Canadian Premium Sand Completes Non-Brokered Private Placement of Secured Convertible Debentures

Canadian Premium Sand Inc.

(“

CPS

” or the “

Company

”) (TSXV: CPS) is pleased to announce that it has completed its previously announced non-brokered private placement (the "

Offering

") of secured convertible debentures (the "

Convertible

Debentures

"). Pursuant to the Offering, the Company accepted subscriptions for Debentures totaling approximately $2 million. 

The net proceeds of the Offering will be used for the continued development of the Company's Wanipigow Sand Resource and for general working capital purposes.

The Convertible Debentures bear interest at a rate of 12% per annum and mature on February 26, 2024 (the "Maturity Date"). The Convertible Debentures and accrued interest thereon are convertible into common shares ("Common Shares"), at the holder's option, at a price of $0.75 per Common Share, subject to adjustment in certain events, at any time prior to the Maturity Date. On or after February 26, 2022 if the daily volume weighted average trading price of the Common Shares is $1.20 per Common Share or more for each trading day over a 30 consecutive trading day period, the Company may, at any time and from time to time thereafter (the "Redemption Date"), at its option, redeem all, or any portion of the Convertible Debentures for either: (i) a cash payment that is equal to all outstanding principal and accrued interest under each Convertible Debenture up to the Redemption Date; or (ii) by issuing and delivering Common Shares to the holders of Convertible Debentures at a deemed price of $0.75 per Common Share that is equal to all outstanding principal and accrued interest under each Convertible Debenture up to the Redemption Date, or any combination of (i) or (ii), upon not less than 30 days and not more than 60 days prior written notice to the holder of Convertible Debentures. The Convertible Debentures are a secured obligation of the Company which will rank senior to all present and future indebtedness that is not senior indebtedness which will involve the grant by the Company of a fixed and floating charge over all of its present and after acquired property. If a change of control of the Company occurs prior to the Maturity Date, unless the holder elects in writing to convert the Convertible Debentures into Common Shares, the Company will repay in cash upon the closing of such change of control all outstanding principal and accrued interest under each Convertible Debenture plus a change of control premium equal to an additional 3% of the outstanding principal sum under such Convertible Debenture.

Certain directors of the Company, being Lowell Jackson, John Assman and Glenn Leroux, and each of its two significant shareholders being Paramount Resources Ltd. and David Wilson, directly or indirectly participated in the Offering in the aggregate amount of $1.975 million, thereby making the Offering a "related party transaction" as defined under Multilateral Instrument 61-101 ("MI 61-101"). The Offering is exempt from the need to obtain minority shareholder and a formal valuation as required by MI 61-101 as the Company is listed on the TSX Venture Exchange and at the time the transaction was agreed to the fair market value of the Debentures to insiders or the consideration paid by insiders of the Company did not exceed 25% of the Company's market capitalization. The Company did not file a material change report more than 21 days before the expected closing date of the Offering as the details of the Offering, including the amount to be raised pursuant to the Offering, had not been confirmed at that time and the Company wished to close the Offering on an expedited basis for sound business reasons and in a timeframe consistent with usual market practices for transactions of this nature.

The Offering remains subject to the final acceptance of the TSX Venture Exchange. The Debentures and the Common Shares issuable upon conversion of the Debentures are subject to a statutory hold period expiring on June 27, 2020.

The securities of the Company have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act") or any U.S. state securities laws and may not be offered or sold in the United States absent registration or an available exemption from the registration requirement of the U.S. Securities Act and applicable U.S. state securities laws. 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.

About Canadian Premium Sand Inc.

The Company is an exploration stage company which is developing its Wanipigow Sand Resource in Manitoba, and a reporting issuer in Ontario, Alberta and British Columbia. Its shares trade on the TSX Venture Exchange under the symbol "CPS".

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

CONTACT INFORMATION:           

Canadian Premium Sand Inc. Glenn Leroux President and Chief Executive Officer [e-mail]

Investor [e-mail]

www.canadianpremiumsand.com

Disclaimer for Forward-Looking Information

Certain statements in this press release related to the business prospects of the Company and the Offering and the securities issuable thereunder are forward-looking statements and are prospective in nature. Forward-looking statements are not based on historical facts, but rather on current expectations and projections about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. These statements generally can be identified by the use of forward-looking words such as “may”, “should”, “will”, “could”, “intend”, “estimate”, “plan”, “anticipate”, “expect”, “believe” or “continue”, or the negative thereof or similar variations. Forward-looking statements in this news release include statements regarding the use of proceeds of Offering and receipt of the final approval of the TSX Venture Exchange. Such statements are qualified in their entirety by the inherent risks and uncertainties that the proceeds of the Offering may be used other than as set out in this news release, that the TSX Venture Exchange may not approve the Offering and such other factors beyond the control of the Company. Such forward-looking statements should therefore be construed in light of such factors, and the Company is not under any obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.