Reef Resources Ltd.
TSX VENTURE : REE

Reef Resources Ltd.

August 28, 2009 20:02 ET

Reef Resources Ltd. Announces Closing of Shares for Debt Settlement, Private Placement Clarification and Pricing Change on Insider's Options

CALGARY, ALBERTA--(Marketwire - Aug. 28, 2009) -

NOT FOR DISTRIBUTION TO US NEWSWIRE SERVICES FOR DISSEMINATION IN THE UNITED STATES.

Reef Resources Ltd. ("Reef" or the "Company") (TSX VENTURE:REE) announces the following.

Closing of Shares for Debt Settlement:

Reef is pleased to announce the closing of its previously announced (July 27, 2009) settlement of shares for debt. Reef will issue a total of 5,438,758 shares to settle $359,276 of debt. Debt of $109,375 to three insiders (two officers/directors and one officer) will be settled for 2,187,500 flow-through common shares at $0.05 per share. Creditor debt will be settled as follows: two creditors of trade or professional services will receive a total of 340,000 common shares at $0.05 for the settlement of $17,000 of debt, one creditor for an unsecured loan of $10,000 will receive 125,000 common shares at $0.08 per share and twelve creditors of trade or professional services will receive a total of 2,786,258 common shares at $0.08 for the settlement of $222,901 of debt.

Private Placement Clarification:

Reef Resources Ltd. wishes to make the following announcement for regulatory clarification purposes. Reef will not be proceeding with a previously announced private placement announced on June 8, 2009 for 15,000,000 Units at $0.05 per Unit to raise up to $750,000. This private placement was expected to have closed on or about July 31, 2009.

Reef Resources Ltd. announces that it intends to complete a non-brokered private placement of up to 15,000,000 units of the Company ("Units") at an issue price of $0.05 per Unit for gross proceeds of up to $750,000 (the "Offering"). Each Unit will be comprised of 0.5 of one flow-through common share of the Company ("Flow Through Common Share") and 0.5 of one non flow through ("Common Share") plus one half share purchase warrant ("Warrant"). Each whole share purchase Warrant will entitle the holder thereof to purchase one Common Share at a price of $0.10 per share until the date that is twelve months from date of closing of the Offering. A finder's fee of cash equal to up to 10% of the gross proceeds of the Offering and a number of Warrants equal to up to 10% of the number of Units sold pursuant to the Offering may be paid to certain arm's length parties in connection with the Offering. Closing of the offering is expected to occur on or about September 30, 2009, 2009. Multiple earlier closings will be at the Company's discretion.

Proceeds of the Offering will be used to fund the stage fracture completion of the Company Ausable #2 well and purchase of certain process equipment and for general working capital purposes.

Director's, Officer's and Investor Relations Options Pricing Announcement:

Reef Resources Ltd. is changing the previously announced exercise price of options to directors, officers (announced July 8, 2009) and its investor relations firm, Couronn Capital (announced July 27, 2009). The exercise price for all options announced has changed from $0.05 per share to $0.10 per share. All other details remain the same.

Forward Looking Statements - This news release contains certain forward-looking statements, which include assumptions with respect to raising funds and future capital expenditures. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. All such forward looking statements involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company's control. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

Neither 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

  • Reef Resources Ltd.
    Arnie Hansen
    President & CEO
    (403) 251-9447 Ext 224
    (403) 251-9553 (FAX)
    or
    Reef Resources Ltd.
    Tariq S. Malik CA
    CFO
    (403) 251-9447 Ext 224
    (403) 251-9553 (FAX)