Sunshine Oilsands Ltd. — Capital/Financing Update 2019

Feb 28, 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)

CONNECTED TRANSACTION

FORMATION OF JOINT VENTURE PROJECT COMPANY IN CHINA AND ENTERING INTO PROJECT COOPERATION AGREEMENT

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

Hong Kong, February 28, 2019 Calgary, February 28, 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, Mr. Hong Luo, Ms. Linna Liu and Ms. Xijuan Jiang as non-executive directors; and Mr. Raymond Shengti Fong, Mr. Jeff Jingfeng Liu, Ms. Joanne Yan and Mr. Yi He as independent non-executive directors.

*For identification purposes only

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Hong Kong (February 28, 2019) and Calgary, Alberta (February 28, 2019) - The Board of Directors (the “ Board ”) of Sunshine Oilsands Ltd. (the “ Corporation ” or “ Sunshine ”) (HKEX: 2012) wishes to announce the followings:

References are made to the announcement and the clarification announcement, both dated November 9, 2018 (Hong Kong time) (collectively, the “ Announcements ”) in relation to, among other matters, the formation of joint venture company in China. Unless defined otherwise, capitalized terms used herein shall have the same meanings as those defined in the Announcements.

On November 9, 2018 (Hong Kong time), the Board approved the formation of a joint venture company (the “ JV Company ”) in China between the Corporation and a company affiliated (the “ Affiliate ”) with Mr. Kwok Ping Sun (“ Mr. Sun ”), the Executive Chairman and a Substantial Shareholder (as defined under the Listing Rules) of the Corporation. Sunshine and the Affiliate will own 51% and 49% interests in the JV Company respectively.

FORMATION OF JOINT VENTURE PROJECT COMPANY IN CHINA

On February 28, 2019 (Hong Kong time) / February 28, 2019 (Calgary time), the Corporation and the Affiliate entered into a project cooperation agreement (the “ Project Cooperation Agreement ”) with Chengde City People's Government (“ Chengde City Government ”), Hebei Province, China, pursuant to which the formation of a joint venture project company (the “ JV Project Company ”) by the Corporation and the Affiliate was approved by the Chengde City Government (the “ Transaction ”). The Project Cooperation Agreement also approved the establishment of 50 high-end multi-functional petrol stations (the “ Multi-functional Petrol Stations ”) in Chengde City in the next 3 years. The Multifunctional Petrol Stations will provide integrated services including petrol refueling, gas refueling, electric vehicle charging, smart operator-less car washing, convenience stores, business and casual catering, etc. Sunshine and the Affiliate will own 51% and 49% interests in the JV Project Company respectively.

REASONS FOR AND BENEFITS OF THE FORMATION OF JV PROJECT COMPANY FOR ESTABLISHMENT OF MULTI-FUNCTIONAL PETROL STATIONS

The Board (including all Independent non-Executive Directors) believes that the formation of the JV Project Company for establishment of Multi-Functional Petrol Stations are in the interests of the Corporation and its Shareholders as a whole. Given that the Western Canadian Select (WCS) heavy oil pricing in North America has been far from a reasonable level due to demand and supply conditions, the Board believes that the establishment of Multi-functional Petrol Stations in China is expected to substantially increase the Corporation’s revenue, profit and operating cashflow. Strengthened financial position will also facilitate the Corporation in obtaining financing from banks and financial institutions.

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LISTING RULES IMPLICATIONS

The Affiliate is owned and controlled by Mr. Kwok Ping Sun, being the Executive Chairman and Substantial Shareholder (as defined under the Listing Rules) of the Corporation, and is therefore an associate of Mr. Sun. Hence, the proposed set up of the JV Project Company constitutes connected transaction for the Corporation under Chapter 14A of the Listing Rules.

As one or more of the applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) in respect of the establishment of JV Project Company and Multi-functional Petrol Stations exceed 0.1% but are less than 5%, the Transaction will be subject to the annual review and disclosure requirements but exempt from the independent shareholders’ approval requirements as set out in Chapter 14A of the Listing Rules.

In future, should the Transaction involve provision of goods or services or financial assistance by Sunshine on a continuing or recurring basis and extends over a period of time, the Corporation will issue further announcements for re-classification of the transactions contemplated thereunder as continuing connected transactions. The Corporation further assures that it will fully comply with the requirements under the Listing Rules if the applicable percentage ratios set out in Rule 14.07 in respect of the transactions contemplated under Project Cooperation Agreement, in aggregate, within a 12-month period, trigger the reporting, announcements, annual review and/or independent shareholders’ approval requirements under Chapter 14A of the Listing Rules. Further independent shareholders’ approval will be sought to this end, if applicable and necessary.

Mr. Kwok Ping Sun, being the Executive Chairman and Substantial Shareholder of the Corporation, has abstained from voting on the resolution relating to the formation of the JV Project Company and the Multi-functional Petrol Stations as he owns and controls the Affiliate, which is the Corporation’s joint venture partner in the JV Project Company. Save as disclosed herein, none of the Directors has a material interest in the transactions contemplated under the formation of the JV Project Company and establishment Multifunctional Petrol Stations, and none of them has abstained from voting on the relevant Board resolutions.

The Board wishes to emphasize that the aforesaid JV Project Company formation may or may not proceed. In the event that any formal agreements or arrangements are entered into regarding the JV Project Company may constitute a notifiable transaction under the Listing Rules, the Corporation will make further announcement(s) as and when appropriate.

Shareholders and potential investors are required to exercise caution when dealing in the shares of the Corporation.

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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 Co-operation, 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 February 31, 2017 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.