Sunshine Oilsands Ltd. — Capital/Financing Update 2020

Apr 1, 2020

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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

(1) ISSUE OF CONVERTIBLE BONDS TO CONNECTED PERSON UNDER SPECIFIC MANDATE; AND

(2) APPOINTMENT OF INDEPENDENT FINANCIAL ADVISER

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

Hong Kong, April 1, 2020 Calgary, April 1, 2020

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 non-executive directors; and Mr. Yi He, Mr. Alfa Li and Mr. Guangzhong Xing as independent non-executive directors.

*For identification purposes only

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Hong Kong (April 1, 2020) and Calgary, Alberta (April 1, 2020) - The Board of Directors (the “ Board ”) of Sunshine Oilsands Ltd. (the “ Corporation ” or “ Sunshine ”) (HKEX: 2012) wishes to announce the following:

THE SUBSCRIPTION

The Board is pleased to announce that on April 1, 2020 (Hong Kong Time), the Corporation and the Subscriber, being a wholly owned company by Mr. Sun, the Chairman, Executive Director and Substantial Shareholder of the Corporation entered into the Subscription Agreement, pursuant to which, the Corporation has conditionally agreed to issue and the Subscriber has conditionally agreed to subscribe for the fixed rate convertible bonds to be issued by the Corporation in an aggregate principal amount of HK$ 72,000,000.

Completion is subject to the fulfillment or waiver of the condition precedent set out in the Subscription Agreement. Detailed terms of the Subscription Agreement and the CB are set out in the paragraphs headed “ THE SUBSCRIPTION AGREEMENT ” and “ THE PRINCIPAL TERMS OF THE CB ”, respectively.

The issue price for the CB shall be HK$ 72,000,000 (being 100% of the principal amount of the CB). Based on the initial Conversion Price of HK$0.632 per Share, a maximum of 113,924,051 new Shares will be allotted and issued upon the full exercise of the CB, representing (i) approximately 88.93% of the existing issued share capital of the Corporation as at the date of this announcement; and (ii) approximately 47.07% of the allotment and issued share capital of the Corporation as enlarged by the issuance of the Conversion Shares (assuming there was no repurchase of Shares or issuance of other new Shares).

No listing of the CB will be sought on the Stock Exchange or any other stock exchanges. The Corporation will apply to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Conversion Shares.

IMPLICATIONS UNDER THE LISTING RULES

The Subscriber is a company wholly owned by Mr. Sun, being the Chairman, Executive Director and Substantial Shareholder of the Corporation, and is therefore, an associate of the connected person of the Corporation under Chapter 14A of the Listing Rules. The Subscription constitutes a non-exempt connected transaction for the Company under Chapter 14A of the Listing Rules and is subject to the announcement, reporting and Independent Shareholders’ approval requirements pursuant to the Listing Rules.

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Mr. Sun, through his ownership in the Subscriber, is deemed to be interested in the Subscription, has abstained from voting at the Board meeting held to approve the Subscription.

The issuance of the Subscription Shares will also be subject to, amongst other things, the approval of the Independent Shareholders for the granting of the Specific Mandate at the SGM in accordance with the requirements of the Listing Rules.

INDEPENDENT BOARD COMMITTEE AND INDEPENDENT FINANCIAL ADVISER

The Independent Board Committee, comprising all independent non-executive Directors who have no direct or indirect interest in the Subscription, the Specific Mandate and the transactions contemplated thereunder, namely Messrs. David Yi He, Guangzhong Xing and Alfa Li, have been formed to advise the Independent Shareholders on the Subscription, the Specific Mandate and the transactions contemplated thereunder.

With the approval of the Independent Board Committee, the Independent Financial Adviser has been appointed to advise the Independent Board Committee and the Independent Shareholders in respect of the Subscription, the Specific Mandate and the transactions contemplated thereunder.

SGM

The SGM will be convened and held for the purposes of considering and, if thought fit, approving the Subscription, the Specific Mandate and the transactions contemplated thereunder. The Subscriber and his associates who were interested in the Subscription Agreement and the Specific Mandate shall abstain from voting at the SGM in respect of all necessary resolutions approving the Subscription Agreement, the Specific Mandate and the transactions contemplated thereunder to be proposed at the SGM. The voting in respect of the Subscription, the Specific Mandate and the transaction contemplated thereunder at the SGM will be conducted by way of a poll.

