CPS Canadian Premium Sands Inc

Canadian Premium Sand Inc. (“CPS” or the “Company”) (TSXV: CPS) is pleased to announce that it intends to conduct a non-brokered private placement (the "Offering") of secured convertible debentures (the "Convertible Debentures") for total gross proceeds of up to $10 million at a price of $1,000 and integral multiples thereof per Convertible Debenture.

The net proceeds of the Offering will be used for the continued development of the Company's Wanipigow Sand Resource, which includes the completion of the ongoing capital optimization review and securing conditional offtake agreements with end-users in Western Canada, supplied from Wisconsin in 2020 and Wanipigow post-2020 and for general working capital purposes.

The Offering of the Convertible Debentures is anticipated to close in one or more tranches with the first tranche closing expected to occur in mid-late December, 2019.

The Convertible Debentures will bear interest at 12% per annum, compounded quarterly from their date of issuance and payable in arrears on maturity. No interest payments will be made until such date.  The Debentures will mature on the date that is four (4) years from the date of issuance (the "Maturity Date").

The Convertible Debentures and accrued Interest thereon are convertible into common shares ("Common Shares"), at the holder's option, at a price of $1.25 per Common Share (the "Conversion Price"), subject to adjustment in certain events, at any time prior to the Maturity Date.

On or after the date that is 24 months from the Closing Date if the daily volume weighted average trading price of the Common Shares is $2.00 per Common Share or more for each trading day over a 30 consecutive trading day period, the Company may, at any time and from time to time thereafter (the "Redemption Date"), at its option, redeem all, or any portion of the Convertible Debentures for either: (i) a cash payment that is equal to all outstanding principal and accrued interest under each Convertible Debenture up to the Redemption Date; or (ii) by issuing and delivering Common Shares to the holders of Convertible Debentures at a deemed price of $1.25 per Common Share that is equal to all outstanding principal and accrued interest under each Convertible Debenture up to the Redemption Date, or any combination of (i) or (ii), upon not less than 30 days and not more than 60 days prior written notice to the holder of Convertible Debentures.

The Convertible Debentures will be a secured obligation of the Company which will rank senior to all present and future indebtedness that is not senior indebtedness which will involve the grant by the Company of a fixed and floating charge over all of its present and after acquired property.

If a change of control of the Company occurs prior to the Maturity Date, unless the holder elects in writing to convert the Convertible Debentures into Common Shares, the Company will repay in cash upon the closing of such change of control all outstanding principal and accrued interest under each Convertible Debenture plus a change of control premium equal to an additional 3% of the outstanding principal sum under such Convertible Debenture. 

Certain insiders of the Company including the Company's two significant shareholders will subscribe for up to $2 million aggregate principal amount of Convertible Debentures on a combined basis, thereby making the Offering a "related party transaction" as defined under Multilateral Instrument 61-101 ("MI 61-101"). The Offering is exempt from the need to obtain minority shareholder and a formal valuation as required by MI 61-101 as the Company is listed on the TSX Venture Exchange and the fair market value of the Debentures to insiders or the consideration paid by insiders of the Company does not exceed 25% of the Company's market capitalization. No new insiders are anticipated to be created, nor will there be any change of control as a result of the Offering.

Closing of the Offering remains subject to the acceptance of the TSX Venture Exchange. The Company may pay finder’s fees in connection with the issuance of the Debentures under the Offering. The Debentures and the Common Shares issuable upon conversion of the Debentures will be subject to a statutory hold period expiring on the date that is four months and one day after closing.

The Offering will be conducted by the Company utilizing the "accredited investor" exemption of National Instrument 45-106 – Prospectus and Registration Exemptions and also other applicable exemptions available to the Company.

The securities of the Company have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act") or any U.S. state securities laws and may not be offered or sold in the United States absent registration or an available exemption from the registration requirement of the U.S. Securities Act and applicable U.S. state securities laws. 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 these securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful.

About Canadian Premium Sand Inc.

The Company is an exploration stage company which is developing its Wanipigow Sand Resource in Manitoba, and a reporting issuer in Ontario, Alberta and British Columbia. Its shares trade on the TSX Venture Exchange under the symbol "CPS".

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 release.

