TSX Venture Exchange Symbol: SNV
CALGARY, Oct. 15, 2013 /CNW/ - Sonoro Energy Ltd. ("Sonoro" or "the
Company") (TSX-V: SNV) is pleased to announce a proposed non-brokered
private placement (the "Private Placement") of up to 32,550,000 Post-Consolidation Shares (as defined
below) at a price of $0.08 per Post-Consolidation Share for gross
proceeds of up to Cdn $2,604,000, subject to shareholder and TSX
Venture Exchange ("TSXV") approval.
As of the date hereof, Sonoro has entered into an agreement (the
"Subscription Agreement") with Geopetrol International Holding Inc.
("Geopetrol") whereby Geopetrol has agreed to subscribe for 26,300,000
Post-Consolidation Shares under the Private Placement pursuant to the
terms and conditions of the Subscription Agreement, subject to
shareholder and TSXV approval of the Private Placement and
Consolidation (as defined below) and completion of the Consolidation.
The proposed Private Placement would (i) result in Geopetrol, an
insider currently holding approximately 17.4 % of the issued and
outstanding common shares of the Company, becoming a control person,
within the meaning of TSXV Policy 1.1; and (ii) constitutes a "related
party transaction" within the meaning of Multilateral Instrument 61-101
- Protection of Minority Security Holders in Special Transactions, and will be put before shareholders at a special meeting (the "Meeting") of
shareholders of the Company which is expected to be held in early to
mid-December, 2013.
In conjunction with the Private Placement, Sonoro proposes to
consolidate its issued and outstanding common shares on the basis of
one (1) new common share of the Company (a "Post-Consolidation Share")
for every ten (10) existing common shares (the "Consolidation"),
subject to shareholder and TSXV approval. The proposed amendment to the
articles of the Company to allow for the Consolidation will be put
before shareholders at the Meeting.
Both management and the Board of Directors believe that it is in the
best interests of Sonoro to reduce the number of outstanding common
shares by way of a consolidation. The Consolidation, if approved, will
enable Sonoro to offer securities of the Company under the Private
Placement in accordance with the minimum pricing rules of the TSXV.
Additional potential benefits of the Consolidation include a higher
post-Consolidation share price resulting in greater interest in Sonoro
and lower transaction costs.
As of October 15, 2013, there were 264,518,053 common shares of Sonoro
issued and outstanding and, if the proposed Consolidation is approved,
there will be approximately 26,451,805 Post-Consolidation Shares. The
implementation of the Consolidation would not affect the total
shareholders' equity of Sonoro or any components of shareholders'
equity as reflected on Sonoro's financial statements except: (i) to
change the number of issued and outstanding common shares; and (ii) to
change the stated capital of the common shares to reflect the
Consolidation.
The Company is continuing discussions with the appropriate government
officials, including through direct meetings and discussions, with a
view to receiving formal confirmation of its License at both the
Federal and Provincial level. The Company expects that discussions may
continue for some time before final confirmations and approvals are
received.
Mr. Richard Wadsworth, Chairman and CEO of Sonoro, commented "Geopetrol
has proven to be a strong financial and technical partner. Their
participation in this financing provides support to Sonoro's continued
efforts to obtain approvals from the necessary authorities in Iraq. "
Geopetrol commented "We are pleased to have the opportunity to further
invest in Sonoro, and we look forward to working closely with Sonoro to
realise the potential of the Asphalt License we have signed with the
Salah ad Din Province in Iraq. Geopetrol remains committed to the
current process and, ultimately, operations in Iraq."
At June 30, 2013, Sonoro had cash of $1,360,532 and positive working
capital of $1,447,747 (inclusive of cash). Since that time, the
Company has continued to incur costs related to its ongoing
operations. Accordingly, the Company believes that Private Placement
is necessary in order to provide additional cash to finance ongoing
activities related to confirming the Company's rights and then carrying
out operating activities in relation to those rights and for general working capital requirements. Full details regarding the
proposed Private Placement and Consolidation will be mailed to Sonoro's
securityholders in connection with the Meeting.
About Sonoro
Sonoro is an international bitumen exploration and development company.
Our current focus is a pure play on asphalt resource exploration and
development in Iraq. Sonoro has initiated the evaluation of resource
opportunities under its asphalt license agreement in the Salah ad Din
Province.
Forward-Looking Information
Certain statements in this news release may constitute "forward-looking
information" ("forward-looking statements") within the meaning of
applicable Canadian securities laws. Forward-looking statements are
often, but not always, identified by the use of words such as
"anticipate", "plan", "intend", "estimate", "potential", "could",
"ongoing", "prospective", "expected" and similar words suggesting
future outcomes. By their nature, forward-looking statements are based
on current expectations regarding future events that involve a number
of assumptions, known and unknown risks, and uncertainties and other
factors that may cause the actual results, performance or achievements
of Sonoro, or the industry, to differ materially from the anticipated
results, performance or achievements expressed or implied by such
forward-looking statements. Such factors include, but are not limited
to, expectations and assumptions concerning the timing and anticipated
receipt of required regulatory and shareholder approvals for the
Consolidation and Private Placement; the ability of Sonoro and
Geopetrol to satisfy the other conditions of the Subscription Agreement
and to complete the Private Placement; and the estimated timing of the
completion of the Consolidation and the closing of the Private
Placement.
Given these uncertainties, you should not rely on forward-looking
statements. These forward-looking statements also represent our
estimates and assumptions only as of the date that they initially were
made. We expressly disclaim a duty to provide updates to any
forward-looking statements, and the estimates and assumptions
associated with them, to reflect events or circumstances or changes in
expectations or the occurrence of anticipated events after the date
they initially were made, except and to the extend required by
applicable law.
Neither the TSXV nor its Regulation Service Provider (as that term is
defined in the policies of the TSXV) accepts responsibility for the
adequacy or accuracy of this release.
SOURCE Sonoro Energy Ltd.
