Sunshine Oilsands Ltd.: Placing of Up to 67,511,000 New Shares Under General Mandate

FOR: SUNSHINE OILSANDS LTD.
HKSE SYMBOL: 2012

Date issue: May 31, 2017
Time in: 7:43 AM e

Attention:

HONG KONG, CHINA and CALGARY, ALBERTA--(Marketwired - May 31, 2017) - The Board of Directors (the "Board") of Sunshine Oilsands Ltd. (the "Corporation" or "Sunshine") (HKSE:2012) is pleased to announce the following:

PLACING OF NEW SHARES UNDER GENERAL MANDATE

(a) The Placing

On May 31, 2017 in Hong Kong (May 31, 2017 in Calgary), the Corporation entered into a placing agreement (the "Placing Agreement") with China Industrial Securities International Capital Limited (the "Placing Agent" or "CISC") under which the Corporation has conditionally agreed to place, through CISC, on a best efforts basis, up to 67,511,000 common shares of the Company (the "Shares") at a price of HK$0.237 per Share (the "Placing Price") which shall be newly issued Shares pursuant to the terms of the Placing Agreement (the "Placing Shares"). It is currently expected that there will be at least six placees of the Placing Shares (who will be independent professional, institutional or other investors) who and whose ultimate beneficial owners are third parties residing in Hong Kong (the "Placees") and independent of and not connected with the Corporation or its connected persons (as defined under the Listing Rules) (the "Placing").

Assuming no further issue of new Shares or repurchase of Shares (other than those failing to be issued upon full exercise of the share options), the number of Placing Shares represents approximately 1.23% of the existing issued share capital of the Company of 5,490,825,358 Shares as at the date of this announcement and approximately 1.21% of the Company's issued share capital of 5,558,336,358 Shares as enlarged by the allotment and issue of the Placing Shares.

(b) Placing Price

The Placing Price represents:

/T/

i. a discount of approximately 17.99% to the average closing price of

approximately HK$0.289 per Share as quoted on the Hong Kong Stock Exchange for the last five consecutive trading days immediately prior to May 31, 2017 (being the last trading day immediately preceding the signing of the Placing Agreement); and

ii. a discount of approximately 15.36% to the closing price of HK$0.28 per

Share as quoted on the Hong Kong Stock Exchange on May 31, 2017.

/T/

The maximum gross proceeds to be raised from the Placing will be HK$ 16,000,107 (approximately CDN$ 2,765,378.49 at the current exchange rate).

The Placing Price was determined with reference to the prevailing market price of the Shares and was negotiated on an arm's length basis between the Corporation and CISC. The directors of the Corporation (the "Directors") consider that the terms of the Placing are on normal commercial terms and are fair and reasonable based on the current market conditions and the Placing is in the interests of the Corporation and its shareholders as a whole.

Completion of the Placing is subject to the fulfillment or waiver (other than conditions (i) and (ii) below which cannot be waived) of the following conditions:

/T/

i. the Stock Exchange of Hong Kong Limited (the "Hong Kong Stock Exchange")

approving the listing of and dealing in the Placing Shares to be issued pursuant to the Placing Agreement on or before 12:00 noon on June 7, 2017;

ii. compliance of the Placing with the requirements under the Rules

Governing the Listing of Securities on the Hong Kong Stock Exchange (the "Listing Rules") and

iii.the receipt of all required documents as stipulated in the Placing

Agreement.

/T/

(d) Termination of the Placing Agreement

The Placing Agent may terminate the Placing Agreement without liability to the Corporation by giving notice in writing prior to 9:00 am on the Placing Completion Date, if in the reasonable opinion of the Placing Agent, the success of the Placing would be adversely affected by (i) any material breach of any of the representations and warranties provided by the Corporation; or (ii) any suspension in dealings in or the listing of the Shares on the Hong Kong Stock Exchange for a period of more than three trading days (other than in connection with the Placing); or (iii) any force majeure events which may adversely affect the Corporation.