A circular containing, among other things, (i) details of the Subscription, the Specific Mandate and the transactions contemplated thereunder; (ii) the recommendations of the Independent Board Committee to the Independent Shareholders; (iii) the letter of advice from the Independent Financial Adviser to the Independent Board Committee in relation to the Subscription, the Specific Mandate and the transactions contemplated thereunder; and (iv) a notice convening the SGM, will be despatched to the Shareholders within 15 business days of the date of this announcement.

The Subscription is subject to the fulfillment (or waiver, if applicable) of a number of conditions precedent set out under the section headed “The Subscription — Conditions of the Subscription” in this announcement, including approval at the SGM by the Independent Shareholders of the Subscription, the Specific Mandate and the

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transactions contemplated thereunder. As such, the Subscription may or may not proceed.

Shareholders and potential investors of the Corporation are advised to exercise caution when dealing in the Shares. Persons who are in doubt as to the action they should take should consult their stockbroker, licensed securities dealer or registered institution in securities, bank manager, solicitor, professional accountant or other professional advisers.

INTRODUCTION

The Corporation and the Subscriber, being a wholly owned company by Mr. Sun, the Chairman, Executive Director and Substantial Shareholder of the Corporation, entered into the Subscription Agreement, pursuant to which, the Corporation has conditionally agreed to issue and the Subscriber has conditionally agreed to subscribe for the fixed rate convertible bonds to be issued by the Corporation in an aggregate principal amount of HK$ 72,000,000.

THE SUBSCRIPTION AGREEMENT

Date

April 1, 2020 (Hong Kong Time)

Parties

(i) the Corporation as issuer; and

• (ii) the Subscriber

As at the date of this announcement, Mr. Sun, being the Chairman, Executive Director and Substantial Shareholder of the Corporation, together with his controlled companies, are interested in 36,308,540 Shares in aggregate, representing about 28.03% of the issued Shares of the Corporation as at the date of this announcement.

PRINCIPAL TERMS OF THE CB

The terms of the CB have been negotiated on an arm’s length basis, principal terms of which are summarized as follows:

Issuer	:	Sunshine Oilsands Limited
Principal Amount	:	HK$ 72,000,000

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Term	:	2 years
Maturity Date	:	March 31, 2022
Denomination	:	The CB are issued in denomination of HK$ 1,000,000 each
Interest	:	The CB shall bear an interest rate of 8% per annum on the outstanding principal amount thereof from the Issue Date, payable by the Corporation at the Maturity Date
Conversion Price	:	HK$0.632 per Share (Conversion price is set at the higher of :- ➢ the closing price on execution date of the Subscription Agreement; and ➢ the average closing price per Share as quoted on the Stock Exchange for the last five consecutive trading days prior to execution date of the Subscription Agreement)
Conversion	:	The CB holder has the rights to convert any outstanding principal of the CB into the Shares during the period from the date of six months after the date of the Subscription Agreement until the Maturity Date, subject to the Corporation’s written approval. Given that, the Corporation shall not allot and issue Shares to the CB holder if upon the exercise of the Conversion Rights (i) the CB holder and parties acting in concert aggregated together with existing Shares held shall be interested (whether directly or indirectly) in 29.90% or more of the consequential enlarged issued share capital of the Corporation unless the CB holder has obtained a whitewash waiver from the SFC; (ii) any other percentage as may from time to time be specified in the Takeovers Code as being the level of triggering a mandatory general offer unless the CB holder has obtained a whitewash waiver from the SFC; or (iii) the Corporation shall fail to maintain a 25% public float.
Listing	:	The CB will not be listed on the Stock Exchange or any other stock exchanges. An application will be made to

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the Stock Exchange for the listing of, and permission to deal in, the Conversion Shares Ranking : The Conversion Shares, when issued and fully paid, will rank pari passu among themselves and with all existing Shares presently in issue and at the time of allotment and issue of the Conversion Shares and in particular shall rank in full for all dividends and other distributions declared made or paid hereafter.

