Cancana completes $385,000 private placement

2012-05-03 10:09 PT - News Release
Shares issued 16,409,953
CNY Close 2012-05-02 C$ 0.25

Dr. William Pfaffenberger reports

CANCANA CLOSES ON PRIVATE PLACEMENT

Cancana Resources Corp.'s non-brokered private placement of units, at 50 cents per unit, which was previously announced on March 29, 2012, has now been submitted to the TSX Venture Exchange for final approval.

The Offering consisted of a total of 770,000 Units for a gross amount of CDN$385,000.00, each Unit consists of one (1) common share and one (1) non-transferable share purchase Warrant. Each Warrant is exercisable into one additional common share at $0.75 per share for 24 months from the date of Closing of the Private Placement. A finder's fee will to be payable in accordance with the policies of the TSXV.

Cancana intends to use the proceeds from the Offering for continuation of the development of its properties and general working capital.

Pursuant to Policy 5.9 of the TSXV and Multilateral Instrument 61-101 ("MI 61-101"), the private placement may be classified as a "related party transaction" as certain directors and officers of the Corporation (the "Related Parties") are subscribing for common shares. In reviewing the applicable valuation requirements under MI 61-101, the Corporation has determined that the exemption set out in subsections (a) and (b) in section 5.5 of MI 61-101 are applicable since the aggregate consideration to be paid by the Related Party does not exceed 25% of the market capitalization of the Corporation as at the date hereof and the Corporation is only listed on the TSXV and is not listed or quoted on any of the specified markets listed in subsection 5.5(b). In addition, in reviewing the minority shareholder approval exemptions, the independent directors determined that the exemption set out in subsections (a) and (b) in section 5.7 of MI 61-101 is applicable.

The securities issued pursuant to the Offering are subject to a hold period expiring four (4) months and one day from the date that the TSXV issues its final bulletin.

We seek Safe Harbor.