(e) Completion of the Placing

Completion of the Placing will take place on three business days (means any day excluding Saturday and Sunday on which commercial banks are generally open for business in Hong Kong) immediately following receipt of the listing approval from the Hong Kong Stock Exchange referred to in condition (c)(i) above or such other date as the parties may agree (the "Placing Completion Date").

The certificates representing the Shares placed for under the Placing will bear certain legends, as required under applicable Canadian securities laws.

Completion of the Placing is subject to the satisfaction of certain conditions. As the Placing may or may not proceed, shareholders and potential investors of the Corporation are advised to exercise caution when dealing in the securities of the Corporation.

(f) General Mandate to Issue Shares

The Placing does not require the approval of the Corporation's shareholders as the Shares under the Placing will be allotted and issued under the general mandate, which was granted to the Board at the annual general meeting of the Corporation held on June 30, 2016 (Hong Kong time) / June 29, 2016 (Calgary time) (the "AGM") to issue up to 20% of its aggregate issued and outstanding share capital as at the date of the AGM until the next annual general meeting of the Corporation (the "General Mandate"). The amount of the General Mandate is 863,699,620 Shares. Details of the General Mandate are set out in the Corporation's circular dated May 31, 2016.

As at the date of this announcement, other than (i) the issuance of 88,234,000 Shares as disclosed in the announcement dated April 28, 2016 (Hong Kong time)/April 27, 2016 (Calgary time); (ii) the issuance of 58,871,000 Shares as disclosed in the announcement dated June 22, 2016 (Hong Kong time)/June 21, 2016 (Calgary time); (iii) the issuance of 137,941,176 Shares as disclosed in the announcement dated October 24, 2016 (Hong Kong time)/October 23, 2016 (Calgary time); (iv) the issuance of 23,529,412 Share as disclosed in the announcement dated October 31, 2016 (Hong Kong time)/October 30, 2016 (Calgary time); (v) the issuance of 50,000,000 Shares as disclosed in the announcement dated December 14, 2016 (Hong Kong time)/December 13, 2016 (Calgary time); (vi) the issuance of 60,000,000 Shares as disclosed in the announcement dated January 24, 2017 (Hong Kong time)/January 23, 2017 (Calgary time); (vii) the issuance of 247,350,000 Shares as disclosed in the announcement dated March 24, 2017 (Hong Kong time)/March 24, 2017 (Calgary time); (viii) the issuance of 40,000,000 Shares as disclosed in the announcement dated March 28, 2017 (Hong Kong time)/March 28, 2017 (Calgary time); and (ix) the issuance of 140,874,000 Shares as disclosed in the announcement dated April 13, 2017 (Hong Kong time)/ April 13, 2017 (Calgary time); the Corporation has not issued, and has not proposed to issue, any Shares under the General Mandate. The Shares when issued pursuant to the Placing will be credited as fully paid and rank pari passu in all respects with the other existing Shares.

(g) Reasons for the Placing and Use of Proceeds from the Placing

The Directors consider that the Placing represents an opportunity to raise capital for the Corporation at an important time for the Corporation. The maximum gross proceeds to be raised from the Placing will be HK$16,000,107 (approximately CDN$ 2,765,378.49 at the current exchange rate). Based on the estimated expenses of approximately HK$ 120,001 (approximately CDN$ 20,740) at the current exchange rate), the maximum net proceeds to be raised from the Placing will be approximately HK$ 15,880,106 (approximately CDN$ 2,744,638.15 at the current exchange rates). On this basis, the net price per Share under the Placing is approximately HK$ 0.235.

The Corporation intends to apply the net proceeds from the Placing (i) for general working capital of the Corporation and (ii) as funds for future development of the existing business of the Corporation, including funding the operation costs of the West Ells project.

