Americas Petrogas Inc.
TSX VENTURE : BOE

Americas Petrogas Inc.

February 28, 2011 07:53 ET

Americas Petrogas Inc. Announces $40 Million Bought Deal Financing

CALGARY, ALBERTA--(Marketwire - Feb. 28, 2011) -

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Americas Petrogas Inc. (TSX VENTURE:BOE) (the "Company") is pleased to announce that it has entered into an agreement with Mackie Research Capital Corporation ("MRCC") pursuant to which MRCC has agreed to act as lead underwriter, in a syndicate of underwriters (collectively, the "Underwriters"), whereby the Underwriters will purchase, on a bought-deal basis, 16,130,000 common shares of the Company (the "Common Shares") at a price of $2.48 per Common Share (the "Offering Price"), for gross proceeds to the Company of $40,002,400 (the "Offering"). 

The Underwriters shall also have the option (the "Underwriters' Option"), exercisable at any time prior to closing of the Offering, to purchase from the Company up to an additional $10,000,000 in Common Shares at the Offering Price.

The Offering will take place by way of a private placement to qualified investors in such provinces of Canada as the Underwriters may designate, and otherwise in those jurisdictions where the Offering can lawfully be made, including the United States and Europe under applicable private placement exemptions. 

The Offering is scheduled to close on or about the week of March 14, 2011 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the TSX Venture Exchange. The securities to be issued under the Offering will have a hold period of four months from closing.

The proceeds received by the Company from the sale of the Common Shares will be used by the Company for the ongoing exploration and development of its oil & gas properties, and by the Company's 80%-owned subsidiary, GrowMax Agri Corp., for the ongoing exploration and development of its potash property, and for general corporate purposes of the Company.

In consideration for their services, the Underwriters will receive a cash commission of 6% of the gross proceeds of the Offering and non-transferable common share purchase warrants equal to 6% of the Common Shares issued pursuant to the Offering.

The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold in the United States absent registration or an exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

About Americas Petrogas Inc.

Americas Petrogas Inc. is a Canadian company whose shares trade on the TSX Venture Exchange under the symbol "BOE". Americas Petrogas has oil and gas interests in 16 blocks involving exploration, development and production. Americas Petrogas has proven conventional oil and gas reserves, as well as evolving unconventional resource plays including shale gas, shale oil, and tight sand oil and gas in Argentina's prolific Neuquen basin. For more information about Americas Petrogas, please visit www.americaspetrogas.com

About GrowMax Agri Corp.

GrowMax Agri Corp., a subsidiary of Americas Petrogas Inc., is developing a surface potash (KCl or Muriate of Potash) brine reservoir and evaporite deposit at Bayovar in the Sechura Desert of Northwest Peru. Additional mineral potential includes phosphate, bromine and other minerals. The Bayovar area has gained recent attention through Vale SA's recent start-up of a 4 million tonne per year phosphate surface mine located just south of GrowMax's 202,000 acre concession. Management, along with its investor IFFCO, intends to build GrowMax into a potash and specialty fertilizers company. For more information about GrowMax Agri Corp., please visit www.growmaxagricorp.com

Certain statements in this Press Release constitute forward-looking statements under applicable securities legislation. Such forward-looking statements, such as the use of proceeds, the oil and gas reserves, the development of a surface potash (and other minerals) brine reservoir and evaporite deposit, drilling for phosphates and the building of a potash and specialty fertilizers company, involve risks, uncertainties and other factors which may cause the actual use of proceeds and the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. In particular, there is no assurance that the proceeds will be used as described, that new oil wells will be drilled, that a potash (and other minerals) brine reservoir and evaporite deposit will be developed, and that a potash and specialty fertilizers business will be built. This forward-looking information is subject to known and unknown risks and uncertainties and other factors, which may cause actual results, levels and timing of activity and achievements to differ materially from those expressed or implied by such information.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as such term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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