Martin Endjala
Reconnaissance Energy Africa Ltd (ReconAfrica) has announced its previously announced overnight marketed Offering units of the Company for gross proceeds of $7.5 million (Approximately N$133 950 000) including the full exercise of the over-allotment option for $975 000(Approximately N$17 413 500) on the Toronto Stock Exchange Venture (TSXV) share listing.
The company’s Chief Executive Officer, Scot Evans made the announcement and said 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 outside of Canada on a private placement basis.
He said that pursuant to the offering, a total of 6 795 454 Units were sold at $1.10(approximately N$19.65) per Unit.
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 Warrant entitles the holder to acquire one Common Share at $1.35 (approximately N$24.11) until 18 July 2025.
“The offering was made through Canaccord Genuity Corp and Haywood Securities Inc. (the “Underwriters”),” he said.
Evans stated that the Underwriters received a cash commission equal to six percent of the gross proceeds of the Offering other than from the sale of Units to purchasers on the president’s list, for which a three percent cash commission was paid.
In addition, the Underwriters were issued an aggregate of 295 227 compensation options, equal to six percent of the number of Units sold under the offering other than concerning those sold to purchasers on the president’s list, for which no Compensation Options were issued.
Each Compensation Option entitles the holder to acquire one Unit at $1.10 (approximately N$19.65) until 18 July 2025.
As additional compensation, the Underwriters received cash equal to one percent of the gross proceeds of the offering other than from the sale of Units to purchasers on the president’s list, for which 0.5 percent cash was paid as a corporate finance fee.
The net proceeds from the offering will be used for site preparation of a future drilling location, well site and rig maintenance, in addition to other geologic and subsurface projects, geophysical processing and working capital as outlined in the Company’s final short form prospectus dated 12 July 2023.
Meanwhile, Directors and officers of the Company participated in the offering and were issued an aggregate of 220 000 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.
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 exceeds 25 percent of the Company’s market capitalization.
“The Company did not file a material change report 21 days before the 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 was necessary to permit the Company to close the Offering in a timeframe consistent with usual market practice for transactions of this nature,” he explained.