(h) Fund Raising Activities of the Corporation in the Past Twelve Months

The Corporation has conducted the following equity fund raising activity in the 12 months preceding the date of this announcement.

/T/

Date of Fund raising Approximate net Intended use of the Actual use of announc activity proceeds raised net proceeds the net ement proceeds ---------------------------------------------------------------------------- April Private HK$ (i) for general HK$ 28, placement of 29,399,568.80 working capital of 29,399,568.80 2016 Common Shares (approximately the Corporation; and (approximately under General CDN$ 4,781,662 CDN$ 4,781,662 Mandate (1)) (ii) as funds for (1)) used as future development intended of the existing business of the Corporation, including funding the development and operation costs of the West Ells project.
June 22, Private HK$ (i) for general HK$ 2016 placement of 19,615,817.20 working capital of 19,615,817.20 Common Shares (approximately the Corporation; and (approximately under General CDN$ 3,240,570 CDN$ 3,240,570 Mandate (2)) (ii) as funds for (2)) used as future development intended of the existing business of the Corporation, including funding the development and operation costs of the West Ells project.
October Private HK$ (i) for general HK$ 24, placement of 45,962,004.00 working capital of 45,962,000.00 2016 Common Shares (approximately the Corporation; and (approximately under General CDN$ 7,893,756 CDN$ 7,893,756 Mandate (3)) (ii) as funds for (3)) used as future development intended of the existing business of the Corporation, including funding the development and operation costs of the West Ells project.
October Private HK$7,840,000.00 (i) for general HK$7,840,000.0 31, placement of (approximately working capital of 0 2016 Common Shares CDN$ 1,353,264 the Corporation; and (approximately under General (4)) CDN$ 1,353,264 Mandate (ii) as funds for (4)) used as future development intended of the existing business of the Corporation, including funding the development and operation costs of the West Ells project.
December Private HK$15,929,625.00 (i) for general HK$15,929,625. 14, placement of (approximately working capital of 00 2016 Common Shares CDN$ 2,694,511.8 the Corporation; and (approximately under General (5)) CDN$ Mandate (ii) as funds for 2,694,511.8 future development (5)) used as of the existing intended business of the Corporation, including funding the development and operation costs of the West Ells project.
January Private HK$ (i) for general HK$ 24, placement of 15,602,100.00 working capital of 15,602,100.00 2017 Common Shares (approximately the Corporation; and (approximately under General CDN$ 2,673,123.6 CDN$ Mandate (6)) (ii) as funds for 2,673,123.6 future development (6)) used as of the existing intended business of the Corporation, including funding the development and operation costs of the West Ells project.
March Private HK$ 69,475,049.6 (i) for general HK$ 24, placement of (approximately working capital of 69,475,049.6 2017 Common Shares CDN$ the Corporation; and (approximately under General 11,925,809.1(7)) CDN$ Mandate (ii) as funds for 11,925,809.1 future development (7)) used as of the existing intended business of the Corporation, including funding the development and operation costs of the West Ells project.
March Private HK$ 11,599,985 (i) for general HK$ 11,599,985 28, placement of (approximately working capital of (approximately 2017 Common Shares CDN$ 1,996,485 the Corporation; and CDN$ 1,996,485 under General (8)) (8)) used as Mandate (ii) as funds for intended future development of the existing business of the Corporation, including funding the development and operation costs of the West Ells project.
April Private HK$ 33,950,634 For settlement of HK$ 33,950,634 13, placement of (approximately indebtedness (approximately 2017 Common Shares CDN$ CDN$ under General 5,861,054.36 5,861,054.36 Mandate (9)) (9))

