10:12:15 EDT Thu 28 Mar 2024
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Kainantu Resources Ltd
Symbol KRL
Shares Issued 54,574,559
Close 2022-01-21 C$ 0.18
Market Cap C$ 9,823,421
Recent Sedar Documents

Kainantu closes $1.1-million final tranche of placement

2022-01-21 22:12 ET - News Release

Mr. Matthew Salthouse reports

KAINANTU RESOURCES CLOSES OVERSUBSCRIBED AND UPSIZED $2.77 MILLION PRIVATE PLACEMENT FINANCING

Kainantu Resources Ltd. has closed the second tranche of its previously announced upsized private placement financing to raise an aggregate of $2.77-million.

The offering was originally announced on Dec. 1, 2021, to raise gross proceeds of up to $1.5-million (with relevant financing terms detailed in that announcement). Due to oversubscriptions, the offering was subsequently upsized to raise aggregate gross proceeds of $2.77-million, as most recently announced on Jan. 20, 2022.

Under the second and final tranche of the offering, the company has issued an aggregate of 6,118,667 units of the company at a price of 18 cents per unit to raise gross proceeds of an aggregate of $1,101,360. Each unit is composed of one common share of the company and one common share purchase warrant, with each warrant being exercisable for one common share at an exercise price of 36 cents per common share at any time up to 36 months following the closing date of the offering, with each warrant being subject to acceleration in certain circumstances.

Under the private placement, the company has now issued a total of 15,387,492 units for aggregate gross proceeds of $2.77-million under the full offering (inclusive of the issuance of 9,268,825 units on Jan. 4, 2022, to raise gross proceeds of $1,668,388 under the first tranche of the offering).

Matthew Salthouse, chief executive officer of Kainantu, commented: "The oversubscribed financing is a testament to the operational progress and value accretive acquisitions KRL has executed in its first year of listing.

"With the proceeds of the financing, KRL will continue to drive exploration activities at KRL North and KRL South, where the company remains on track to delineate drilling targets at the East Avanionfi and Yaoro Ridge prospects. KRL will also conduct further studies on the copper and [electric vehicle] metal potential at its May River project, which sits within 10 kilometres of the Frieda River copper project, with a resource of 12 million tonnes of copper and 19 million ounces of gold.

"KRL is well positioned to generate strong shareholder returns in 2022 given ongoing insider commitment, strong board and management, and local Asia Pacific on-the-ground expertise. I look forward to 2022 as KRL continues to pursue our initiatives, with gold and copper forecast to rally in the current inflationary environment."

Use of proceeds

The net proceeds from the offering are intended to be used, but are not limited to, exploration programs at KRL North and KRL South leading to delineation of drilling targets, sampling and technical reports for the May River project, and general working capital purposes.

Finders' fees

In connection with the offering, the company previously announced it may pay cash finders' fees equal to 6 per cent of the gross proceeds raised from purchasers introduced by such finders, and the issuance of non-transferable compensation warrants equal to 6 per cent of the number of units purchased by purchasers introduced by such finders. Each such compensation warrant is exercisable for one common share at an exercise price of 36 cents per common share at any time prior to up to 36 months following the closing date of the offering and has been issued on substantially the same terms and conditions as the warrants, except that the compensation warrants will not be subject to an acceleration clause.

The company paid finders' fees and issued compensation warrants to finders under the second and final tranche of the offering as set out in the attached table.

 
                     FINDERS' FEES PAID UNDER FINAL TRANCHE

Name of finder                      Cash finders' fees         Compensation warrants

CM-Equity AG                                    $6,480                        36,000
Canaccord Genuity Corp.                        $25,326                       140,700
4Front Capital Partners Inc.                    $7,020                        39,000
Jemini Capital Inc.                         $20,055.60                       111,420
Total                                       $58,881.60                       327,120

All securities issued pursuant to the offering, including common shares issuable upon the exercise of warrants or compensation warrants, are and will be subject to a hold period of four months and one day after the date of closing of the relevant tranche of the offering.

Multilateral Instrument 61-101 (related-party transaction)

Season Cove Ltd. participated in the first tranche of the offering and purchased 638,889 units for an aggregate subscription of $115,000. Participation by Season Cove in the offering constituted 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 provides exemptions from the requirements to obtain a formal valuation and minority shareholder approval in connection with the participation by Season Cove in the offering, and the company has relied on the exemptions available in sections 5.5(a) and 5.7(1)(a) of MI 61-101.

About Kainantu Resources Ltd.

Kainantu is an Asia Pacific-focused gold mining company with two highly prospective gold projects, KRL South and KRL North, in a premier mining region, the high-grade Kainantu gold district of Papua New Guinea, which is famous for one of the newest and highest-grading gold mines, K92 Mining (nine-gram-per-tonne head grade).

Both of Kainantu's projects show potential to host high-grade epithermal and porphyry mineralization as seen elsewhere in the district. Kainantu has a highly experienced board and management team, with a proven record of working together in the region and an established in-country partner in Asia Pacific Energy Ventures (APEV).

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