The shares issued pursuant to the private placement will be subject to a four-month hold period from the date of closing. Net proceeds of the private placement will be used towards the Company's proposed work program on the Nogal and Dharoor oil exploration projects in Puntland, Somalia as well as for general working capital purposes. The private placement is subject to regulatory approval.
Pursuant to Venture Agreements entered into by Canmex and Range Resources Limited on March 4, 2007, Canmex has acquired an 80% participating interest in the licenses and operatorship of the Nogal and Dharoor projects, in consideration for a financial commitment, over a six year period, of approximately US$50 million in exploration expenditures and the payment to Range of an additional US$3.5 million upon commencement of commercial production. The TSX Venture Exchange has conditionally approved the acquisition of the 80% participating interest by Canmex, subject only to the filing of final documentation.
A comprehensive exploration work program is proposed in respect of each of the two exploration areas, which will include:
--Geological fieldwork; --Acquisition of surface high resolution geochemical surveys; --Reprocessing of prior 2D seismic (up to an aggregate of 1,000 line km); --Review and integration of all geophysical and geological data; and --Drilling of four exploratory wells.
The rights and obligations of Range and Canmex in respect of the Nogal and Dharoor projects are governed by the Venture Agreements and by the terms of the Operating Agreements entered into by the parties in respect of each of the two exploration areas.
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