Huntington Exploration Inc.

Huntington Exploration Inc.

September 17, 2014 16:16 ET

Huntington Announces Proposed Acquisition of Regency Metals Corp.

CALGARY, ALBERTA--(Marketwired - Sept. 17, 2014) - Huntington Exploration Inc. ("HEI" or the "Corporation") (TSX VENTURE:HEI) announced today that it has entered into an amalgamation agreement (the "Amalgamation Agreement") with Regency Metals Corp. ("Regency") a private arm's length Alberta company, and a wholly-owned subsidiary of HEI, whereby HEI will acquire Regency pursuant to an amalgamation of Regency and the wholly-owned subsidiary, and the amalgamated company will continue as one wholly-owned subsidiary of the Corporation (the "Transaction"). Under the terms of the Amalgamation Agreement, Regency shareholders will receive approximately 2.916 common shares of HEI ("HEI Shares") for every one (1) Regency common share.

The Transaction will be undertaken by means of a three-cornered amalgamation under the Business Corporations Act (Alberta), pursuant to which Regency will become a wholly-owned subsidiary of the Corporation. In connection with the Transaction, HEI will issue approximately 47,681,369 HEI Shares to Regency shareholders. In addition, the holders of the currently outstanding 18,411,000 common share purchase warrants of Regency will be entitled to purchase an aggregate of up to 53,688,562 HEI Shares at exercise prices ranging from of $0.05 to $0.075 per HEI Share and the holders of the currently outstanding 1,800,000 stock options of Regency will be entitled to purchase an aggregate of up to 5,249,004 HEI Shares at an exercise price of $0.05 per HEI Share.

The Amalgamation Agreement provides that completion of the Transaction is subject to certain conditions, including receipt of all regulatory approvals, including approval of the TSX Venture Exchange, and the approval of the shareholders of Regency. A meeting of the shareholders of Regency is currently scheduled to be held on October 9, 2014 for the purpose of approving the Transaction. Provided that shareholder approval is obtained and all other conditions to close are satisfied or waived, the Transaction is anticipated to close before the end of October, 2014.

Concurrently with the closing of the Transaction, the Corporation intends to complete a non-brokered private placement offering of units ("Units") at a price of $0.05 per Unit for gross proceeds of up to $2 million (the "Offering"). Each Unit will be compromised of one HEI Share and one common share purchase warrant ("HEI Warrant"), with each HEI Warrant entitling the holder to purchase one additional HEI Share at a price of $0.075 per HEI Share at any time prior to the earlier of: (i) the date that is twelve months from the date of the issuance of the Units; and (ii) in the event that the closing price of the HEI Shares on the TSX Venture Exchange has been at least $0.25 for a minimum of 21 consecutive trading days (whether or not trading occurs on all such days), the date that is 30 days after delivery of notice (such notice to be provided at the sole discretion of HEI) to the holders of the HEI Warrants that the expiry date of such warrants has been accelerated.

The net proceeds of the Offering will be used for expenditures associated with the identification, evaluation and acquisition of interests in oil and gas properties and for general working capital. Closing of the Offering is subject to regulatory approval, including approval of the TSX Venture Exchange. All securities issued in connection with the Offering will be subject to a hold period of four months from the date of closing.

A finder's fee of up to 8% of the gross proceeds of the Offering may be paid, on all or any portion of the funds raised pursuant to the Offering. In addition, finders will receive finders warrants equal to up 8% of the number of Offered Units issued in connection with the Offering. Each finder's warrant will entitle the holder to purchase one HEI Share at a price of $0.05 per share for a period of twelve months after the closing.

Upon completion of the Transaction and the Offering, HEI expects to have approximately 181,635,867 common shares issued and outstanding (of which former shareholders of Regency will hold approximately 28.5%) and over $2,500,000 in cash. In addition, the acquisition of Regency will reduce liabilities of HEI on a consolidated basis by approximately $1,984,753, being the amount of indebtedness owing to Regency by HEI as at June 30, 2014.

Forward-Looking Statements

This press release contains certain statements which constitute forward-looking statements or information ("forward-looking statements"), including statements regarding HEI's business, the Transaction, and the timing of the closing of the Transaction. Such forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond HEI's and Regency's control, including the ability of HEI and Regency to satisfy the conditions to completion of the Transaction, the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, environmental risks, operational risks in exploration and development, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and the ability to access sufficient capital from internal and external sources. Although HEI believes that the expectations in the forward-looking statements are reasonable, they are based on factors and assumptions concerning future events which may prove to be inaccurate. Those factors and assumptions are based upon currently available information. Such statements are subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward looking information. As such, readers are cautioned not to place undue reliance on the forward looking information, as no assurance can be provided as to future results, levels of activity or achievements. The forward-looking statements contained in this document are made as of the date of this document and, except as required by applicable law, HEI does not undertake any obligation to publicly update or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary statement.

HEI is an exploration-focused company actively pursuing opportunities in the oil and natural gas business in the Western Canada sedimentary basin.

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.

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