Sunshine Oilsands Announces Strategic Financial Plans for Second Quarter of 2014

CALGARY, Alberta and HONG KONG, April 6, 2014 /CNW/ - Sunshine Oilsands Ltd. (the "Corporation" or "Sunshine") (HKEX: 2012; TSX: SUO) today announced its strategic financial plans outline for the second quarter of 2014.

Strategic and Financial Plans

Sunshine's activities in examining strategic and financing alternatives remain ongoing. As a priority, the Corporation is actively progressing focused initiatives to secure financing to recommence construction on its first West Ells 10,000 bbl/d commercial Steam Assisted Gravity Drainage ("SAGD") project. Establishing production in the West Ells area is an important initiative that sets the foundation for the long term production plans in the West Ells project area, an area in which the Corporation has estimated that modular phase production increases have the potential to achieve commercial production of approximately 110,000 bbls/d production capacity. Financing initiatives are focused on considering debt and equity-linked alternatives as well as joint ventures, farm-outs, asset sales and sale lease-back transactions. Sunshine is pleased to confirm that it is examining financing alternatives with the assistance of its financial advisors. Sunshine will disclose the details of specific financing initiatives when the Board of Directors approves a specific transaction or otherwise determines that disclosure is required.

The Corporation cautions that there can be no assurances or guarantees that its activities will result in any financing transaction or other transaction or, if such financing or other transaction is undertaken, there can be no assurances or guarantees as to the terms or timing of such a transaction.

In a showing of support for the strategic and financing initiatives, the Board of Directors is pleased to confirm that all Directors of Sunshine have agreed to accept 50% of their Board retainer compensation in the form of shares of the Corporation, and the Co-Chairmen have also agreed to accept 50% of their contract compensation in form of shares of the Corporation. Such compensation, and the number of shares to be issued for previously earned retainer amounts following the end of the current trading black-out period, shall be determined in compliance with the Listing Rules, the rules of the TSX, and shall be subject to approval by the HKEX, the TSX as well as any necessary shareholder approvals.

Blackout Period

The Corporation confirms that it remains in a trading "black-out" for all persons that are subject to the Corporation's Corporate Disclosure and Trading Policy. This "black-out" has been in effect since August 6, 2013 and is expected to continue until current financing initiatives and the strategic alternatives review process is fully completed.

Completed Financings

Since December 1, 2013, Sunshine completed and closed private placements for aggregate gross proceeds totaling HK$489.7 million (approximately CAD$68.7 million). The proceeds enabled the Corporation to repay vendors 45% of the amount owed when West Ells activities were suspended. All vendors, which include litigants, first lien holders and general creditors, were paid the same proportion of outstanding invoices. As disclosed in the results announcement of Sunshine dated March 26,2014 and the most recent Annual Information Form ("AIF), Sunshine, with unanimous agreement from current lien holders and litigants, reached a collective forbearance agreement with all lien holders and litigants initially until February 28, 2014. This forbearance period was subsequently extended by collective agreement with all lien holders and litigants until May 31, 2014. With cooperation from key vendors, the Corporation is actively moving forward with planning for recommencing construction at the West Ells 10,000 bbl/d commercial SAGD project area.

Special General Meeting to be held on April 15, 2014

In an initiative aimed at facilitating commitment and closing of additional equity or equity-linked financings, a Special General Meeting of shareholders is to be held on April 15, 2014. Shareholders are being asked to refresh the 20% equity issuance mandate to allow Sunshine to allot and issue Shares up to a maximum of twenty percent (20%) of its aggregate issued and outstanding share capital.

The Go-Forward Plan

Once financing is secured, it is Sunshine's intention to move rapidly, using the experienced engineering, field operations and drilling and completions teams, to recommence construction at West Ells, with the goal of achieving first steam late in 2014. The corporation has retained high performing staff in all key areas required to support construction recommencement. The staff count is approximately 120 employees and consultants that meet the desired performance standards and includes staffing in all key operations, support roles and in commissioning and startup functions related to West Ells. The Corporation is determined to ensure that we leave no room for future excuses about cost controls and operations metrics since we intend to establish a strong base-line for long term, sustainable production growth and cash flow as we complete the West Ells project and become a producing energy company.

Comments from the Co-Chairmen, Mr. Michael Hibberd and Mr. Songning Shen

"We have gone through a determined and intense effort to address internal management leadership matters. In view of the challenges we have faced, we are hugely impressed by the manner in which those challenges have been examined and addressed by our Board of Directors and our staff. Our new management team has made changes to our internal cost controls and capital allocations processes aimed at ensuring that go-forward budget and capital management requirements for 2014 are addressed in a rigorous manner. We already have, and remain committed to retaining, highly skilled financial management and technical teams with a track record of 'on time, on budget' project delivery. After financing initiatives are completed, the Board of Directors intends to appoint a full-time Chief Financial Officer to assume the CFO functions and the Board of Directors will formally address assignment of permanent key leadership titles. We can assure all of our shareholders that the Board of Directors remains fully committed to addressing the interests of our shareholders. This, combined with the commitment by our highly skilled management and technical teams and the support shown by our vendors and contractors, sets the backbone for our determination to push the West Ells project forward."

This press release is not an offer of the Common Shares for sale in the United States. The Common Shares have not been, and will not be, registered under the United States Securities Act of 1933, as amended and may not be offered or sold in the United States absent registration or an exemption from the registration requirements thereof. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful.

FORWARD-LOOKING INFORMATION AND DISCLAIMER

This announcement contains forward-looking information relating to, among other things: (a) the future financial performance and objectives of Sunshine; and (b) 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 Sunshine's experience, current beliefs, assumptions, information and perception of historical trends available to Sunshine, 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 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 Sunshine 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 our actual results may differ materially from those expressed or implied. Sunshine disclaims any intention 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 our material risk factors, see "Risk Factors" in the AIF, "Risk Management" in our current MD&A for the year ended December 31, 2013 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 our website at www.sunshineoilsands.com.

In addition, information and statements in this announcement relating to "reserves" and "resources" are deemed to be forward-looking information, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves and resources described exist in the quantities predicted or estimated, and that the reserves and resources described can be profitably produced in the future. The assumptions relating to Sunshine's reserves and resources are contained in the reports of GLJ Petroleum Consultants Ltd. and DeGolyer and MacNaughton Canada Limited, each dated effective December 31, 2013. For additional information regarding the specific contingencies which prevent the classification of Sunshine's contingent resources as reserves see "Statement of Reserves Data and Other Oil and Gas information" in our most recent AIF. The estimates of reserves and future net revenue for individual properties in this announcement may not reflect the same confidence level as estimates of reserves and future net revenue for all properties, due to the effects of aggregation. "Contingent Resources" has the meaning given to that term in the AIF.

About Sunshine Oilsands Ltd.

Sunshine is a Calgary based public company, listed on the SEHK since March 1, 2012 and the Toronto Stock Exchange since November 16, 2012. Sunshine 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 P&NG 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 rate of 5,000 barrels per day, which will be followed immediately by an approved expansion to a planned production capacity of 10,000 barrels per day. In addition to West Ells activities, Sunshine has received regulatory approval to the Thickwood 10,000 barrels per day SAGD project and has an additional 10,000 barrels per day application in regulatory review for Legend.

SOURCE Sunshine Oilsands Ltd.