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VANCOUVER, BC, Aug. 20, 2020 /CNW/ - Reconnaissance Energy
Africa Ltd. (the "Company" or
"ReconAfrica") (TSX-V: RECO) (OTC: RECAF)
(Frankfurt: 0XD) is pleased to
announce that it has completed its previously announced public
offering (the "Offering") of units (the "Units") for
gross proceeds of approximately C$23
million, including the partial exercise of the
over-allotment option. The Offering was completed by way of a short
form prospectus filed in all of the provinces of Canada, except Québec, and the Units were sold
elsewhere outside of Canada on a
private placement basis.
Pursuant to the Offering, a total of 32,855,409 Units were sold
at a price of C$0.70 per Unit. Each
Unit consists of one common share (a "Common Share") in the
capital of the Company and one common share purchase warrant (a
"Warrant"). Each Warrant entitles the holder to acquire one
Common Share at a price of C$1.00
until August 20, 2025. The Warrants
are subject to acceleration of the expiry date to a date 30
calendar days following notice to be provided to the holders of the
Warrants by the Company in the event that the daily volume weighted
average trading price of the Common Shares on the TSX Venture
Exchange (the "Exchange") for any period of 20 consecutive
trading days equals or exceeds C$3.00.
The Offering was made through Haywood Securities Inc. (the
"Agent"). The Agent received a cash commission equal to 6.0%
of the gross proceeds of the Offering (other than from the sale of
7,125,639 Units to purchasers on the president's list for
aggregate gross proceeds of approximately C$5 million, for which a 1.5% cash commission was
paid). In addition, the Agent was issued compensation options in an
amount equal to 6.0% of the number of Units sold under the Offering
(other than with respect to those sold to purchasers on the
president's list, for which no compensation options were issued)
(the "Compensation Options"). Each Compensation Option
entitles the holder to acquire one Unit at a price of C$0.70 until August 20,
2025.
The Exchange has conditionally accepted the Warrants for
listing. It is anticipated that the Warrants will commence trading
on the Exchange under the symbol "RECO.WT" on or about August 24, 2020.
The net proceeds from the Offering will be used for the
transportation costs of shipping the Company's drilling rig from
Houston, Texas to Namibia and to complete the three-well
drilling program and acquire and process 2D seismic data in the
Kavango Basin, together with working capital.
"We are very pleased with the results of this Offering, as it
was necessary to increase the maximum size of the offering twice to
C$22 million to accommodate demand
and the Agent also partially exercised the over-allotment option,"
said Jay Park, Chief Executive
Officer of ReconAfrica. "With the funds raised from this Offering,
ReconAfrica will fully perform our three-well drilling program and
acquire and interpret 2D seismic data. Performance of these
operations will significantly exceed our work obligation during the
current phase of our exploration licence."
Certain officers of the Company have participated in the
Offering and were issued an aggregate of 957,477 Units. Such
participation in the Offering constitutes a "related party
transaction" as defined in Multilateral Instrument 61-101 –
Protection of Minority Security Holders in Special
Transactions ("61-101"). The Offering is exempt from the
formal valuation and minority shareholder approval requirements of
61-101 as neither the fair market value of the securities issued to
related parties nor the consideration for such securities exceed
25% of the Company's market capitalization. The Company did not
file a material change report 21 days prior to closing of the
Offering as the participation of insiders of the Company in the
Offering had not been confirmed at that time and the shorter time
period was necessary in order to permit the Company to close the
Offering in a timeframe consistent with usual market practice for
transactions of this nature.
This news release does not constitute an offer to sell or a
solicitation of an offer to sell any of the securities in
the United States. The securities
have not been and will not be registered under the United States
Securities Act of 1933, as amended (the "U.S. Securities Act") or
any state securities laws and may not be offered or sold within
the United States or to, or for
the account or benefit of, U.S. Persons unless registered under the
U.S. Securities Act and applicable state securities laws or an
exemption from such registration is available.
ReconAfrica is a junior oil and gas company engaged
in the opening of the newly discovered deep Kavango Sedimentary
Basin, in northeastern Namibia and
northwestern Botswana, where the
Company holds petroleum licences comprising approximately 8.75
million contiguous acres.
Cautionary Note Regarding Forward-Looking
Statements: Certain statements contained in this
news release constitute forward-looking statements under applicable
Canadian, United States and other
applicable securities laws, rules and regulations, including,
without limitation, statements with respect to any potential
acceleration of the expiry date of the Warrants, the listing of the
Warrants, the use of proceeds and the expectation that the
performance of the operations with the use of proceeds will
significantly exceed the Company's work obligation during the
current phase of its exploration licence. These
statements relate to future events or future performance. The use
of any of the words "could", "intend", "expect", "believe", "will",
"projected", "estimated" and similar expressions and statements
relating to matters that are not historical facts are intended to
identify forward-looking statements and are based on ReconAfrica's
current belief or assumptions as to the outcome and timing of such
future events. There can be no assurance that such statements will
prove to be accurate, as the Company's actual results and future
events could differ materially from those anticipated in these
forward-looking statements as a result of the factors discussed in
the "Risk Factors" section in the Company's annual
information form dated July 27, 2020
available under the Company's profile at www.sedar.com.
Actual future results may differ materially. Various assumptions or
factors are typically applied in drawing conclusions or making the
forecasts or projections set out in forward-looking statements.
Those assumptions and factors are based on information currently
available to ReconAfrica. The forward-looking statements contained
in this news release are made as of the date hereof and ReconAfrica
undertakes no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as required by applicable securities laws.
Because of the risks, uncertainties and assumptions contained
herein, investors should not place undue reliance on
forward-looking statements. The foregoing statements expressly
qualify any forward-looking statements contained herein.
Neither the TSXV nor its Regulation Services Provider (as
that term is defined in policies of the TSXV) accepts
responsibility for the adequacy or accuracy of this
release.
SOURCE Reconnaissance Energy Africa Ltd.