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VANCOUVER, Oct. 16, 2017 /CNW/ - San Angelo Oil Limited ("San Angelo") (NEX: SAO.H) is pleased to announce that Cabral Gold Ltd. ("Cabral") has closed the first tranche of their private placement financing previously announced on May 11, 2017 (the "Offering"). The Offering is being conducted in connection with the business combination (the "Business Combination") between San Angelo and Cabral. San Angelo is also pleased to provide an update regarding the Business Combination.
Financing by Cabral
In the first tranche of the Offering, Cabral raised gross proceeds of approximately $1.8 million through the sale of 16,666,328 subscription receipts (the "Subscription Receipts") at a price of $0.108 per Subscription Receipt.
The funds will be held in escrow pending closing of the Business Combination. Immediately prior to the closing of the Business Combination, each Subscription Receipt will be exchanged, without additional consideration, for one unit of Cabral which will, in conjunction with the closing of the Business Combination, be exchanged for 0.18 of a unit of San Angelo (each whole such unit being referred to as a "Unit") at an effective post consolidation (1:5) issue price of $0.60. All prices and exercise prices are based on the equivalent price of post-consolidated San Angelo shares using the share exchange ratio of 0.18 of one post consolidation common share of San Angelo for each one common share of Cabral held, as per the previously announced Business Combination.
Each whole Unit will be comprised of one post-consolidation common share of San Angelo, one-half of one class A warrant and one-half of one class B warrant. Each whole class A warrant will entitle the holder to purchase one post-consolidation common shares of San Angelo at a price of $0.75 for a period of one year after the closing of the Business Combination. Each whole class B warrant will entitle the holder to purchase one post-consolidation common share of San Angelo at a price of $0.90 for a period of two years after the closing of the Business Combination.
In connection with the closing of the Non-Brokered Offering, Cabral issued a total of 988,869 special warrants to various finders. Immediately prior to closing the Business Combination each special warrant will automatically be exercised into a warrant of Cabral, which will, in conjunction with the closing of the Business Combination, be exercised into 0.18 of a compensation warrant of San Angelo (the "Compensation Warrants") without additional consideration or further action by the finder. Each Compensation Warrant will entitle the finder to acquire one Unit of San Angelo at an exercise price of $0.60 for a period of 24 months following the closing of the Business Combination. In addition, on closing of the Business Combination, Cabral will pay cash finder's fees totaling approximately $106,798 to the finders in connection with the first tranche of the Offering.
Update on Business Combination
San Angelo has now received conditional approval of the Business Combination from the TSX Venture Exchange (the "Exchange"). San Angelo and Cabral have agreed that the deadline for completion of the Business Combination, including the Offering sufficient to satisfy the conditions precedent, will be October 31, 2017.
Completion of the Business Combination is subject to a number of conditions, including but not limited to completion of the Offering sufficient to satisfy the conditions precedent, approval of the shareholders of Cabral, receipt of all required regulatory consents (including final Exchange acceptance), and satisfaction of other customary closing conditions. There can be no assurance that the Business Combination will be completed as proposed or at all.
Further details regarding the Business Combination will be set forth in a filing statement of San Angelo, a copy of which will be available at www.sedar.com. Investors are cautioned that, except as disclosed in the filing statement to be filed, any information released or received with respect to the Business Combination may not be accurate or complete and should not be relied upon. Trading in the securities of San Angelo remains halted on the Exchange and should be considered highly speculative.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as such term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release contains certain forward-looking information and forward-looking statements within the meaning of applicable securities legislation (collectively "forward-looking statements"). The use of any of the word "will", "propose" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Such forward-looking statements should not be unduly relied upon. This news release contains forward-looking statements and assumptions pertaining to the following: completion of the Business Combination and full Offering, receipt of required shareholder and regulatory approvals, and strategic plans and future operations. Actual results achieved may vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. San Angelo believes the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct.
SOURCE San Angelo Oil Limited
For further information: Eileen Au, Interim Chief Executive Officer, San Angelo Oil Limited, Tel: (778) 725-1488