Sonoro Announces Proposed $2.6 Million Private Placement, Proposed Share Consolidation and Special Meeting

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.

For further information:

Chairman and CEO

Profil de l'entreprise

Sonoro Energy Ltd.

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