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January 2020


Silk Energy Announces Closing of Private Placement of Convertible Debentures and Corrects Prior News Release


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Toronto, Ontario–(Newsfile Corp. – January 30, 2020) – Silk Energy Limited (CSE: SILK) (the “Company“) is pleased to announce that it has closed two tranches of its previously announced private placement offering of convertible debentures (the “Convertible Debentures“). To correct and clarify the Company’s news release of December 11, 2019, the Offering of Convertible Debentures is additional to, and separate from, the Company’s ongoing offering of up to $2,000,000 of units.

The Company intends to raise up to USD $2 million from the issuance of Convertible Debentures and closed an initial tranche for gross proceeds of USD $800,000 on December 17, 2019. The Company closed the second tranche raising gross proceeds of USD $200,000 on January 27, 2020.

The Convertible Debentures bear interest at a rate of 8% per annum, have a term of 15 months from the date of issue, and are convertible into units (“Units“) at a conversion price of $0.15 per Unit for a period of the later of 90 days following the issuance of the Convertible Debentures and 60 days from recommencement of trading of the Company’s common shares (should the Company fulfill the CSE’s criteria for listing).

Each Unit will consist of one (1) common share and one-half (1/2) of a common share purchase warrant. Each whole warrant (each a “Warrant“) will be exercisable to acquire one common share of the Company at a price of $0.21 for a period of eighteen months from the date of issuance of the Convertible Debenture. Net proceeds of the offering will be used for general corporate and working capital purposes, including the payment of a USD $1 million fee to KazMunayGas which is a prerequisite to obtaining the Kazakh government’s approval of the Company’s acquisition of UnionField. The completion of the acquisition of UnionField is one of the conditions precedent to the Company’s obtaining approval to list on the Canadian Securities Exchange Securities issued pursuant to the offering are subject to a statutory hold period lasting four (4) months and a day after the issuance of the securities.

Debt Settlement/Issue of Shares

The Company’s board of directors also authorized the issue of common shares to settle certain debts owed to a former auditor of the Company and an arm’s length consulting firm.

The Company settled the amount of CAD $25,990 owed to the former auditor by payment of CAD $13,000 in cash, and the issuance of 65,000 common shares at the deemed price of $0.20 per share.

The Company further settled the amount CAD $75,000 owed to the arm’s length consulting firm by payment of CAD$25,000 in cash and the issuance of 250,000 common shares at the deemed price of $0.20 per share.

Conditional Approval for Listing

The Company received a conditional approval letter from the CSE on December 9, 2019. The Company will be listed on the CSE subject to the conditions enumerated in this letter.

For further information, please contact Steve Kappella, Chief Executive Officer of the Company, at info@silk‐

The CSE has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Forward Looking Information

This press release contains forward‐looking statements based on assumptions, uncertainties and management’s best estimates of future events. These forward-looking statements include, but are not limited to, statements with respect to the Company’s application for listing on the CSE, completion of the acquisition of UnionField, and the Kazakh approval associated therewith, the Company’s oil and gas exploration activities in Kazakhstan and its proposed financing activities. Actual results may differ materially from those currently anticipated. Investors are cautioned that such forward‐looking statements involve risks and uncertainties. Important factors that could cause actual results to differ materially from those expressed or implied by such forward‐looking statements include, but are not limited to, the Company’s inability to obtain financing on reasonable terms, or at all, the Company’s inability to satisfy the CSE’s listing conditions, or not obtaining the required government approval and permitting for exploration activities in Kazakhstan. The Company has no intention to update or revise any forward‐looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable law.

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