Sunshine Oilsands Ltd. — Capital/Financing Update 2019

Jun 17, 2019

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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.

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SUNSHINE OILSANDS LTD. 陽光油砂有限公司 *

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

(HKEX: 2012)

AMENDMENT TO THE TERMS OF THE USD CONVERTIBLE BONDS

AND RESUMPTION OF TRADING

By Order of the Board of Sunshine Oilsands Ltd. Kwok Ping Sun Executive Chairman

Hong Kong, June 17, 2019 Calgary, June 16, 2019

As at the date of this announcement, the Board consists of Mr. Kwok Ping Sun and Ms. Gloria Pui Yun Ho as executive directors; Mr. Michael John Hibberd, Ms. Linna Liu and Ms. Xijuan Jiang as nonexecutive directors; and Mr. Raymond Shengti Fong, Ms. Joanne Yan and Mr. Yi He as independent non-executive directors.

*For identification purposes only

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Reference was made to the announcement dated June 16, 2019 (the “ Announcement ”) issued by the Company in relation to, among other matters, the proposed issuance of USD 9,868,398.69 Convertible Bonds under the General Mandate. Unless otherwise expressly indicated, capitalized terms used herein shall have the same meanings as those defined in the Announcement.

The Board wishes to clarify and supplement that, the Company, the Guarantor and the Subscriber further agreed to amend the terms of the Subscription Agreement. Amendment details are as follows:

• (i) the principal amount of the fixed rate Convertible Bonds to be issued by the Company be increased from USD 9,868,398.69 to USD 10,450,000 (equivalent to approximately HKD 81,406,545 based on the exchange rate quoted by The Hong Kong and Shanghai Banking Cooperation Limited on June 16, 2019) ;

• (ii) the interest rate will be revised from 8% per annum to 10% per annum;

• (iii) the initial Conversion Price for the CB be adjusted from HKD 0.07398 to HKD 0.0822 per Share; and

• (iv) Conversion shares be changed from a maximum of 1,039,143,182 new Shares to 990,347,263 new shares accordingly.

PRINCIPAL AMOUNT OF THE CB

The Subscriber has agreed to subscribe for the revised principal amount of USD 10,450,000 (equivalent to approximately HKD 81,406,545 based on the exchange rate quoted by The Hong Kong and Shanghai Banking Cooperation Limited on June 16, 2019) fixed rate CB pursuant to the Subscription Agreement.

INTEREST RATE

The interest rate will be revised from 8% per annum to 10% per annum.

CONVERSION PRICE

The revised initial Conversion Price of HK$0.0822 per Conversion Share represents:

• I. equivalent to the average closing price of HK$0.0822 per Share as quoted on the Stock Exchange for the last five consecutive trading days up to and including June 13, 2019 ; and

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• II. a premium of approximately 0.24% to the closing price of HK$0.082 per Share as quoted on the Stock Exchange on June 14, 2019 (being the last trading day immediately prior to execution of the Subscription Agreement).

The revised initial Conversion Price was further determined after arm’s length negotiations between the Company, the Guarantor and the Subscriber with reference to the market condition, the prevailing market price of the Shares and the allowable benchmark price permissible under the applicable rules and regulations. The Directors consider that the revised Conversion Price is fair and reasonable.

Based on the adjusted initial Conversion Price of HKD 0.0822 per Share, a maximum of 990,347,263 new Shares will be allotted and issued upon the full exercise of the CB, representing (i) approximately 16.14% of the existing issued share capital of the Company as at the date of this announcement; and (ii) approximately 13.90% of the allotment and issued share capital of the Company as enlarged by the issue of the Conversion Shares (assuming there was no repurchase of Shares or issue of other new Shares).

Up to the date of this announcement, the Board has allotted and issued 156,688,452 Shares under the General Mandate. The Conversion Shares to be issued under the adjusted Conversion Price will be allotted and issued under the General Mandate. No Shareholders approval is required for the allotment and issuance for the Conversion Shares.

Upon the revised Principal amount of CB, the estimated net proceeds from the Subscription is expected to be approximately HKD 79,778,414.10. The Company intends to use the proceeds from the issuance of the CB for general working capital and capital expenditure for West Ells project.

CHANGE IN SHAREHOLDING STRUCTURE

Assuming there is no change in the share capital of the Company from the date of this announcement up to Completion, the shareholding structure of the Company (a) as at the date of this announcement and (b) immediately after the allotment and issue of the Conversion Shares upon full conversion of the CB at the revised Conversion Price is as follows:

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As at the date of this announcement

Immediately after the allotment and issuance of the Conversion Shares upon full conversion of the CB at the revised Conversion Price

Name of Shareholders	Number of Shares 1,698,077,000 - 4,437,769,624 6,135,846,624	Approx. % of Shares	Number of Shares 1,698,077,000 990,347,263 4,437,769,624 7,126,193,887	Approx. % of Shares
Kwok Ping Sun The Subscriber Other public Shareholders (excluding the Subscriber) Total		27.67% - 72.33% 100.00%		23.83% 13.90% 62.27%
				100.00%

As the Subscription is subject to the satisfaction of certain conditions precedent and as the Subscriber is entitled to rescind the Subscription Agreement under certain circumstances, the Subscription may or may not proceed, Shareholders and prospective investors of the Corporation are advised to exercise caution when dealing in the Shares.

Saved as the above revisions, all other terms and conditions of the Subscription Agreement remains unchanged.

The Directors (including the independent non-executive Directors) consider that these revised terms and conditions of the Subscription Agreement, which were arrived at after arm’s length negotiations between the Company, the Subscriber and the Guarantor, are on normal commercial terms, fair and reasonable and are in the interests of the Company and the Shareholders as a whole.

RESUMPTION OF TRADING

At the request of the Company, trading in the Shares of the Company on the Stock Exchange has been halted with effect from 9:00 a.m. on Monday, June 17, 2019 (Hong Kong time) pending the release of this announcement. Application has been made by the Company to the Stock Exchange for the resumption of trading in the Shares on the Stock Exchange with effect from 1:00 p.m. on Monday, June 17, 2019 (Hong Kong time).

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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 of 5,000 barrels per day.

For further enquiries, please contact:

Mr. Kwok Ping Sun Executive Chairman Tel: (852) 3188 9298

Email: investorrelations@sunshineoilsands.com Website: www.sunshineoilsands.com

FORWARD LOOKING INFORMATION

This announcement contains forward-looking information relating to, among other things, 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

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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, 2018 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.