CONDITION PRECEDENT OF THE SUBSCRIPTION

Completion of the CB is conditional upon:

• I. as required by the Listing Rules, the passing of all necessary resolutions by the Independent Shareholders at the SGM approving the Subscription and the granting of the Specific Mandate to allot and issue the Conversion Shares to the Subscriber;

• II. the Listing Committee granting or agreeing to grant (subject to allotment) and not having withdrawn or revoked the approval of listing of and permission to deal in all the Conversion Shares which may fall to be allotted and issued upon the exercise of the Conversion Right; and

• III. all actions by or in respect of or filings with, consents or approvals from any governmental or regulatory authority or other third parties required to permit the consummation of the transactions contemplated by the Subscription Agreement having been taken, made or obtained and all other relevant regulatory requirements having been complied with by the Corporation.

COMPLETION OF THE SUBSCRIPTION

Completion shall take place (unless otherwise agreed) on or before June 15, 2020 following satisfaction of the condition precedent set out above.

The Corporation and the Subscriber shall use their respective best endeavor to procure the fulfilment of the conditions set out above on or June 15, 2020. If the above conditions are not fulfilled by 5:00 p.m. on June 15, 2020 (or such other date as agreed between the Corporation and the Subscriber in writing), the Subscription Agreement shall forthwith cease and terminate and neither the Corporation nor the Subscriber shall have any claim against each other, save for any antecedent breach.

As at the date of this announcement, none of the condition precedent set out above have been fulfilled.

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CONVERSION PRICE

The initial Conversion Price of HK$0.632 per Conversion Share represents:

• I. approximately 26.4% premium to the closing price of HK$0.50 per Share as quoted on the Stock Exchange on April 1, 2020 (being the last trading day immediately prior to signing the Subscription Agreement); and

• II. equivalent to the average closing price of HK$0.632 per Share as quoted on the Stock Exchange for the last five consecutive trading days up to and including March 31, 2020.

Mandates for the issue of the Conversion Shares

The Conversion Shares will be allotted and issued pursuant to the Specific Mandate to be sought from the Independent Shareholders at the SGM.

REASONS FOR AND BENEFITS OF ISSUANCE OF THE CONVERTIBLE BONDS

The Corporation is focused on the development of its significant holdings of oil sands leases in the Athabasca oil sands region.

Due to the drastic drop in crude oil prices, the Corporation's operating income and cash flow have fallen sharply. Coupled with the outbreak and widespread of COVID-19 virus all around the world, obstructed economic activity has led to a severe decline in demand for oil, which further adversely affects the financing opportunities of the Corporation. On the other hand, in addition to daily operating costs, the Corporation also needs to repay some of its debts. The management has continuously tried various alternatives during the past few months, including debt financing or equity financing (such as placements) through banks or financial institutions, but failed to succeed due to the adverse market conditions.

After arms’ length negotiation and careful consideration, in order to meet the urgent funding needs, the Corporation discussed and came up with a proposal with the Chairman Kwok Ping Sun, being the Chairman, Executive Director and Substantial Shareholder of the Corporation, whereby the Corporation will issue CB to Chairman Sun on terms set out above.

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

USE OF PROCEEDS

The estimated net proceeds from the Subscription, after deduction of expenses and fees payable by the Corporation are expected to be approximately HK$71,500,000. The Corporation intends to apply the proceeds as follows:-

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• i. approximately 80% for general working capital; and

• ii. the remaining 20% for repayment of debts.

