STERLING RESOURCES FILES FINAL RIGHTS OFFERING PROSPECTUS
Calgary, Alberta, Canada, April 20, 2016 - Sterling Resources Ltd. (TSX-V: SLG) ('Sterling' or the 'Company') announces today that it has obtained a receipt for its final short form prospectus (the 'Prospectus') filed with the securities regulatory authorities in all of the provinces of Canada other than Quebec (the 'Qualifying Jurisdictions') in respect of its previously announced rights offering to raise gross proceeds of up to $219,845,339 million.
Each holder of record of common shares in the capital of the Corporation ('Common Shares') as of the close of business (Eastern Time) on April 27, 2016 (the 'Record Date') who is resident in a Qualifying Jurisdiction (each, a 'Qualifying Holder') will receive one right (a 'Right') for each Common Share held. Each Right will entitle the holder thereof to subscribe for 32.333333333 Common Shares at a subscription price of $0.015398 per Common Share (the 'Subscription Price') to a maximum of 14,277,525,577 Common Shares (the 'Rights Offering'). There is no minimum amount of funds that must be raised under the Rights Offering. This means that Sterling could complete the Rights Offering after raising only a small portion of the maximum possible Rights Offering proceeds.
It is a requirement under the rules of the TSX Venture Exchange (the 'TSXV') that an advance notification period of five business days must pass before the record date for the Rights Offering, which will be April 27, 2016 (the 'Record Date'). Sterling currently expects the Prospectus relating to the Rights Offering to be mailed to shareholders as of the Record Date who are resident in Qualifying Jurisdictions on April 28, 2016 and the closing of the Rights Offering to occur on or about May 27, 2016. The Rights may be exercised commencing on April 29, 2016 and will expire at 5:00 p.m. (Eastern time)(the 'Expiry Time') on May 19, 2016 (the 'Expiry Date').
To subscribe for Common Shares, a completed Rights certificate, together with payment in full of the Subscription Price for each Common Share subscribed for, must be received by Computershare Investor Services Inc. ('Computershare'), in its capacity as the subscription agent for the Rights Offering, prior to the Expiry Time on the Expiry Date. Shareholders who hold their Common Shares in a brokerage account or with a nominee should contact such broker or nominee in order to exercise their Rights. Qualifying Holders who fully exercise their Rights will be entitled to subscribe on a pro rata basis for additional Common Shares, if available, that were not subscribed for by other Qualifying Holders on or before the Expiry Date pursuant to an additional subscription privilege.
If a holder elects not to exercise the Rights issued to that holder, or elects to sell or transfer those Rights, the dilution of the holder's current percentage ownership in Sterling will be increased very significantly, including (where not all Rights issued have been exercised) by virtue of the subsequent issue by Sterling of the Exchange Shares (as defined in and qualified by the Prospectus) to the holders of Sterling Resources (UK) Ltd.'s existing senior bonds (the 'Bondholders'). It is anticipated, for instance, that if none of the Rights are exercised to acquire Common Shares pursuant to the Rights Offering, that the Bondholders would following the Recapitalization (as defined and described in the Prospectus) own 97% of the Common Shares, with shareholders who were entitled to participate in the Rights Offering owning the remaining 3% of the Common Shares in aggregate.
The Rights Offering is only being made in the Qualifying Jurisdictions to the Qualifying Holders. The Rights Offering is not an offering of Common Shares for sale in any jurisdiction outside of the Qualifying Jurisdictions (a 'Non-Qualifying Jurisdiction'), except that Sterling may elect to distribute the Rights to certain investors ('Eligible Foreign Investors') resident in certain other jurisdictions to the extent that Sterling determines it is possible to do so on an exempt basis under, or without otherwise breaching, the securities laws or any other applicable laws of that jurisdiction. Sterling may also elect to distribute the Rights to shareholders who do not reside in a Qualifying Jurisdiction ('Non-Qualifying Holders') who have demonstrated to Sterling on or before the tenth day prior to the Expiry Date that the receipt by them of the Rights and the issuance to them of the Common Shares underlying the Rights is not prohibited by any applicable securities laws or any other applicable laws of their jurisdiction and will not require Sterling to file any documents, make any application or pay any amount in their jurisdiction, unless otherwise agreed to by Sterling. The Rights of Non-Qualifying Holders who do not satisfy Sterling on or prior to 5:00 p.m. (Eastern time) on May 9, 2016, will be sold by Computershare on such date or dates and at such price or prices as Computershare shall determine in its sole discretion.
Further details concerning the Rights Offering and the procedures to be followed by holders are contained in the Prospectus available on www.sedar.com.
The TSXV has accepted the Rights Offering, has accepted the listing of the Rights and the Common Shares issuable upon exercise of the Rights and has conditionally approved the listing of the Common Shares being issued pursuant to the Bond Exchange on the TSXV. The Rights will trade under the symbol SLG.RT.
This news release does not constitute an offer to sell securities, nor is it a solicitation of an offer to buy securities, in any jurisdiction. All sales will be made through registered securities dealers in jurisdictions where the Rights Offering has been qualified for distribution. The Rights and the Exchange Shares offered are not, and will not be, registered under the securities laws of the United States of America, nor any State thereof, and may not be sold in the United States of America absent registration in the United States or the availability of an exemption from such registration.
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the accuracy of this release.