Sunshine Oilsands Ltd. Announces Private Placement Financing of HK$76.5 Million of Common Shares and Warrants Under the General Mandate

CALGARY, Alberta, Jan. 15, 2014 /CNW/ - Sunshine Oilsands Ltd. (the "Corporation") (HKEX: 2012, TSX: SUO) is pleased to announce that it has received funds for and accepted an additional irrevocable subscription agreement (the "New Subscription Agreement") for 45,000,000 units of the Corporation ("Units") at a price of HK$1.70 per Unit (the "Subscription Price") (approximately CDN$0.24 per Unit at current exchange rates) for total gross proceeds of HK$76,500,000 (approximately CDN$10.8 million) (the "Second Placing"). Closing of this subscription is subject to receipt of listing approval from the Hong Kong Stock Exchange ("HKEX") and the Toronto Stock Exchange ("TSX").

The Corporation's Interim President & CEO, Mr. David Sealock commented that "This additional equity funding confirms that there is deep rooted interest in supporting Sunshine's activities."

In relation to the initial placing that was first announced by the Corporation on December 3, 2013 (not taking into account of the Second Placing), the Corporation has received irrevocable subscriptions from five investors for an aggregate of 197,976,471 Units priced at HK$1.70 per Unit for aggregate net proceeds of HK$326,463,200. So far, the Corporation has received HK$251,288,200 in funds relating to the issuance of 152,388,235 Units to four different investors.

Each Unit is comprised of one Class "A" Common Voting Share of the Corporation ("Common Share") and one-third of one purchase warrant of the Corporation ("Warrant"). Each whole Warrant entitles the holder to acquire one Common Share at an exercise price of HK$1.88 per Common Share (the "Warrant Exercise Price") (approximately CDN$0.26 per Common Share) for a period of 24 months following the closing date of the Second Placing. The Warrant Exercise Price will be subject to normal adjustment provisions in the case of share capital or corporate reorganizations.

The new subscriber (the "Subscriber") is Immediate Focus International Limited ("Immediate Focus") who will subscribe for 45,000,000 Units pursuant to the New Subscription Agreement. Immediate Focus is an independent, third party investment company based in Hong Kong.

In connection with the Second Placing, the Corporation has agreed to pay a finder's fee equal to 3% of the gross proceeds of the Second Placing to a finder, which finder's fee may, at the sole election of the Corporation, be paid through the issuance of Units to the finders (the "First Finder") at a deemed price of HK$1.70 per Unit (the "Finder Price") (approximately CDN$0.24 per Unit). Additionally, the Corporation has agreed to pay a second finder (the "Second Finder") a finders' fee of two-fifths of a Warrant for each Unit issued under the Second Placing.

With respect to the subscription for Immediate Focus, the First Finder is Sunny Stone Limited, an independent, third party investment company based in Hong Kong, which will receive a 3% cash fee equal to HK$2,295,000. The First Finder is not a connected person to the Corporation.

With respect to the subscription for Immediate Focus, the Second Finder is Million View Limited, an independent, third party investment company based in Hong Kong, which will receive 18,000,000 Warrants. The Second Finder is not a connected person to the Corporation.

The Subscription Price, the Warrant Exercise Price, the Finder Price and the cash finder's fee were determined by negotiation between the Corporation, the Subscriber, the First Finder and the Second Finder.

An application will be made by the Corporation to the Hong Kong Stock Exchange for the listing of, and permission to deal in, the Common Shares to be issued pursuant to the Units issued to the Subscriber, the First Finder and the Second Finder.

Each of the Subscription Price and the Finder Price represents:

(i) a premium of approximately 5.33% to the average closing price per Common Share of approximately HK$1.614 as quoted on the Hong Kong Stock Exchange for the last thirty (30) trading days up to and including January 15, 2013 (being the trading day immediately preceding the signing of the New Subscription Agreement);

(ii) a premium of approximately 7.73% to the average closing price per Common Share of HK$1.578 as quoted on the Hong Kong Stock Exchange for the last five (5) trading days up to and including January 15, 2013 (being the trading day immediately preceding the signing of the New Subscription Agreement);

(iii) a premium of approximately 10.39% to the closing price per Common Share of HK$1.54 as quoted on the Hong Kong Stock Exchange on January 15, 2013 (being the trading day immediately preceding the signing of the New Subscription Agreement).

