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Contact Announces Increase to Previously Announced Private Placement
August 1, 2013, (Calgary, Alberta) – Contact Exploration Inc. ("Contact" or the "Company") (TSX-V:CEX) is pleased to announce that due to demand from potential investors, it has increased the size of its previously announced brokered private placement, to be conducted on a commercially reasonable "best efforts" agency basis through a syndicate of agents led by Integral Wealth Securities Limited and including Dundee Securities Corp., MGI Securities Inc. and Beacon Securities Ltd. (collectively, the "Agents"), of common shares (the "Shares") of the Company and Shares to be issued on a "flow-through" basis pursuant to the Income Tax Act (Canada) (the "Flow-Through Shares") (the "Private Placement").
Specifically, Contact has agreed to increase the number of Shares to up to 14,009,616 Shares (from 12,500,000 Shares) at an issue price of $0.26 per Share and to increase the number of Flow-Through Shares to up to 9,525,000 Flow-Through Shares (from 5,833,334 Flow-Through Shares) at an issue price of $0.30 per Flow-Through Shares for aggregate gross proceeds of up to $6,500,000.16. As a result of the increased size of the Private Placement, the Agents and Contact have agreed to terminate the previously contemplated Agents' option. The Private Placement is expected to close on or about August 8, 2013.
Proceeds from the Private Placement will be used to fund the Company's drilling and operational activity in the East Kakwa Montney Project area in the Deep Basin in Alberta and for general corporate purposes. In particular, Contact will incur eligible Canadian Exploration Expenses (within the meaning of the Income Tax Act (Canada)), in an amount equal to the aggregate subscription price for the Flow-Through Shares, by December 31, 2014, and renounce such expenses to purchasers of Flow-Through Shares effective December 31, 2013.
All securities issued pursuant to the Private Placement will be subject to a four-month hold period from the closing date. The Private Placement is subject to approval of the TSX Venture Exchange.
The securities offered have not been, and will not be, registered under the United States Securities Act of 1933, as amended or any U.S. state securities laws and may not be offered or sold in the United States or to United States persons absent registration or any applicable exemption from the registration requirement of the U.S. Securities Act and applicable U.S. state securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there by any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.