Mr. J. Jay Park reports
RECONAFRICA ANNOUNCES COMPLETION OF PRIVATE PLACEMENT
Reconnaissance Energy Africa Ltd. has completed its previously announced non-brokered private placement financing through the issuance of five million units of the company at 68 cents per unit for aggregate gross proceeds of $3.4-million. Each unit is composed of one common share of the company and one common share purchase warrant, with each warrant being exercisable into one common share of the company at an exercise price of $1 per share until Feb. 4, 2025.
All securities issued under the private placement are subject to a four-month-and-one-day restricted resale period expiring on June 5, 2020, in accordance with the policies of the TSX Venture Exchange and applicable securities laws. In connection with the private placement, the company paid, in aggregate, finders' fees totalling $182,510.40 in cash to: (i) Haywood Securities Inc.; (ii) Canaccord Genuity Corp.; and (iii) PI Financial Corp., in respect of subscribers introduced to the company by such finders.
The net proceeds of the private placement are expected to be used by Reconnaissance to finalize the purchase of a drilling rig to be mobilized from the port of Houston to the company's drilling permits in northeast Namibia and for general corporate purposes.
Securities law disclosure
Certain officers, insiders and advisers of the company, including Bill Cathey (technical adviser), Craig Steinke (major shareholder) and Carlos Escribano (chief financial officer), participated in the private placement by subscribing for, in aggregate, 262,794 units for gross proceeds of $178,700.20. Accordingly, participation by insiders of the company in the private placement constitutes a related-party transaction under Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions). The company is exempt from the formal valuation requirement of MI 61-101 pursuant to Subsection 5.5(b) of MI 61-101. The company is exempt from the minority shareholder approval requirement of MI 61-101 pursuant to Subsection 5.7(b) of MI 61-101. A material change report in respect of the private placement will be filed fewer than 21 days before closing of the private placement as the closing date was not settled until shortly prior to closing and the company wished to complete the private placement in an expeditious manner for sound business reasons.
Reconnaissance is a junior oil and gas company engaged in the development of the newly discovered Kavango sedimentary basin, in northeast Namibia, where the company holds a 90-per-cent working interest in petroleum licences, comprising approximately 6.3 million contiguous acres.
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