The Warrant Exercise Price represents:

(i) a premium of approximately 16.48% to the average closing price per Common Share of approximately HK$1.614 as quoted on the Hong Kong Stock Exchange for the last thirty trading days up to and including January 15, 2013 (being the trading day immediately preceding the signing of the New Subscription Agreement);

(ii) a premium of approximately 19.14% to the average closing price per Common Share of HK$1.578 as quoted on the Hong Kong Stock Exchange for the last five trading days up to and including January 15, 2013 (being the trading day immediately preceding the signing of the New Subscription Agreement); and

(iii) a premium of approximately 22.08% to the closing price per Common Share of HK$1.54 as quoted on the Hong Kong Stock Exchange on January 15, 2013 (being the trading day immediately preceding the signing of the New Subscription Agreement).

To the best of the Directors' knowledge, information and belief after having made all reasonable enquiries, the Subscriber, the First Finder and the Second Finder and, if applicable, their ultimate beneficial owner is/are third parties independent of and not connected with the Corporation and the connected persons of the Corporation.

The Common Shares to be issued pursuant to the Units issued to the Subscriber represent

approximately 1.47% of the existing issued Common Shares and, immediately following the

completion of the Second Placing, approximately 1.45% of the then enlarged total issued Common Shares of the Company.

Assuming the cash finder's fee is paid in Units, and assuming the exercise of all Warrants issued to the Subscriber, the First Finder and the Second Finder, the Common Shares to be issued pursuant to the Units issued to the Subscriber, the First Finder and the Second Finder and upon the exercise of all Warrants will total 79,800,000 Common Shares and will represent approximately 2.60% of the existing issued Common Shares and, immediately following the completion of the Second Placing, approximately 2.56% of the then enlarged total issued Common Shares of the Company

Closing of the Offering is conditional upon: (i) the HKEX and the TSX approving the listing of the Common Shares comprising the Units, the Common Shares issuable upon exercise of the Warrants and the Common Shares issuable in connection with the payment of the finder's fees; (ii) compliance of the Second Placing with other requirements under the HKEX Listing Rules and the Hong Kong Code on Takeovers and Mergers or otherwise of the HKEX and the Securities and Futures Commission of Hong Kong; and (iii) the receipt of all other required regulatory approvals. Closing is expected to occur on January 20, 2014.

REASONS FOR THE SECOND PLACING AND USE OF PROCEEDS FROM THE SECOND PLACING

The Directors consider that the Second Placing represents an opportunity to raise capital for the Corporation at an important time for the Corporation. The net proceeds of the Second Placing, after payment of the cash finder's fee will be HK $74,205,000 (approximately CDN$10.4 million) which will be used by the Corporation to address its short term capital requirements, corporate objectives and for general corporate purposes.

FUND RAISING ACTIVITIES IN THE PAST TWELVE MONTHS

Date of announcement

Event

Estimated net proceeds

Intended use of proceeds

Actual use of proceeds as at the date of this announcement

December 3, 2013, December 10, 2013 and January 10, 2014

Placing of 152,388,235 Common Shares and 50,796,078 Warrants

HK$251,288,200

To address its short term capital requirements, corporate objectives and for general corporate purposes

Approximately HK$71,000,000 used as intended

EFFECTS ON SHAREHOLDING STRUCTURE

The existing shareholding structure of the Corporation and the effect of the Second Placing on the shareholding structure of the Corporation immediately following the completion of the Second Placing is set out below.


Name of Shareholder

At the date of this Announcement

Immediately after the completion

of the Second Placing and

assuming no Warrant is exercised


Number of Common

Shares

Percentage (%)

Number of Common

Shares

Percentage (%)

Mr. Hok Ming Tseung

266,666,640

8.69

266,666,640

8.57

Premium Investment Corporation

239,197,500

7.80

239,197,500

7.68

Sinopec Century Bright Capital Investment Limited

239,197,500

7.80

239,197,500

7.68

China Life Insurance

231,411,600

7.54

231,411,600

7.43

Charter Globe Limited

206,611,560

6.74

206,611,560

6.64

Immediate Focus

45,000,000

1.47

90,000,000

2.89

Strong Petrochemical Holdings Limited

-

-

45,588,235*

1.46

Other Shareholders

1,839,082,991

59.96

1,794,082,991

57.64

Total

3,067,167,791

100.00

3,112,756,026

100.00


* Assuming the closing of the subscription by Strong Petrochemical Holdings Limited that was announced on January 10, 2014.