CAPITAL RAISING ACTIVITIES OF THE CORPORATION DURING THE PAST 12 MONTHS

June 17, 2019		Private	placement	HK$ 81,406,545	For general	For general		USD$ 10,450,000(1)– 100%
		of	convertible	(approximately	working capital and			for general working capital
		bonds General	under Mandate	USD 10,450,000 (1))	capital expenditure for West Ells			and capital expenditure for West Ells project
					project
July 11, 2019		Private	placement	HK$2,003,750.	For	payment	of	CDN$ 335,602.95(2)– there
		of	Common	(approximately	director fees		to	is no actual cash inflow into
		Shares	under	CDN$135,640.57	certain Directors			the Corporation as the
		General	Mandate	(2))				issuance of shares was to
								offset the entire Connected
								Director fee
August 16, 2019		Private	placement	HK$4,442,166.93	For	settlement	of	HK$4,442,166.93 – there is
		of	Common	(approximately	debt			no actual cash inflow into the
		Shares	under	CDN$754,724.16 )				Corporation as the issuance
		General	Mandate					of shares was to settle the
								debt
August 22, 2019		Private	placement	HK$7,088,040	For settlement with			CDN$1,200,000(3)– there is
		of	Common	(approximately	trade	creditor		no actual cash inflow into the
		Shares	under	CDN$1,200,000				Corporation as the issuance
		General	Mandate	(3))				of shares was to settle the
								trade payable
October 17, 2019		Private	placement	HK$2,376,846.73	For settlement with			CDN$402,875.52(4)– there is
		of	Common	(approximately	trade	creditor		no actual cash inflow into the
		Shares	under	CDN$402,875.52				Corporation as the issuance
		General	Mandate	(4))				of shares was to settle the
								trade payable
December	16,	Private	placement	HK$2,705,733.57	For settlement with			CDN$456,998.40(5)– there is
2019		of	Common	(approximately	trade	creditor		no actual cash inflow into the
		Shares	under	CDN$456,998.40				Corporation as the issuance
		General	Mandate	(5))				of shares was to settle the
								trade payable
March 5, 2020		Private	placement	HK$1,890,330	For settlement with			CDN$323,670.19(6)– there is
		of	Common	(approximately	trade	creditor		no actual cash inflow into the
		Shares	under	CDN$323,670.19				Corporation as the issuance
		General	Mandate	(6))				of shares was to settle the
								trade payable

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Notes

1. Based on the exchange rate quoted by The Hong Kong and Shanghai Banking Cooperation Limited on June 16, 2019

2. Based on the Bank of Canada's nominal noon exchange rate (as at July 10, 2019) of CDN$1.00 =HK$5.9706.

3. Based on the Bank of Canada's nominal noon exchange rate (as at August 21, 2019) of CDN$1.00 =HK$5.9067.

4. Based on the Bank of Canada's nominal noon exchange rate (as at October 16, 2019) of CDN$1.00 =HK$5.8997.

5. Based on the Bank of Canada's nominal noon exchange rate (as at December 15, 2019) of CDN$1.00 =HK$5.9207.

6. Based on the Bank of Canada's nominal noon exchange rate (as at March 4, 2020) of CDN$1.00 =HK$5.8403.

Save as disclosed above, the Corporation has not conducted any funds raising activities in the past twelve months before the date of this announcement.

CHANGE IN SHAREHOLDING STRUCTURE

Assuming there is no change in the share capital of the Corporation from the date of this announcement up to the Completion, the shareholding structure of the Corporation (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 Conversion Price is as follows:

Name of Shareholders	As at the date of this announcement Number of Shares Approx. % of Shares 36,308,540 28.03% - 93,246,090 71.97% 129,554,630(1) 100.00%	As at the date of this announcement Number of Shares Approx. % of Shares 36,308,540 28.03% - 93,246,090 71.97% 129,554,630(1) 100.00%	Immediately after the allotment and issuance of the Conversion Shares upon full conversion of the CB at the Conversion Price	Immediately after the allotment and issuance of the Conversion Shares upon full conversion of the CB at the Conversion Price
	Number of Shares 36,308,540 - 93,246,090 129,554,630(1)		Number of Shares 36,308,540 113,924,051 93,246,090 243,478,681(1)	Approx. % of Shares
Kwok Ping Sun The Subscriber Other public Shareholders (excluding the Subscriber) Total		28.03% 71.97% 100.00%		14.91% 46.79% 38.30%
				100.00%

Note:

(1) The above figure does not include 990,347,263 new Shares (equivalent to approximately 19,979,685 new consolidated Shares after share consolidation) to be allotted and issued upon the full conversion of the CB pursuant to the Subscription Agreement per the announcement dated June 16, 2019, supplemented by the announcement dated June 17, 2019 and the announcement dated February 26, 2020.

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IMPLICATIONS UNDER THE LISTING RULES

The Subscriber is a company wholly owned by Mr. Sun, being the Chairman, Executive Director and Substantial Shareholder of the Corporation, and is therefore, an associate of the connected person of the Corporation under Chapter 14A of the Listing Rules. The Subscription constitutes a non-exempt connected transaction for the Company under Chapter 14A of the Listing Rules and is subject to the announcement, reporting and Independent Shareholders’ approval requirements pursuant to the Listing Rules.

