Saturn Minerals Inc. announces an update on the results from its operated 9-5 Bannock Creek exploration well in northeast Saskatchewan.
As described in the Company's news release dated May 19, 2015 Saturn has now completed a technical review of the 9-5 well with its technical group and drilling consultants. The initial 9-5 borehole encountered formations that lead to successive circulation losses. The hole was recovered repeatedly with the addition of loss circulation material as well as a considerable amount of cement patching. Faulting near the drill target, although important for structural closure, may have also contributed to the lost circulation zones. The hole was lost at a final loss of circulation and collapse of the borehole onto the drill pipe approximately 80 metres from the targeted Red River Formation.
The Company has received a proposal from its drilling consultants for the next borehole to run deeper surface casing and subsequent intermediate casing down most of the length of the hole to avoid any collapse issues while drilling. Packers and cement back filling will also be utilized to stabilize the hole at depth. Additional review of geophysical data is presently being reviewed to determine if a modified location is viable to mitigate the effects of local faulting.
Saturn has determined that the proposal is sound and is completing plans to drill a second oil exploration well at the Bannock Creek Property.
The Company has also arranged a flow through and non-flow through financing as follows:
- 689,654 flow-through units at a price of $0.18 per unit (the "FT Unit"). Each FT Unit consists of one flow-through common share (the "FT Shares") and one-half of a non flow-through share purchase warrant (the "FT Warrants"). Each whole FT Warrant will entitle the holder to purchase one additional non flow-through common share, exercisable at a price of $0.30 per share for a period of 18 months from the date of issue of the FT Warrant. The FT Shares will entitle the holder to receive the tax benefits applicable to flow-through shares, in accordance with provisions of the Income Tax Act (Canada).
- 1,811,000 non flow-through units at a price of $0.18 per unit (the "NFT"). Each NFT Unit consists of one non flow-through common share (the "NFT Shares") and one-half of a non flow-through share purchase warrant (the "NFT Warrants"). Each whole NFT Warrant will entitle the holder to purchase one additional non flow-through common share, exercisable at a price of $0.30 per share for a period of 18 months from the date of issue of the NFT Warrant.
The NFT and FT Warrants (collectively, the "Warrants") are subject to an accelerated expiry if, at any time after an initial 4 month hold period expires, the closing price of Saturn's common shares on the TSX Venture Exchange (the "TSX") exceeds $0.30 for any 20 consecutive trading days, in which event the holder will be given notice that the Warrants will expire 30 days following the date of such notice. The Warrants may be exercised by the holder during the 30-day period between the notice and the expiration of the Warrants.
All securities issued will be subject to a four-month hold period. The offering is subject to the approval of the TSX. This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities. A finder's fee may be payable in accordance with the policies of the TSX. Proceeds from the financing will be utilized to drill a second oil exploration well at Bannock Creek and added to general working capital.