Tectonic Metals gets funding for gold exploration in Alaska
The company's Flat gold project is located 40 km north of the giant Donlin gold project.
Oilsands Quest Inc. (NYSE Amex: BQI) (“Oilsands Quest,” “OQI” or “the Company”) has assessed the results of the formal strategic alternatives process launched on August 17, 2010, which explored options to enhance shareholder value. After opening a data room and holding discussions with several entities in recent months, Oilsands Quest has achieved a clear understanding of asset development that potential partners or purchasers are seeking. In order to advance its assets to the next level of certainty toward commercial development, Oilsands Quest intends to pursue funding through a rights offering, under which all existing shareholders will be eligible to purchase, on an equal, proportional basis, additional shares of the Company.
“We have always planned to partner with a larger entity at some point, because building a commercial oil sands project is beyond the financial or operational capability of a company our size,” said Oilsands Quest Chief Executive Officer Garth Wong. “We have heard from potential partners and purchasers that they would like to see us advance and confirm our understanding of our reservoirs in three principal areas prior to entering into a transaction. Specifically, at Axe Lake we need to operate our planned pilot project and further delineate the glacial till cap. At Wallace Creek, we believe we would enhance value by further delineating the bitumen resource. While we will continue to pursue opportunities to partner or sell assets, we have concluded that we must drive ahead to raise the funds to complete these activities.”
The proceeds from the rights offering will be used to advance the Company’s development plan. The key operational priorities are to:
The Company expects to provide further details regarding the planned rights offering in the near-term.
Under the formal strategic alternatives process, a Special Committee of the Board of Directors considered all alternatives to increase shareholder value, including strategic financing opportunities, asset divestitures, joint ventures and/or a corporate sale, merger or other business combination. TD Securities Inc. (“TD Securities”) acted as our financial advisor for the process.
As part of this process, TD Securities and the Company contacted a large number of national and international energy companies and institutional investors. While a number of parties signed confidentiality agreements, were granted access to the Company’s data room and carried out detailed due diligence, the process did not result in any compelling proposals to Oilsands Quest. Feedback from parties in the process has illustrated that potential future partners or acquirers require a further level of development, reducing the remaining areas of uncertainty, in order to be prepared to make a substantial investment. The Company is therefore seeking funding to advance its assets toward commercial development, while remaining open to offers of joint venture opportunities, asset sales or other alternatives.
“In proceeding to the Rights Offering, we want to remind investors of the opportunity we have available with this company,” said Mr. Wong. “Our three 100 per cent-owned oil sands project opportunities together have ultimate production potential of 100,000 barrels of bitumen per day. We were pioneers at Oilsands Quest in exploring the eastern edge of the oil sands basin, and today the activity in the basin is moving toward us as exploration activity increases on lands close or adjacent to ours by companies such as Imperial Oil Limited, Cenovus Energy Inc., SilverBirch Energy Corporation and Grizzly Oil Sands Inc. With interest and development growing in our area of the basin, we remain confident that once we prove the viability of the Axe Lake reservoir through pilot and overburden testing, and further delineate Wallace Creek, we will achieve the value recognition that our long-term investors have been seeking.”
Read the full news release here. Image is from Oilsands Quest.
Comments
disgusted
Keep your disgusting tar sands OFF SASKATCHEWAN SOIL!!!!!