Mr. Sun, through his ownership in the Subscriber, is deemed to be interested in the Subscription, has abstained from voting at the Board meeting held to approve the Subscription.

The issuance of the Conversion Shares will also be subject to, amongst other things, the approval of the Independent Shareholders for the granting of the Specific Mandate at the SGM in accordance with the requirements of the Listing Rules.

POSSIBLE MANDATORY GENERAL OFFER

Both the Corporation and the Subscriber are fully aware that, upon conversion of the CB by the Subscriber from time to time, it may trigger Rule 26.1 of the Takeovers Code that require the Subscriber to make a mandatory general offer to the Shareholders for all issued Shares of the Corporation (not already owned or agreed to be acquired by it or any parties acting in concert with it). The Corporation will issue further announcement in this regard as and when appropriate.

INDEPENDENT BOARD COMMITTEE AND INDEPENDENT FINANCIAL ADVISER

The Independent Board Committee, comprising all independent non-executive Directors who have no direct or indirect interest in the Subscription, the Specific Mandate and the transactions contemplated thereunder, namely Messrs. David Yi He, Guangzhong Xing and Alfa Li, has been formed to advise the Independent Shareholders on the Subscription, the Specific Mandate and the transactions contemplated thereunder.

With the approval of the Independent Board Committee, the Independent Financial Adviser has been appointed to advise the Independent Board Committee and the Independent Shareholders in respect of the Subscription, the Specific Mandate and the transactions contemplated thereunder.

SGM

The SGM will be convened and held for the purposes of considering and, if thought fit, approving the Subscription, the Specific Mandate and the transactions contemplated thereunder. The Subscriber, who is interested in the Subscription Agreement, the Specific Mandate and the transactions contemplated thereunder, shall abstain from voting at the SGM in respect of all necessary resolutions approving the Subscription Agreement, the Specific Mandate and the transactions contemplated thereunder. The voting in respect of the

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Subscription, the Specific Mandate and the transactions contemplated thereunder at the SGM will be conducted by way of a poll.

The Subscriber, Mr. Sun and his respective associates shall abstain from voting on the resolutions approving the Subscription, the Specific Mandate and the transactions contemplated thereunder at the SGM. As at the date of this announcement, Mr. Sun is directly or indirectly interested in 36,308,540 Shares, representing approximately 28.03% of the issued share capital of the Corporation.

Save as disclosed above, to the best knowledge of the Directors, no other existing Shareholder has a material interest in the Subscription, the Specific Mandate and the transactions contemplated thereunder and therefore no Shareholder is required to abstain from voting in relation to the resolutions to approve the Subscription, the Specific Mandate and the transactions contemplated thereunder to be proposed at the SGM.

A circular containing, among other things, (i) details of the Subscription, the Specific Mandate and the transactions contemplated thereunder; (ii) the recommendations of the Independent Board Committee to the Independent Shareholders; (iii) the letter of advice from the Independent Financial Adviser to the Independent Board Committee in relation to the Subscription, the Specific Mandate and the transactions contemplated thereunder; and (iv) a notice convening the SGM, will be despatched to the Shareholders within 15 business days of the date of this announcement.

Shareholders and potential investors of the Corporation are advised to exercise caution when dealing in the Shares. Persons who are in doubt as to the action they should take should consult their stockbroker, licensed securities dealer or registered institution in securities, bank manager, solicitor, professional accountant or other professional advisers.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following terms shall have the following meanings:

“acting in concert” has the same meaning as ascribed to it under the Takeovers Code “associate(s)” has the same meaning as ascribed to it under the Takeovers Code, unless the contexts otherwise specify “Board” the board of Directors “Business Day” a day (except Saturday, and Sunday and public holiday) on which banks in Hong Kong are open for business

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• “CB” or “Convertible the fixed rate convertible bonds issued pursuant to the Bonds” Subscription Agreement “CDN$” Canadian dollars, the lawful currency of Canada “Completion” completion of the issuance of the Subscription pursuant to the terms of the Subscription Agreement

• “Completion Date” subject to the fulfilment of the condition precedent set out in the Subscription Agreement, or the latest, June 15, 2020 or other date as the contracting parties to the Subscription Agreement agreed in writing

• “connected has the meanings as ascribed thereto under the Listing person(s)” Rules “Conversion Price” HK$0.632 per Share, subject to adjustments from time to time under the terms and conditions of the Subscription Agreement

