Canadian Phoenix Resources Corp.

Canadian Phoenix Resources Corp.

December 17, 2009 16:03 ET

New Credit Facilities for Canadian Phoenix and Serrano

CALGARY, ALBERTA--(Marketwire - Dec. 17, 2009) - CANADIAN PHOENIX RESOURCES CORP. (TSX VENTURE:CXP) ("Canadian Phoenix" or the "Corporation") announces that it has obtained a $2.1 million secured credit facility from an arm's length mezzanine lender.

The Corporation used $1.4 million of the facility to satisfy the amounts owed by it under the promissory note issued from its controlled subsidiary Serrano Energy Ltd. ("Serrano"). The remaining balance will be utilized by Canadian Phoenix to fund ongoing operations.

The facility bears interest at 15% per annum and is secured by a first-place charge over all of the assets of the Corporation. The facility is due on June 30, 2010 and may be repaid prior to the maturity date without penalty. A fee of $20,000 has been paid in cash and a bonus of $420,000, representing 20% of the principal of the facility, has been paid through the issuance of 976,744 common shares of the Corporation at a price of $0.43 per share (equal to the 10 day average closing price of the common shares for the period ending on December 9, 2009 of $0.538 per share less the maximum allowable discount under the rules of the TSX Venture Exchange of 20%). The common shares are subject to a four month hold period.

Mr. Michael Atkinson, a director of Canadian Phoenix, acts as a consultant to the mezzanine lender and provided strategic advice for this transaction. Mr. Atkinson also provides strategic advice to other various companies in his role with the lender. Mr. Atkinson will receive a fee of $10,000 from the lender for structuring and performing due diligence on the credit facility. Mr. Atkinson also participated in funding (as to $95,000) the facility provided by the lender.

Conditional acceptance from the TSX Venture Exchange has been obtained with final acceptance pending the submission of certain documents.


Serrano's lending institution increased its demand operating credit facility to $12.0 million from $7.5 million, under which Serrano will have access to the entire facility. This demand operating credit facility bears interest at the lender's prime rate plus 1.5%, with a current effective rate of 3.75%. The demand operating credit facility was utilized to repay and cancel the $8.1 million mezzanine credit facility that bore interest at 15%. The next annual review date of the facility is scheduled for April 30, 2010. 

Canadian Phoenix Resources Corp. is a publicly-traded junior oil and gas exploration, development and production company with operations in Western Canada. Canadian Phoenix's shares trade on the TSX Venture Exchange under the symbol "CXP".

FORWARD-LOOKING STATEMENTS: This news release contains forward-looking information, including but not limited to the Corporation's ability to repay the secured debt and Serrano's ability to repay its credit facility. All statements and information other than statements of historical fact are forward-looking information. In some cases, forward-looking information can be identified by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue", or the negative of these terms or other comparable terminology. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond the control of Canadian Phoenix, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources. Readers are cautioned that actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits Canadian Phoenix will derive therefrom. The forward-looking statements and information contained in this news release are made as of the date hereof and Canadian Phoenix undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

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.

Contact Information

  • Canadian Phoenix Resources Corp.
    Robert Chenery
    Interim Chief Executive Officer
    (403) 920-0040
    Canadian Phoenix Resources Corp.
    Adeline Martin
    Interim Chief Financial Officer
    (403) 705-1192