Buffalo Enters Private Placement to Fund JV

Buffalo Resources reported that subject to the formation and funding of the Joint Venture, Buffalo intends to complete an $11 million "best efforts" private placement offering of units. Each Unit will be issued at a price of $1.00 and will consist of one Buffalo common share and one common share purchase warrant.

Each Warrant will be exercisable for one Buffalo common share at a price of $1.50 per share for a period of 36 months and will be callable by the Company if Buffalo's common shares trade at a price which exceeds $2.25 for a period of 20 consecutive trading days.

Finders, including Ionic Securities Ltd. and Acumen Capital Finance Partners Limited, will participate in the private placement. Buffalo will pay a cash commission equal to 7% of the gross proceeds and will issue common share purchase warrants equal to 7% of the number of Units sold to the finders entitling the holders to acquire one common share of Buffalo at a price of $1.00 for a period of 12 months from the closing.

The private placement is expected to be substantially at arms-length although one of Buffalo's directors is also a director, officer and shareholder of Ionic Securities Ltd. Proceeds from the private placement will be used for working capital and to increase the scope of Buffalo's capital expenditure program through its participation in the Joint Venture. Closing of the private placement will be subject to completion of due diligence and receipt of all regulatory and stock exchange approvals and is conditional upon completion of the Joint Venture with minimum funding from the Participants of $10 million.


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