tranche Unit. Each 3rd Tranche Unit shall
consist of one Common Share and one Common Share purchase warrant
(a "3th Tranche Warrant"), for aggregate gross proceeds of C$1.7
million (the "3rd Tranche Offering"). Each 3rd Tranche Warrant
shall be exercisable into one Common Share at a price of C$0.25 per
Common Share and shall be exercisable for a period of 2 years from
the date of issuance. As discussed above, Cancana will no longer be
proceeding with the Debenture Financing, which is being replaced
with the Offering and the 2nd Tranche Offering, and accordingly,
the "Interim Financing" (as defined and as disclosed in the
December Release) will not no longer be completed in advance of the
closing of the 3rd Tranche Offering, with the entire 3rd Tranche
Offering being completed following the receipt of required
regulatory and shareholder approvals.
4. As disclosed in the December Release, Ferrometals will
purchase a secured convertible note, (the "Convertible Note"), to
be issued by Cancana for a purchase price of US$4.15 million
(approximately C$4.25). The Convertible Note will have a term of 3
years and bear interest at a rate of 8% per annum, which interest
shall be capitalized for the first 2 years. The principal and any
capitalized interest shall be convertible, in whole or in part,
into Common Shares at a price of C$0.20 per Common Share at the
option of Ferrometals.
Pursuant to the terms of the Amended Agreement, Ferrometals will
continue to have the board nomination rights as disclosed in the
December 2013 release, with such rights to take effect after
closing of the 3rd Tranche Offering and the issuance of the
Convertible Note. All other terms of the Original Agreement, except
those specifically outlined herein, remain materially unchanged in
the Amended Agreement.
The 2nd Tranche Offering remains subject to receipt of all
required regulatory approvals, including TSXV acceptance of
requisite regulatory filings. The 3rd Tranche Offering, the
issuance of the Convertible Note as well as the Cancana Rio
Acquisition and the MLB Transfer (each as defined in the December
Release) continue to be subject to regulatory approval and the
approval of the shareholders of Cancana at a meeting to be held on
April 14, 2014.
Appointment of
CFO
Cancana is pleased to announce the appointment of Jonathan
Richards to the position of Chief Financial Officer of the Company,
effective February 24, 2014.
Jonathan Richards was previously an audit manager at a premier
Canadian chartered accountant firm where he specialized in the
mining industry. He acquired significant accounting experience
working with mineral exploration and development companies in
Canada and throughout the world. Mr. Richards completed a
bachelor's degree in management studies with first-class honors
from the University of Waikato, New Zealand, and gained his
membership of the New Zealand Institute of Chartered Accountants in
2005 while working for a Big 4 accounting firm and subsequently
joined the Institute of Chartered Accountants of British Columbia.
In addition to his audit experience, Mr. Richards has experience
working as the chief financial officer for other public mineral
exploration and development companies listed on the TSX and
TSXV.
About
Cancana
Cancana is an exploration stage company that has transitioned
into production with assets in Brazil and Canada. The Company has
been seeking projects that expand its resource base and provide for
near term production and revenue. All available resource reports
and information on the Company's properties are located on the
Company website: www.cancanacorp.com.
For further information about Cancana, please visit the
Company's website.
Issued on behalf of the Board of Directors of Cancana Resources
Corp.
Andrew Male, President, CEO and Director
This press release contains forward-looking information
under Canadian securities legislation. forward-looking information
includes, but is not limited to, statements with respect to
completion of the Financings, the development potential and
timetable of the Rio Madeira project and Cancana's other assets in
Brazil and Canada; Cancana's ability to raise additional funds
necessary; the future price of manganese, the estimation of mineral
reserves and mineral resources; conclusions of economic evaluation;
the realization of mineral reserve estimates; the timing and amount
of estimated future production, development and exploration; costs
of future activities; capital and operating expenditures; success
of exploration activities; mining or processing issues; currency
exchange rates; government regulation of mining operations; and
environmental risks. Generally, forward-looking statements can be
identified by the use of forward-looking terminology such as
"plans", "expects" or "does not expect", "is expected", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates" or
"does not anticipate", or "believes", or variations of such words
and phrases or statements that certain actions, events or results
"may", "could", "would", "might" or "will be taken", "occur" or "be
achieved". Forward-looking statements are based on the opinions and
estimates of management as of the date such statements are made.
Forward-looking statements are subject to known and unknown risks,
uncertainties and other factors that may cause the actual results,
level of activity, performance or achievements of Cancana to be
materially different from those expressed or implied by such
forward-looking statements, including but not limited to those
risks described in the annual information form of Cancana and in
its public documents filed on SEDAR from time to time. Although
management of Cancana has attempted to identify important factors
that could cause actual results to differ materially from those
contained in forward-looking statements, there may be other factors
that cause results not to be as anticipated, estimated or intended.
There can be no assurance that such statements will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on forward-looking
statements. Cancana does not undertake to update any
forward-looking statements, except in accordance with applicable
securities laws.
Cancana Resources Corp.+1 403 269
2065cancana.ir@cancanacorp.comwww.cancanacorp.com