Petroteq Announces That Production of Oil Sands Plant has Recommenced

Source: 1/27/2021, Location: North America

Petroteq Energy Inc., an integrated oil ?company focused on the development and implementation of its proprietary oil-?extraction ?technologies, is pleased to announce that the restart of its oil sands plant at Asphalt Ridge (the "POSP") is currently proceeding more ?or less as planned. The Company received its mining permits earlier this month as expected. The POSP ?has since been started and is processing ore. As at the close of business on January 22, 2021, the POSP had ?produced over 150 barrels of net oil in solvent. The Company is now in the process of optimizing plant operating ?parameters to meet oil product specifications and optimize solvent usage and recovery. This phase is expected to ?last a couple of weeks. Thereafter, initial continuous production is expected to begin with a single, 12-hour shift targeting 250 ?bpd and ramping up in the event a second shift can be added.?

George Stapleton, Petroteq COO, commented: "We have brought the POSP online in stages since commencing ?processing operations in the week beginning the 11th of January, starting with commissioning of the front end of the ?plant and moving from ore crushing to mixing and extraction of bitumen. All upgrades are working as designed and ?the plant has shown that it should be capable of operating continuously. Once we have completed fine-tuning the ?various plant systems, we will then look to increase production rates and move to a two-shift operation. The relative ?ease with which the plant was restarted, after having been shut down for approximately nine months while design ?upgrades were implemented, is a testament to the hard work of both the design and construction teams."?

In addition, the Company announces the closing of a private placement of US$222,000 in principal amount of convertible debentures to certain offshore purchasers pursuant to Rule 903 of Regulation S ("Regulation S") under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"). The debentures have a term of 12 months and bear interest at a rate of 10.0% per annum payable on maturity, and at the option of the holder are convertible into units of the Company at US$0.0562 per unit. Each unit shall consist of one common share of the Company and one common share purchase warrant with each warrant exercisable for one additional common share of the Company at US$0.0562 per share for 24 months from closing of the financing. In connection with the financing, an arm's length finder is entitled to an 8% finder's fee (US$15,540) and finder's warrants exercisable for 276,512 common shares of the Company at US$0.10 per share for 24 months from closing of the financing. The finder's warrants will be issued pursuant to Rule 903 of Regulation S.

The Company also announces that it has closed an equity financing of 7,416,666 common shares of the Company at US$0.06 per share for gross proceeds of US$445,000. Two accredited investors purchased 1,416,666 shares pursuant to Rule 506(b) of Regulation D under the U.S. Securities Act, and the balance of 6,000,000 shares were offered and sold to a single purchaser in an offshore transaction pursuant to Rule 903 of Regulation S.

In addition, the Company has received a subscription from a subscriber for an additional 1,032,475 common shares of the Company at US$0.06 per share for gross proceeds of US$61,949. These shares will be issued pursuant to Rule 903 of Regulation S.

The net proceeds of the above noted financings will be used by the Company on its extraction technology in Asphalt Ridge, Utah, and for working capital.

The above noted subscription for the additional 1,032,475 common shares remains subject to the approval of the TSX Venture Exchange (the "Exchange"), and the approval of the Company's directors. The securities issued and issuable pursuant to the financings will be issued as "restricted securities" (as defined in Rule 144 under the U.S. Securities Act). In addition, such securities will be subject to a Canadian four-month hold period.

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