/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE
SERVICES OR DISSEMINATION IN THE UNITED
STATES/
CALGARY,
AB, July 31, 2024 /CNW/ - Reconnaissance
Energy Africa Ltd. (the "Company" or "ReconAfrica")
(TSXV: RECO) (OTCQX: RECAF) (Frankfurt: 0XD) is pleased to announce that it
has completed its previously announced C$35
million underwritten public offering (the
"Offering") of units of the Company (the
"Units") at a price of C$1.25
per Unit, and together with the partial exercise of the
over-allotment option, for aggregate gross proceeds of
approximately C$38.8 million. BW
Energy Limited ("BW Energy") (OSE: BWE) participated in the
Offering by way of a strategic equity investment in the Company for
C$22 million (approximately
US$16 million), in connection with
the strategic partnership with the Company.
The Offering was completed pursuant to an underwriting agreement
dated July 18, 2024 entered into
between the Company and a syndicate of underwriters led by Research
Capital Corporation as the lead underwriter and sole bookrunner
(the "Lead Underwriter"), on behalf of a syndicate of
underwriters, including Canaccord Genuity Corp. and Haywood
Securities Inc. (together with the Lead Underwriter, the
"Underwriters").
The Company issued an aggregate of 30,944,000 Common Shares (as
defined below) and 31,844,600 Warrants (as defined below) pursuant
to the Offering. Each Unit consists of one common share in the
capital of the Company (each, a "Common Share") and one
common share purchase warrant of the Company (each, a
"Warrant"). The Warrants will commence trading on the
TSX Venture Exchange ("TSXV") under the symbol
"RECO.WT" on or about August 6, 2024,
subject to final TSXV acceptance.
Each Warrant entitles the holder to acquire one Common Share at
a price of C$1.75 until July 31, 2026. In the event that, at any time
four months and one day after the date of issuance and prior to the
expiry date of the Warrants, the moving volume weighted average
trading price of the Common Shares on the TSXV, or other principal
exchange on which the Common Shares are listed, is equal to or
greater than C$3.70 for any 20
consecutive trading days, the Company may, within 10 business days
of the occurrence of such event, deliver a notice to the holders of
Warrants accelerating the expiry date of the Warrants to the date
that is 30 days following the date of such notice (the
"Accelerated Exercise Period"). Any unexercised Warrants
shall automatically expire at the end of the Accelerated Exercise
Period.
The net proceeds from the Offering are expected to be used for
drilling activities, mobilization/demobilization and site costs,
geology and geophysics, 3D seismic planning and acquisition, and
working capital as outlined in the Company's prospectus supplement
dated July 18, 2024.
The Offering was completed by way of a prospectus supplement to
the Company's short form base shelf prospectus dated February 29, 2024 filed in all of the provinces
and territories of Canada, and the
Units were sold outside of Canada
on a private placement basis. Copies of the prospectus supplement
and the base shelf prospectus are available under the Company's
profile on SEDAR+ at www.sedarplus.ca.
The Underwriters received a cash commission equal to 6.0% of the
gross proceeds of the Offering (other than from the sale of Units
to a strategic purchaser, BW Energy Limited, for which a 4% cash
commission was paid, and purchasers on the president's list, for
which a 3.0% cash commission was paid). In addition, the
Underwriters were issued an aggregate of 943,244 broker warrants
(the "Broker Warrants"), equal to 6.0% of the number of
Units sold under the Offering (other than with respect to those
sold to a strategic purchaser, BW Energy Limited, for which Broker
Warrants equal to 1.0% of the number of Units sold to such
purchaser were issued, and purchasers on the president's list, for
which no Broker Warrants were issued). In addition, the
Underwriters received an advisory fee of $8,835 and 6,300 advisory broker warrants on the
same terms as the Broker Warrants. Each Broker Warrant entitles the
holder to acquire one Common Share at a price of C$1.25 until July 31,
2026.
Directors of the Company participated in the Offering and were
issued an aggregate of 26,000 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 press release is not an offer to sell or the
solicitation of an offer to buy the securities in the United States or in any jurisdiction in
which such offer, solicitation or sale would be unlawful prior to
qualification or registration under the securities laws of such
jurisdiction. The securities being offered have not been, nor will
they be, registered under the United States Securities Act of 1933,
as amended, and such securities may not be offered or sold within
the United States or to, or for
the account or benefit of, U.S. persons absent registration or an
applicable exemption from U.S. registration requirements and
applicable U.S. state securities laws.
About ReconAfrica
ReconAfrica is a Canadian oil and gas company engaged in the
opening of the newly discovered deep Kavango Sedimentary Basin in
the Kalahari Desert of northeastern Namibia and northwestern Botswana, where the Company holds petroleum
licenses comprising ~8 million contiguous acres. In all aspects of
its operations ReconAfrica is committed to minimal disturbance of
habitat in line with international standards and will implement
environmental and social best practices in all of its project
areas.
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.
Cautionary Note Regarding Forward-Looking
Statements:
Certain statements contained in this press release constitute
forward-looking information under applicable Canadian, United States and other applicable securities
laws, rules and regulations, including, without limitation,
statements with respect to the expected use of proceeds from the
Offering, the timing and listing of the Warrants on the TSXV,
any potential acceleration of the expiry date of the
Warrants and the Company's commitment to minimal disturbances
in line with international best standards and its implementation of
environmental and social best practices in all of its project
areas. These statements relate to future events or future
performance. The use of any of the words "could", "intend",
"expect", "believe", "will", "projected", "potential", "estimated",
"significant" and similar expressions and statements relating to
matters that are not historical facts are intended to identify
forward-looking information and are based on ReconAfrica's current
beliefs 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 29, 2024, available under
the Company's profile on SEDAR+ at www.sedarplus.ca. 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 information. Those
assumptions and factors are based on information currently
available to ReconAfrica. The forward-looking information contained
in this release is made as of the date hereof and ReconAfrica
undertakes no obligation to update or revise any forward-looking
information, 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 information. The foregoing statements expressly
qualify any forward-looking information contained herein.
SOURCE Reconnaissance Energy Africa Ltd.