/T/

Notes

/T/

1. Based on the Bank of Canada's nominal noon exchange rate (as at April

28, 2016) of CDN$1.00 = HK$6.1484. 2. Based on the Bank of Canada's nominal noon exchange rate (as at June 22, 2016) of CDN$1.00 = HK$6.0532 3. Based on the Bank of Canada's nominal noon exchange rate (as at October 24, 2016) of CDN$1.00 = HK$5.8227 4. Based on the Bank of Canada's nominal noon exchange rate (as at October 31, 2016) of CDN$1.00 = HK$5.7934 5. Based on the Bank of Canada's nominal noon exchange rate (as at December 14, 2016) of CDN$1.00 = HK$5.9118 6. Based on the Bank of Canada's nominal noon exchange rate (as at 24 January 2017) of CDN$1.00 = HK$5.8367. 7. Based on the Bank of Canada's nominal noon exchange rate (as at March 24, 2017) of CDN$1.00 = HK$5.8256. 8. Based on the Bank of Canada's nominal noon exchange rate (as at March 28, 2017) of CDN$1.00 = HK$5.8102. 9. Based on the Bank of Canada's nominal noon exchange rate (as at April 5, 2017) of CDN$1.00 = HK$5.7936.

/T/

(i) Effects on Shareholding Structure

The existing shareholding structure of the Corporation and the effect of the Placing on the shareholding structure of the Corporation immediately following the completion of the Placing (assuming there will be no other changes in the issued Shares between the date of this announcement and the completion) is set out below.

/T/

As at the date of this Immediately after Completion Announcement of the Placing --------------------------------------------------------- --------------------------------------------------------- Number of Approx. % of Number of Approx. % of Name of Shareholder Shares Shares Shares Shares ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Sun Kwok Ping 1,272,202,500 23.17% 1,272,202,500 22.89% Bright Hope Global Investment Limited(1) 267,353,088 4.87% 267,353,088 4.81% China Life Insurance (Overseas) Co., Ltd 201,941,600 3.68% 201,941,600 3.63% Tseung Hok Ming 295,893,656 5.39% 295,893,656 5.32% Sinopec Century Bright Capital Investment Limited 239,197,500 4.36% 239,197,500 4.30% Placees - - 67,511,000 1.21% Other public shareholders (excluding Placees) 3,214,237,014 58.54% 3,214,237,014 57.83%
--------------------------------------------------------- --------------------------------------------------------- Total 5,490,825,358 100 5,558,336,358 100 --------------------------------------------------------- ---------------------------------------------------------

/T/

ABOUT SUNSHINE OILSANDS LTD.

The Corporation is a Calgary based public corporation listed on the Hong Kong Stock Exchange since March 1, 2012. The Corporation is focused on the development of its significant holdings of oil sands leases in the Athabasca oil sands region. The Corporation owns interests in approximately one million acres of oil sands and petroleum and natural gas leases in the Athabasca region. The Corporation is currently focused on executing milestone undertakings in the West Ells project area. West Ells has an initial production target rate of 5,000 barrels per day.

The Placing Agent

The Placing Agent has been appointed to place, on a best efforts basis, the Placing shares at the Placing Price. The Placing Agent is a licensed corporation to carry out business in type 1 regulated activity (dealing in securities) and type 6 regulated activity (advising on corporate finance) under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong). To the best of the Directors' knowledge, information and belief, having made all reasonable enquiries, the Placing Agent and its ultimate beneficial owners are independent of and not connected with the Corporation and its connected persons (as defined under the Listing Rules).

Notwithstanding that the Placing Shares shall only be placed to Placees residing in Hong Kong, the Placing Agent and the Corporation agree that the Placing and the Placees must qualify with the applicable securities laws of Alberta, Canada (the "Applicable Securities Laws") as the Corporation is a "reporting issuer" under such law. The Placing Agent agrees, inter alia, that it will offer the Placing Shares for sale on behalf of the Corporation only to Placees who are eligible to purchase such Placing Shares under the private placement exemptions available under the Applicable Securities Laws and conduct its activities in connection with the Placing in compliance with all Applicable Securities Laws.

