Chieftain Metals Corp.
TSX : CFB

Chieftain Metals Corp.

August 15, 2013 16:25 ET

Chieftain Metals Announces Closing of Tranche of Private Placement of Common Shares and Convertible Debentures

TORONTO, ONTARIO--(Marketwired - Aug. 15, 2013) - Chieftain Metals Corp. ("Chieftain" or the "Company") (TSX:CFB) is pleased to announce that it has completed an initial tranche of a non-brokered private placement to a fund managed by West Face Capital Inc. ("West Face"). The financing consists of 900,000 common shares at $0.80 per share, 54,000 common share purchase warrants and unsecured convertible debentures in the principal amount of $500,000 for gross proceeds to the Company of $1,220,000. The proceeds will be used for the Company's previously announced 2013 exploration campaign (see press release August 6, 2013) and for general corporate purposes.

The debentures mature on August 31, 2016, bear interest at a rate of 8% per annum and are convertible into common shares of the Company at the option of the holder at a conversion price of $1.00 principal per common share (subject to adjustment). The conversion price represents a premium of 29.9% over the August 14, 2013 closing price of the Company's common shares on the Toronto Stock Exchange (the "TSX"). Each warrant is exercisable into one additional common share of the Company at an exercise price of $0.80 per common share for 12 months from their date of issue. The private placement has been conditionally approved by the TSX and all securities issued have a four month hold period.

West Face has also agreed to subscribe for an additional $1,000,000 principal amount of convertible unsecured debentures, on the same terms as above, subject to Chieftain receiving disinterested shareholder approval in accordance with the requirements of the TSX.

Mr. Victor Wyprysky, President and CEO stated, "We are pleased to close this financing with West Face. This funding will allow Chieftain to test important aspects of the geological structure identified earlier this year and is in addition to the other milestones achieved, including the robust project feasibility study published in January 2013 and securing the necessary permits to start construction, contributing to the material progress the Tulsequah-Chief team has achieved this year."

The private placement with West Face is a related party transaction pursuant to applicable securities laws; however, the Company is relying on applicable exemptions from obtaining minority shareholder approval and a formal valuation. To the Company's knowledge, following completion of the initial tranche, West Face owns, or controls or directs, directly or indirectly, approximately 24.9% of the Company's outstanding common shares (calculated on an undiluted basis), and approximately 27.3% of the Company's outstanding common shares (calculated on a partially-diluted basis after giving effect to the exercise of the warrants and the conversion of the convertible debentures issued in the first tranche) and, assuming the second tranche closes, approximately 31.3% of the Company's outstanding common shares (calculated on a partially-diluted basis after giving effect to the exercise of the warrants and the conversion of the convertible debentures). The Company completed this private placement with West Face on a sign and close basis as it represented an advantageous financing opportunity at a premium to market in what is a challenging financing environment for resource issuers.

About Chieftain Metals Corp.:

Chieftain Metals Corp. is the public holding company of Chieftain Metals Inc. ("Chieftain Inc."), whose principal business is the acquisition, exploration and development of mineral properties. Since incorporation, the Company's business has focused entirely on the acquisition, and thereafter the development, of the Tulsequah Chief Polymetallic Project, in north-western British Columbia, Canada. Chieftain Metals Inc.'s property consists of 54 mineral claims and Crown-grants covering approximately 30,547 hectares and covers two previously producing mines. For more information on Tulsequah and related projects, please refer to the NI 43-101 compliant technical reports, being "Technical Report for the Tulsequah Chief Project of Northern British Columbia, Canada" with an effective date of December 12, 2012 as well as "Tulsequah Chief Deposit, Tulsequah Chief Property, Northern British Columbia" and "Big Bull Project, Tulsequah Chief Property, Technical Report, Northern British Columbia", each dated as of November 8, 2010, which are available under the Company's profile on SEDAR (www.sedar.com).

About West Face Capital Inc.

West Face Capital Inc. ("West Face Capital") is one of Canada's leading alternative investment managers with C$2.7 billion in assets under management. West Face Capital is active in a wide range of strategies, including providing bespoke capital solutions to companies with unique opportunities. West Face Capital's capabilities are underpinned by a seasoned multi-disciplinary investment team, proprietary origination channels and deep sector expertise, both domestically and internationally.

Forward-Looking Information:

This press release contains forward-looking information. This forward-looking information includes statements with respect to, among other things, the private placement, the expected timing of closing subsequent tranches of the private placement and the proposed development of the Tulsequah Chief project, Big Bull and the Company's other mineral properties. Forward-looking information is based on the opinions and estimates of management at the date the information is given, and is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. These factors include the inherent risks involved in the exploration and development of minerals properties, the inherent volatility of metal prices, the risk that the Company may not be able to complete additional financing or arrange the necessary additional financing to construct and operate the Tulsequah Chief mine, the possibility of delays in the commencement of production from the Tulsequah Chief mine and other factors. Readers are cautioned to not place undue reliance on forward-looking information because it is possible that predictions, forecasts, projections and other forms of forward-looking information will not be achieved by the Company. The forward-looking information contained herein is made as of the date hereof and the Company assumes no responsibility to update or revise it to reflect new events or circumstances, except as required by law.

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