• “Conversion Rights” the rights attached to the CB to convert the whole or part thereof into Conversion Shares

• “Conversion A total of 113,924,051 new Share(s) to be allotted and Share(s)” issued by the Corporation upon full exercise of the Conversion Rights

• “Director(s)” the Directors of the Corporation

• “Executive” means the Executive Director of the Corporate Finance Division of the SFC or any delegate of the Executive Director

• “Group”

• the Corporation and its subsidiaries

• “HK$” Hong Kong dollars, the lawful currency of Hong Kong

• “Hong Kong” the Hong Kong Special Administrative Region of the People Republic of China

• “independent third independent third parties who is/are not connected party(ies)” person(s) of the Corporation and is/are independent of and not connected with the Corporation and its Directors, Chief Executives, and substantial shareholders of the Corporation or any of its subsidiaries or their respective associates

• “Issuance” the issue of CB to the Subscriber under the Subscription Agreement

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“Issue Date the date on which completion of the issue of and the subscription for the CB occurs pursuant to the Subscription Agreement “Independent Board an independent committee of the Board established by the Committee” Board, comprising all independent non-executive Directors, namely, Messrs. David Yi He, Guangzhong Xing and Alfa Li “Independent Donvex Capital Limited, a corporation licensed to carry out Financial Adviser” Type 6 (advising on corporate finance) regulated activities under the SFO, being the independent financial adviser appointed by the Independent Board Committee to advise the Independent Board Committee and the Independent Shareholders in respect of terms of the Subscription Agreement, the Specific Mandate and the transactions contemplated thereunder

• “Independent for the purpose of the Subscription, the Specific Mandate Shareholders” and the transactions contemplated thereunder, the Shareholders other than (i) the Subscriber and its associates (as defined under the Listing Rules) and; (ii) any other Shareholders who have a material interest in the Subscription, the Specific Mandate and the transactions contemplated thereunder

• “Last Trading Day” April 1, 2020, being the last trading day of the Shares immediately prior to the date of this announcement

• “Listing Committee” the listing sub-committee of the board of directors of the Stock Exchange

• “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange

• “Mr. Sun” Mr. Kwok Ping Sun, being the Chairman, Executive Director and Substantial Shareholder (as defined under the Listing Rules) of the Corporation; and as at the date of hereof, together with his controlled companies, he is interested in 36,308,540 Shares of the Corporation, representing approximately 28.03% of the issued share capital of the Corporation

• “PRC” The People’s Republic of China, but (solely for the purpose of the Subscription Agreement) excluding Hong Kong and Macau Special Administrative Regions and Taiwan Regions

• “SFC” the Securities and Futures Commission of Hong Kong

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• “SFO” the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

• “Share(s)” The Class “A” Common Voting Share(s) in the issued share capital of the Corporation

• “Shareholder(s)” holder(s) of the Class “A” Common Voting Share(s)

• “SGM”

• the special general meeting of the Corporation to be convened and held for the purposes of approving the Subscription, the Specific Mandate and the transactions contemplated thereunder

• “Specific Mandate” the specific mandate to be granted by the Independent Shareholders to the Board at the SGM for approving the allotment and issuance of the Subscription Shares under the Subscription

• “Subscription the subscription agreement dated April 1, 2020 (Hong Agreement” Kong Time) in respect of the Subscription and entered into between the Corporation and the Subscriber

• “Subscription Price” HK$72,000,000 to be subscribed by Prime Union Enterprises Limited

• “Subscriber” or Prime Union Enterprises Limited, a company incorporated “Prime Union” in the British Virgin Islands with limited liability and is wholly owned by Mr. Sun

• “Subscription” the subscription by the Subscriber for the CB on the terms and subject to the conditions under the Subscription Agreement

• “Stock Exchange” The Stock Exchange of Hong Kong Limited

• “Substantial has the meaning ascribed to it in the Listing Rules Shareholder”

• “Takeovers Code”

• the Hong Kong Code on Takeovers and Mergers issued by the SFC, as amended, supplemented or otherwise modified from time to time

• “US$” United States dollar, the lawful currency of the United States of America

• “%” per cent.

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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 landuse 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 or obligation to update or revise any forward-looking

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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 forwardlooking 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, 2019 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.