Sunshine Oilsands Ltd. Announces Launch of US $325 Million Offering of Senior Secured Notes

CALGARY, Alberta and HONG KONG, May 22, 2014 /CNW/ - Reference is made to the announcement of Sunshine Oilsands Ltd. ("Sunshine" or the "Corporation"; HKEX: 2012; TSX: SUO) dated May 19, 2014 (the "Announcement"). Sunshine is pleased to announces that on May 22, 2014 in Hong Kong (May 22, 2014 in Calgary) it intends to offer (the "Offering") US $325,000,000 aggregate principal amount of senior secured notes of the Corporation maturing in 2019 (the "Notes"). The terms and conditions of the Offering, including the interest rate of the Notes, will be determined after taking into account market conditions and all other relevant factors.

The Corporation intends to use the proceeds from the Offering to: (i) fund expenditures associated with the anticipated final construction and development necessary to complete phases one and two at the Corporation's West Ells steam assisted gravity drainage ("SAGD") project and general corporate purposes, (ii) prefund 18 months of cash interest in an escrow account and (iii) pay fees and expenses associated with the Offering.

Please refer to the section headed "About Sunshine Oilsands Ltd." below and the Corporation's 2013 Annual Report released on April 28, 2014 for further details about the West Ells SAGD project.

The Notes will not be listed for trading on any stock exchange. Further announcement(s) in respect of the Offering will be made by the Corporation as and when appropriate.

The closing of the Offering will be conditional on the closing of the previously-announced private placement of HK$544 million of Class "A" Common Voting Shares (the "Private Placement"). For further details on the Private Placement, please refer to the Announcement.

No binding agreement in relation to the Offering has been entered into as at the date of this announcement. The Offering may nor may not materialise subject to, among other things, market conditions and investors' interest. Investors and shareholders of the Corporation are reminded to exercise caution when dealing in the securities of the Corporation.


As referenced above, if the Corporation is able to complete the Offering and the Private Placement, it intends to fund expenditures associated with the anticipated final construction and development necessary to complete phases one and two at the Corporation's West Ells 10,000 bbls/day commercial SAGD facility.

Provided the Corporation does not experience any significant cost overruns or delays in construction, the Corporation anticipates that the total amount remaining to complete phases one and two of West Ells SAGD project is approximately CDN $236 million. This amount is comprised of approximately CDN $25 million in commissioning, start up and road maintenance costs, approximately CDN $61 million in commencement costs and approximately CDN $150 million of construction costs. The Corporation is targeting first steam for phase one by the end of 2014 and first oil for phase one by the second quarter of 2015, assuming there are no significant delays in the Corporation's construction schedule or cost overruns.


This announcement contains forward-looking information relating to, among other things: (a) the future financial performance and objectives of Sunshine; (b) the plans and expectations of the Corporation; (c) the ability of the Corporation to complete the Offering and Private Placement; and (d) the use of any proceeds raised from the Offering and Private Placement. Such forward-looking information 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 words such as "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 announcement 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 the Corporation's annual information form for the year ended December 31, 2013 (the "AIF"), "Risk Management" in our current MD&A for the year ended December 31, 2013 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, on the SEDAR website at or our website at

In addition, information and statements in this announcement relating to "reserves" and "resources" are deemed to be forward-looking information, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves and resources described exist in the quantities predicted or estimated, and that the reserves and resources described can be profitably produced in the future. The assumptions relating to Sunshine's reserves and resources are contained in the reports of GLJ Petroleum Consultants Ltd. and DeGolyer and MacNaughton Canada Limited, each effective as of December 31, 2013. For additional information regarding the specific contingencies which prevent the classification of Sunshine's contingent resources as reserves see "Statement of Reserves Data and Other Oil and Gas information" in our most recent AIF. The estimates of reserves and future net revenue for individual properties in this announcement may not reflect the same confidence level as estimates of reserves and future net revenue for all properties, due to the effects of aggregation. "Contingent Resources" has the meaning given to that term in the AIF.

About Sunshine Oilsands Ltd.

The Corporation is a Calgary based public corporation, listed on the Hong Kong Stock Exchange since March 1, 2012 and the Toronto Stock Exchange since November 16, 2012. The Corporation is focused on the development of its significant holdings of oil sands leases in the Athabasca oil sands region. The Corporation owns interests in approximately one million acres of oil sands and P&NG leases in the Athabasca region. The Corporation is currently focused on executing milestone undertakings in the West Ells project area. West Ells has an initial production target rate of 5,000 barrels per day, which will be followed immediately by an approved expansion to a planned production capacity of 10,000 barrels per day. In addition to West Ells activities, the Corporation has received regulatory approval for the Thickwood 10,000 barrels per day SAGD project and has an additional 10,000 barrels per day application in regulatory review for Legend.



SOURCE: Sunshine Oilsands Ltd.

For further information:

Mr. David Sealock, Interim President & CEO, Tel: (1) 403 984 1446

Profil de l'entreprise

Sunshine Oilsands Ltd.

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