GENERAL MANDATE TO ISSUE THE NEW COMMON SHARES

The Common Shares pursuant to the Units will be allotted and issued under the General Mandate granted to the Board at the annual general meeting of Sunshine held on May 7, 2013 to issue up to 20% of its aggregate issued and outstanding share capital (the "General Mandate"). The General Mandate amount is 575,161,232 Common Shares. As at the date of this announcement, the Corporation has issued 106,800,000 Common Shares under the General Mandate and may be committed to issue another 314,359,216 Common Shares under the placings arrangements announced on December 3, 2013, December 10, 2013, January 10, 2014 and this announcement. The Common Shares when issued pursuant to the Units will be credited as fully paid and rank pari passu in all respects with the other existing Common Shares.

Completion of the Second Placing is subject to the satisfaction of certain conditions. Shareholders and potential investors are advised to exercise caution when dealing in the securities of the Corporation.

ABOUT SUNSHINE OILSANDS LTD.

Sunshine Oilsands Ltd. is one of the largest holders of oil sands leases by area in the Athabasca oil sands region, which is located in the province of Alberta, Canada. Since Sunshine's incorporation on 22 February 2007, Sunshine has secured over one million acres of oil sands leases (equal to approximately 7% of all granted leases in this area).

Sunshine's principal operations are the evaluation, development and production of its diverse portfolio of oil sands leases. Its principal operating regions in the Athabasca area are at West Ells, Thickwood, Legend Lake, Harper, Muskwa, Goffer, Pelican and Portage. Sunshine's oil sands leases are grouped into three main asset categories: clastics, carbonates and conventional heavy oil.

FORWARD-LOOKING INFORMATION AND DISCLAIMER

This announcement may contain forward-looking information that is subject to various risks, uncertainties and other factors. All statements other than statements and information of historical fact are forward-looking statements. The use of any words "estimate", "forecast", "expect", "project", "plan", "target", "vision", "goal", "outlook", "may", "will", "should", "believe", "intend", "anticipate", "potential", and similar expressions are intended to identify forward-looking statements. Forward-looking statements are based on Sunshine's experience, current beliefs, assumptions, information and perception of historical trends available to Sunshine, and are subject to a variety of risks and uncertainties including, but not limited to those associated with resource definition and expected reserves and contingent and prospective resources estimates, unanticipated costs and expenses, regulatory approval, fluctuating oil and gas prices, expected future production, the ability to access sufficient capital to finance future development and credit risks, changes in Alberta's regulatory framework, including changes to regulatory approval process and land-use designations, royalty, tax, environmental, greenhouse gas, carbon and other laws or regulations and the impact thereof and the costs associated with compliance.

Although Sunshine believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned that the assumptions and factors discussed in this information release are not exhaustive and readers are not to place undue reliance on forward-looking statements as our actual results may differ materially from those expressed or implied. Sunshine disclaims any intention or obligation to update or revise any forward-looking statements as a result of new information, future events or otherwise, subsequent to the date of this announcement, except as required under applicable securities legislation. The forward-looking statements speak only as of the date of this announcement and are expressly qualified by these cautionary statements. Readers are cautioned that the foregoing lists are not exhaustive and are made as at the date hereof. For a full discussion of our material risk factors, see "Risk Factors" in our most recent Annual Information Form, "Risk Management" in our current MD&A and risk factors described in other documents we file from time to time with securities regulatory authorities, all of which are available on the Hong Kong Stock Exchange at www.hkexnews.hk, on the SEDAR website at www.sedar.com or our website at www.sunshineoilsands.com.

This document does not constitute and is not an offer to sell or a solicitation of an offer to buy common shares of Sunshine in the United States (including its territories and possessions, any State of the United States and the District of Columbia) or elsewhere.

SOURCE Sunshine Oilsands Ltd.

For further information:

Mr. Michael J. Hibberd, Co-Chairman & Director, +1-403-984-1440; Mr. Songning Shen, Co-Chairman & Director, +1-403-475-8379; Mr. David Sealock, Interim President & CEO, +1-403-984-1446; investorrelations@sunshineoilsands.com; www.sunshineoilsands.com

http://www.sedar.com

http://www.sunshineoilsands.com