Forward Looking Information

Certain statements contained in this press release constitute forward-looking statements relating to, without limitation, expectations, intentions, plans and beliefs, including information as to the future events, results of operations and the Company’s future performance (both operational and financial) and business prospects. In certain cases, forward-looking statements can be identified by the use of words such as “expects”, “estimates”, “forecasts”, “intends”, “anticipates”, “believes”, “plans”, “seeks”, “projects” or variations of such words and phrases, or state that certain actions, events or results “may” or “will” be taken, occur or be achieved. Such forward-looking statements reflect the Company's beliefs, estimates and opinions regarding its future growth, results  of operations, future performance (both operational and financial), and business prospects and opportunities at the time such statements are made, and the Company undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or circumstances should change. Forward-looking statements are necessarily based upon a number of estimates and assumptions made by the Company that are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Forward-looking statements are not guarantees of future performance. In particular, this press release contains forward-looking statements pertaining, but not limited, to: the timing, completion, size and use of proceeds of the Offering; the expected approval of the Offering by the TSX Venture Exchange; the participation of certain insiders in the Offering; and future development plans; industry activity levels; industry conditions pertaining to the silica sand industry; the ability of and manner by which the Company expects to meet its capital needs; and the Company's objectives, strategies and competitive strengths.

By their nature, forward-looking statements involve numerous current assumptions, known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to differ materially from those anticipated by the Company and described in the forward-looking statements.

With respect to the forward-looking statements contained in this press release, assumptions have been made regarding, among other things: the ability to obtain the necessary regulatory approval of the Offering; the ability to complete the Offering; stakeholder, regulatory and environmental approval to advance the development of the Wanipigow Sand Project; the ability to continue to consult with, and address feedback received from interested stake holders including the Hollow Water First Nation and surrounding communities; environmental risks and regulations; future global economic and financial conditions; future commodity prices; operating, capital and sustaining costs; that the regulatory environment in which the Company operates will be maintained in the manner currently anticipated by the Company; future exchange and interest rates; geological and engineering estimates in respect of the Company's silica sand quantities; the recoverability of the Company’s silica sand and its quality; the accuracy and veracity of information and projections sourced from third parties respecting, among other things, future industry conditions and product demand; demand for horizontal drilling and hydraulic fracturing and the maintenance of current techniques and procedures, particularly with respect to the use of silica sand; the Company's ability to obtain qualified staff and equipment in a timely and cost-efficient manner; the regulatory framework governing royalties, taxes and environmental matters in the jurisdictions in which the Company conducts its business and any other jurisdictions in which the Company may conduct its business in the future; future capital expenditures to be made by the Company; future sources of funding for the Company's capital program; the Company's future debt levels; the impact of competition on the Company; and the Company's ability to obtain financing on acceptable terms.

A number of factors, risks and uncertainties could cause results to differ materially from those anticipated and described herein including, among others: the effects of competition and pricing pressures; effects of fluctuations in the price of proppants; risks related to indebtedness and liquidity, including the Company's capital requirements; risks related to interest rate fluctuations and foreign exchange rate fluctuations; changes in general economic, financial, market and business conditions in the markets in which the Company operates; changes in the technologies used to drill for and produce oil and natural gas; the Company's ability to obtain, maintain and renew required permits, licenses and approvals from regulatory authorities; the stringent requirements of and potential changes to applicable legislation, regulations and standards; the ability of the Company to comply with unexpected costs of government regulations; liabilities resulting from the Company's operations; the results of litigation or regulatory proceedings that may be brought against the Company; uninsured and underinsured losses; risks related to the transportation of the Company's products, including potential rail line interruptions or a reduction in rail car availability; the geographic and customer concentration of the Company; the ability of the Company to retain and attract qualified management and staff in the markets in which the Company operates; labour disputes and work stoppages and risks related to employee health and safety; general risks associated with the oil and natural gas industry, loss of markets, consumer and business spending and borrowing trends; limited, unfavourable, or a lack of access to capital markets; uncertainties inherent in estimating quantities of mineral resources; sand processing problems; and the use and suitability of the Company's accounting estimates and judgments.

Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in its forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will materialize or prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement. Readers should not place undue reliance on forward-looking statements. These statements speak only as of the date of this press release. Except as may be required by law, the Company expressly disclaims any intention or obligation to revise or update any forward-looking statements or information whether as a result of new information, future events or otherwise.

Any financial outlook and future-oriented financial information contained in this press release regarding prospective financial performance, financial position or cash flows is based on assumptions about future events, including economic conditions and proposed courses of action based on management’s assessment of the relevant information that is currently available. Projected operational information contains forward-looking information and is based on a number of material assumptions and factors, as are set out above. These projections may also be considered to contain future oriented financial information or a financial outlook. The actual results of the Company's operations for any period will likely vary from the amounts set forth in these projections and such variations may be material. Actual results will vary from projected results. Readers are cautioned that any such financial outlook and future-oriented financial information contained herein should not be used for purposes other than those for which it is disclosed herein.

The forward-looking information and statements contained in this document speak only as of the date hereof and the Company does not assume any obligation to publicly update or revise them to reflect new events or circumstances, except as may be required pursuant to applicable laws.

CONTACT INFORMATION:       

Canadian Premium Sand Inc. Glenn Leroux President and Chief Executive Officer 587.350.5772glenn.leroux@cpsmail.com

Investor RelationsIR@cpsmail.com

www.canadianpremiumsand.com