Blacksteel Energy Inc.

September 24, 2015 13:34 ET

Blacksteel Energy Inc. Announces Initial Closing of Private Placement and Sponsorship

CALGARY, ALBERTA--(Marketwired - Sept. 24, 2015) -


Blacksteel Energy Inc. (TSX VENTURE:BEY) ("Blacksteel" or the "Corporation") is pleased to announce that it has completed an initial closing of its proposed private placement and entered into an engagement letter with Canaccord Genuity Corp. to act as sponsor for its acquisition of TERIC Power Ltd. ("TERIC") (the "Proposed Transaction"). The Proposed Transaction is considered to be a reverse take-over under the policies of the TSX Venture Exchange Inc. Completion of the Proposed Transaction will be subject to customary closing conditions, including regulatory and shareholder approval. Full details of the Proposed Transaction are set forth in the Corporation's press release issued on July 30, 2015.

Initial Closing of Private Placement

On September 16, 2015, Blacksteel completed an initial closing (the "Initial Closing") of $1,109,400 of its proposed non-brokered private placement of units (the "Units") and convertible debentures (the "Convertible Debentures") (the "Offering"). The Initial Closing consisted of $663,000 of Convertible Debentures and $446,400 of Units. The Offering is intended to raise gross proceeds of $3,500,000 with a maximum issuance of $1,800,000 of Convertible Debentures, subject to increase at the discretion of the Corporation.

Each Unit consists of one common share of the Corporation (the "Common Share") and one half of one Common Share purchase warrant (the "Warrant") at a price of $0.15 per Unit. Each whole Warrant is exercisable for one Common Share at a price of $0.25 for a period of 18 months following the closing of the Offering. The Convertible Debentures are issued in denominations of $1000 and have a term of four years from issuance (the "Maturity Date"), with an interest rate of 8.5% per annum, payable in cash on a semi-annual basis, with the first payment due on March 31, 2016. Each Convertible Debenture is convertible, at the holder's option, into Common Shares at any time prior to the earlier of the business day immediately preceding the Maturity Date and the business day immediately preceding any date fixed for redemption by the Corporation at a conversion price of $0.25 per Common Share (the "Conversion Price"). The Conversion Price shall be subject to standard anti-dilution adjustments. Prior to the Maturity Date, and after at least two years from the issuance of the Convertible Debentures, the Corporation may: (a) redeem the Convertible Debentures through payment of the outstanding principal and any accrued and unpaid interest; and/or (b) force the conversion of the Convertible Debentures if the 20 day weighted average volume trading price of the Common Shares is no less than $0.40.

Under the Initial Closing, Blacksteel paid a finder's fee equal to 8.0% of the gross proceeds of the Initial Closing, being $35,712 to Canaccord Genuity Corp. ("Canaccord") and also issued 591,680 finder's warrants to Canaccord. Each finder's warrant entitles the holder to acquire a Common Share at an exercise price of $0.15 on or before September 16, 2016.

All securities issued under the Initial Closing are subject to a hold period under applicable securities laws until January 17, 2016.

Sponsorship of the Proposed Transaction

Canaccord, subject to completion of satisfactory due diligence and the execution of a formal sponsorship agreement, has agreed to act as sponsor to Blacksteel in connection with the Proposed Transaction. An agreement to sponsor should not be construed as any assurance with respect to the merits of the Proposed Transaction or the likelihood of completion.

Investors are cautioned that, except as disclosed in the management information circular to be prepared in connection with the Proposed Transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Blacksteel Energy Inc. should be considered highly speculative.

The TSX Venture Exchange has in no way passed upon the merits of the Proposed Transaction and has neither approved nor disapproved the contents of this press release.

Blacksteel Energy Inc.

Blacksteel is a junior oil and gas company involved in the exploration, exploitation, development and production of petroleum and natural gas resources.

This news release may contain forward-looking statements relating to the Proposed Transaction, including statements regarding the anticipated acquisition of TERIC, the completion of the Offering, the receipt of all necessary regulatory approvals and satisfaction of all other closing conditions in connection with the Proposed Transaction and other statements that are not historical facts. Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur, which may cause actual performance and results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. These assumptions, risks and uncertainties include, among other things: the risk that the Proposed Transaction will not be completed if a formal agreement is not reached or that the necessary approvals and/or exemptions are not obtained or some other condition to the closing of the Proposed Transaction is not satisfied; the risk that closing of the Proposed Transaction could be delayed if TERIC is not able to obtain the necessary approvals on the timelines planned; the assumptions relating to the parties entering into the formal agreement in respect of the Proposed Transaction, its structure, and the timing thereof, the timing of obtaining required approvals and satisfying closing conditions for the Proposed Transaction, state of the economy in general and capital markets in particular, investor interest in the business and future prospects of Blacksteel and TERIC.

The forward-looking statements contained in this press release are made as of the date of this press release. Except as required by law, Blacksteel and TERIC disclaim any intention and assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities law. Additionally, Blacksteel, and TERIC undertake no obligation to comment on the expectations of, or statements made, by third parties in respect of the matters discussed above.

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.

Not for distribution to U.S. Newswire Services or for dissemination in the United States of America. Any failure to comply with this restriction may constitute a violation of U.S. Securities Laws.

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