Petrosands Announces Equity Financing

/THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

TSX Venture Exchange
Trading Symbol: PCA

CALGARY, Sept. 8, 2011 /CNW/ - PetroSands Resources (Canada) Inc. ("PetroSands" or the "Company") announces that it intends to complete a private placement financing (the "Financing") of units of the Company ("Units") at a price of $0.165 per Unit for total gross proceeds of up to $2.475 million. Each Unit will consist of one (1) common share in the capital of the Company ("Common Share") and one half of one common share purchase warrant ("Warrant"). Each whole Warrant will entitle the holder thereof to purchase one (1) Common Share at an exercise price of $0.25 at any time within five (5) years from the date of issuance. If, at any time within a year of the Closing Date (as defined below) of the Financing, the Common Shares trade at a 30 day volume weighted average trading price greater than $0.60 on the TSX Venture Exchange or such other exchange as the Common Shares may then trade and the Company provides notice thereof to the holders of Units, the holders of Units will have ten (10) days of receipt of such notice to exercise their Warrants, failing which the Warrants will expire and become null and void (the "Acceleration Right").

Up to 15 million Units are expected to be issued pursuant to the Financing, resulting in the issuance of up to 15 million Common Shares and up to 7.5 million Warrants. Closing is expected to occur on or about September 15, 2011 (the "Closing Date"). The Company expects to list the Common Shares issuable pursuant to the Financing on the facilities of the TSX Venture Exchange, such listing being subject to approval of the TSX Venture Exchange. The Common Shares and Warrants will be subject to a four month statutory hold period. Closing of the Financing is subject to, amongst other things, regulatory approval. Proceeds from the Financing are intended to be used to fund the Company's ongoing development and capital programs and for general corporate purposes.

While the Financing is non-brokered, the Corporation has signed a finder's fee agreement with a brokerage firm (the "Finder") such that a cash commission in the amount of 6% of the gross proceeds raised pursuant to the Financing only from orders originating from introductions provided by the Finder will be paid together with broker warrants for 6% of the total number of securities issued pursuant to the gross proceeds from the Financing from orders only originating from introductions provided by the Finder. The broker warrants will be exercisable at a price of $0.25 for up to 18 months following the Closing Date and are also subject to the Acceleration Right. In addition, following the successful completion of the Financing, it is expected that a new director will be appointed to the Board of Directors, such nominee being a representative of one of the purchasers in the Financing.

About PetroSands Resources (Canada) Inc.

PetroSands Resources (Canada) Inc. is a dynamic new publicly traded junior oil and gas company focused on exploration and development of oil and natural gas in Alberta and Saskatchewan. The Company is focused on strategic acquisitions within its core areas that aggressively expand production, cash flow and reserves. The Company holds sizeable undeveloped lands in Alberta and Saskatchewan. The Company currently has approximately 23.2 million common shares outstanding. PetroSands' shares are listed on the TSX-V under the trading symbol "PCA".

Forward-Looking Statements and Information: The forward-looking statements contained in this document are based on certain key expectations and assumptions made by PetroSands, including: (i) with respect to the anticipated closing dates of the Financing, use of proceeds of the Financing and the listing of the Common Shares, expectations and assumptions concerning timing of receipt of required regulatory approvals and third party consents and the satisfaction of other conditions to the completion of the Financing and the listing of said securities and (ii) with respect to the anticipated exploration and development opportunities, anticipated 2011 capital expenditures, expectations and assumptions concerning the success of future exploration and development activities, the performance of existing wells, the performance of new wells and prevailing commodity prices.

Although PetroSands believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because PetroSands can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the failure to obtain necessary regulatory approvals or satisfy the conditions to closing the Financing, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures, the uncertainty of reserve estimates, the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), commodity price and exchange rate fluctuations and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Certain of these risks are set out in more detail in PetroSands' Management Discussion and Analysis which has been filed on SEDAR and can be accessed at www.sedar.com.

The forward-looking statements contained in this document are made as of the date hereof and PetroSands undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

ON BEHALF OF THE BOARD OF DIRECTORS

SOURCE PetroSands Resources (Canada) Inc.

For further information:

Greg T. Busby  
Telephone: 
Email: 
President & CEO
(403) 265-2770
gbusby@petrosandscan.com

Profil de l'entreprise

PetroSands Resources (Canada) Inc.

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