Prairie Provident Resources Inc. ("Prairie Provident" or the "Company") (TSX:PPR) is pleased to announce the closing of its previously announced bought deal equity financing through a syndicate of underwriters (the "Underwriters") led by Mackie Research Capital Corporation ("MRCC") raising total gross proceeds of approximately $8.0 million (the "Offering").
The Company issued 5,971,000 subscription receipts ("Subscription Receipts") at a price of $0.67 per Subscription Receipt and 5,195,000 common shares issued on a "flow-through" basis pursuant to the Income Tax Act (Canada) ("Flow Through Shares") at a price of $0.77 per Flow-Through Share. The Underwriters have an over-allotment option exercisable in whole or in part at any time prior to April 15, 2017 to purchase up to an additional 15% of the number of Subscription Receipts and Flow-Through Shares sold today at the Offering prices, for total additional gross proceeds of up to approximately $1,200,000.
Purchases under the Offering included director and officer participation together with outside investors. Tim Granger, CEO of Prairie Provident, personally purchased 373,000 Subscription Receipts.
The gross proceeds from the sale of Subscription Receipts will be held in escrow pending closing of the Company's previously announced $41 million acquisition of strategic assets in the Greater Red Earth area of northern Alberta (the "Acquisition"). Upon closing of the Acquisition, expected to occur on or about March 22, 2017, the net proceeds from the sale of Subscription Receipts will be released from escrow to the Company, and the purchasers of the Subscription Receipts will automatically receive, for no additional consideration and without any action on their part, for every Subscription Receipt held, one unit of Prairie Provident comprised of one common share (a "Common Share") and one-half of one common share purchase warrant (each whole warrant, a "Warrant"). Each Warrant will entitle the holder to acquire one common share (a "Warrant Share") at an exercise price of $0.87 per share until March 16, 2019. If the Acquisition is not completed at or before 5:00 p.m. (Calgary time) on March 31, 2017 (or such later date as the Company and MRCC, on behalf of the Underwriters, may agree), then the purchase price for the Subscription Receipts will be returned pro rata to purchasers, together with a pro rata portion of interest earned on the escrowed funds.
For each Flow-Through Share, the Company has covenanted to incur or be deemed to incur on or before December 31, 2018, and to renounce to the purchaser, effective on or before December 31, 2017, qualifying "Canadian exploration expenses" within the meaning of the Income Tax Act (Canada) in an amount equal to the purchase price of the Flow-Through Share.
The Toronto Stock Exchange ("TSX") has conditionally approved the listing of the Flow-Through Shares, the Common Shares and Warrants issuable pursuant to the Subscription Receipts, and the Warrant Shares issuable upon exercise of the Warrants, subject to the Company fulfilling all of the requirements of TSX on or before May 22, 2017.
Prairie Provident is a Calgary-based public company engaged in the exploration and development of oil and natural gas with conventional operations primarily focused in the Western Canadian Sedimentary Basin in Alberta.
SOURCE: Prairie Provident Resources Inc.
The Toronto Stock Exchange has neither approved nor disapproved the information contained herein.