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Petro-Reef Resources Ltd. ("Petro-Reef" or the
"Company") (TSX VENTURE:PER - News) is pleased to announce
that it has entered into a private placement financing agreement with
Emerging Equities Inc. (the "Underwriter") to sell up to $4.0
million in securities, of which $1.5 million will be on a bought-deal basis,
and the remainder under a commercially reasonable best efforts basis.
Under the terms of the agreement, Petro-Reef will issue by way of a
private placement an aggregate of $4.0 million through the issue of common
share units (the "Units"), and a separate issue of flow-through common
share units (the "FT Units"). Petro-Reef has granted the
Underwriter an over-allotment option (the "Over-Allotment Option")
to purchase up to an additional $2.0 million through the issue of Units and
FT Units. This Over-Allotment Option will be exercisable in whole or in part
up to 30 days (up to December 31, 2010 for FT Units) following the closing of
the Offering, for aggregate proceeds of approximately $6.0 million. The
Offering is scheduled to close on or about December 15, 2010 (the "Closing")
and is subject to certain conditions including, but not limited to, the
receipt of all necessary approvals, including the approval of the TSX Venture
Exchange.
Each Unit consists of one common share (the "Shares") of the
Company and one common share purchase warrant (the "Warrant), and each
FT Unit consisting of one flow-through common share and 1/2 common share
purchase warrant, with each whole Warrant entitling the holder thereof to
acquire one share of the Company at a price of $0.50 per Share until September
30, 2011.
Proceeds of the Offering will be used to fund Petro-Reef's exploration
and development program, potential land acquisitions, and for general
corporate purposes, with the gross proceeds from the sale of the FT Units
used to fund ongoing exploration activities eligible for Canadian exploration
expenses which will be renounced in favour of the
subscribers of the FT Units effective on or before December 31, 2010.
The offering will be on a private placement basis to accredited
investors and other eligible purchasers in Alberta, British Columbia and
Ontario and the securities issued will be subject to resale restrictions for
four months after the Closing.
The Agent will receive a cash commission equal to 7.0% of the gross
proceeds of the Offering, and options to acquire that number of Shares equal
to 7.0% of the number of Units and FT Units issued. Each option will be
exercisable to acquire one Share at a price of $0.35 until twelve months
after Closing.
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
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