Touchstone Closes $11.6 Million Private Placement

(Touchstone, 20.Feb.2020) — Touchstone Exploration Inc. announces that further to the company’s announcement on February 19, 2020 regarding the proposed placing (the “Placing”), the company has placed 22,500,000 new common shares of no par value (the “Placing Shares”) with institutional investors in the United Kingdom at a price of 40 pence per Placing Share (approximately C$0.68) (the “Placing Price”), raising gross proceeds of approximately US$11.6 million (£9.0 million).

The Placing Price represents a 10.1 percent and 3.5 percent discount to 44.47 pence and 41.46 pence, being the five and ten day volume weighted average price of the company’s common shares on the AIM market of the London Stock Exchange (“AIM”) as of February 18, 2020, respectively. Shore Capital acted as sole bookrunner in connection with the Placing and Auctus Advisors acted as placing agent.

Paul R. Baay, President and Chief Executive Officer, commented:

The results of the first two wells drilled at Ortoire have exceeded our expectations, and as a result the Board has decided to complete the Placing in order to accelerate exploration drilling on the property. We are delighted by the support we have received from new and existing investors. We continue to thank our shareholders for their ongoing support, and we look forward to continuing to update shareholders as the exploration program continues.

Listing and Voting Rights

Application has been made for the Placing Shares, which will rank pari passu with the company’s existing issued share capital, to be admitted to trading on the Toronto Stock Exchange (“TSX”) and AIM (“Admission”). Subject to the receipt of required approvals from the TSX and AIM, the Placing Shares are expected to be issued and admitted to trading on February 26, 2020. The Placing Shares will represent approximately 12.3 percent of the total issued share capital in the company on Admission.

All Placing Shares being issued by the company pursuant to the Placing will be freely transferable outside of Canada; however, these shares are subject to a four-month and one day restricted hold period in Canada which will prevent such Placing Shares from being resold in Canada, through a Canadian exchange or otherwise, during the restricted period without an exemption from the Canadian prospectus requirement.

Immediately following Admission of the Placing Shares, the company’s issued share capital will consist of 183,203,095 common shares. The company does not hold any common shares in treasury. This figure may be used by shareholders to determine if they are required to notify their interest in, or a change to their interest in, the company.

Related Party Transaction

The Placing includes a subscription by North Energy ASA, an 8.9 percent shareholder of the Company, in respect of 3,750,000 Placing Shares. Following Admission, North Energy ASA will hold 17,990,250 common shares, representing 9.8 percent of the enlarged share capital of the company.

The participation in the Placing by North Energy ASA is considered to be a related party transaction under Rule 13 of the AIM Rules for companies. The Independent Directors consider, having consulted with the company’s Nominated Advisor, Shore Capital, that the terms of the related party transactions are fair and reasonable insofar as shareholders are concerned. ***

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