The Placing Agent will be entitled to receive a commission of 0.75% of the amount equal to the Placing Price multiplied by the actual number of the Placing Shares successfully placed by the Placing Agent. The commission for the Placing was arrived at after arm's length negotiation between the Company and the Placing Agent with reference to the prevailing market practice.

FORWARD LOOKING INFORMATION

This announcement contains forward-looking information relating to, among other things, (a) the closing of, and the anticipated timing of the closing of, the Placing; (b) the future financial performance and objectives of the Corporation; and (c) the plans and expectations of the Corporation. Such forward-looking information is subject to various risks, uncertainties and other factors. All statements other than statements and information of historical fact are forward-looking statements. The use of words such as "estimate", "forecast", "expect", "project", "plan", "target", "vision", "goal", "outlook", "may", "will", "should", "believe", "intend", "anticipate", "potential", and similar expressions are intended to identify forward-looking statements. Forward-looking statements are based on the Corporation's experience, current beliefs, assumptions, information and perception of historical trends available to the Corporation, and are subject to a variety of risks and uncertainties including, but not limited to those associated with resource definition and expected reserves and contingent and prospective resources estimates, unanticipated costs and expenses, regulatory approval, fluctuating oil and gas prices, expected future production, the ability to access sufficient capital to finance future development and credit risks, changes in Alberta's regulatory framework, including changes to regulatory approval process and land-use designations, royalty, tax, environmental, greenhouse gas, carbon and other laws or regulations and the impact thereof and the costs associated with compliance. Although the Corporation believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned that the assumptions and factors discussed in this announcement are not exhaustive and readers are not to place undue reliance on forward-looking statements as the Corporation's actual results may differ materially from those expressed or implied. The Corporation disclaims any intention or obligation to update or revise any forward-looking statements as a result of new information, future events or otherwise, subsequent to the date of this announcement, except as required under applicable securities legislation. The forward-looking statements speak only as of the date of this announcement and are expressly qualified by these cautionary statements. Readers are cautioned that the foregoing lists are not exhaustive and are made as at the date hereof.

For a full discussion of the Corporation's material risk factors, see the Corporation's annual information form for the year ended December 31, 2016 and risk factors described in other documents we file from time to time with securities regulatory authorities, all of which are available on the Hong Kong Stock Exchange at www.hkexnews.hk, on the SEDAR website at www.sedar.com or on the Corporation's website at www.sunshineoilsands.com.

Placing Agent to the Placing

China Industrial Securities International Capital Limited

By Order of the Board of Sunshine Oilsands Ltd.

Sun Kwok Ping, Executive Chairman

Hong Kong, May 31, 2017

Calgary, May 31, 2017

As at the date of this announcement, the Board consists of Mr. Kwok Ping Sun, Mr. Hong Luo, Dr. Qi Jiang and Mr. Qiping Men as executive directors; Mr. Michael John Hibberd, Ms. Linna Liu and Ms. Xijuan Jiang as non-executive directors; and Mr. Raymond Shengti Fong, Mr. Gerald Franklin Stevenson, Ms. Joanne Yan and Mr. Yi He as independent non-executive directors.

(i)For identification purposes only

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

This announcement appears for information purpose only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities of Sunshine Oilsands Ltd.

(a corporation incorporated under the Business Corporations Act of the Province of Alberta, Canada with limited liability)

- END RELEASE - 31/05/2017

For further information:
Mr. Hong Luo
Chief Executive Officer
(1) 403-984-1450
investorrelations@sunshineoilsands.com
www.sunshineoilsands.com

COMPANY:
FOR: SUNSHINE OILSANDS LTD.
HKSE SYMBOL: 2012

INDUSTRY: Energy and Utilities - Oil and Gas
RELEASE ID: 20170531CC0015

Press Release from Marketwired 1-866-736-3779

All press releases are written by the client and have NO affiliation with the news copy written by The Canadian Press. Any questions that arise due to the content or information provided in the press release should be directed to the company/organization issuing the release, not to The Canadian Press.