Canoro Resources Ltd. Announces Private Placement and Underwritten Rights Offering With Strategic Investor

CALGARY, ALBERTA--(Marketwire - April 19, 2010) -


Canoro Resources Ltd. ("Canoro" or the "Company") (TSX VENTURE:CNS) is pleased to announce it has entered into an investment agreement (the "Agreement") with merchant bank Mass Financial Corp (the "Investor" or "Mass") pursuant to which, among other things, the Investor will subscribe for 24,798,000 common shares of the Company ("Common Shares") on a non-brokered private placement basis at a price of $0.13 per share for gross proceeds of approximately $3.22 million (US$3.18 million) (the "Private Placement"). The proceeds of the Private Placement will be used for working capital in conjunction with the exploration and development of the Company's oil and gas projects. Following the Private Placement, Canoro will have 138,811,162 Common Shares issued and outstanding of which the Investor will own approximately 18%. Shares issued to the Investor under the Private Placement will be subject to a four month hold period commencing on the date of issue.

In addition, the Company will conduct a rights offering (the "Rights Offering") by way of short form prospectus pursuant to which each holder of Common Shares will receive one right (the "Right") for each Common Share held, each Right entitling the recipient to acquire one Common Share at a price of $0.10. In connection with the Rights Offering, the Investor has agreed to take up all shares not subscribed for by holders of Rights (the "Standby Commitment") and will receive warrants to purchase an additional number of Common Shares as is equal to 25% of the total Standby Commitment, at a price equal to the exercise price of the Rights and exercisable for a period of six months, subject to Canoro Shareholder approval. Fully subscribed, the Rights Offering would yield total gross proceeds of approximately $13.9 million (US$13.7 million), prior to the exercise of any warrants.

The Agreement further provides, among other things, that (i) the Investor will be entitled to nominate a number of members to the Board of Directors as is equal to its proportional Common Share ownership of the Company; (ii) the Company seek approval of a name change at the next meeting of shareholders; and (iii) the Company obtain a secondary listing for the Common Shares on the NYSE Euronext or the Alternative Investment Market (AIM) of the London Stock Exchange or other mutually agreed European stock exchange. In addition, the Agreement contains a number of customary representations, warranties and conditions and provides for a non-completion fee of US$185,000 plus an additional expense reimbursement of up to US$50,000 in the event that the Private Placement or the Rights Offering fail to complete, other than as a result the actions of the Investor.

In addition the Investor has agreed to provide the Company with a US$35.0 million Senior Convertible Facility (the "Senior Facility"). The Senior Facility will have a two-year term and may be used to fund approved capital expenditures relating to projects in India. The Senior Facility bears interest at the RBC Base Rate plus 3.5% paid quarterly. Drawings under the Senior Facility are convertible into common shares of the Company based on the stock price at the time of drawing. In addition to the Senior Facility, the Investor has agreed to provide the Company with a US$40 million Structured Credit Facility to fund additional projects on terms to be agreed.

In connection with the investment by Mass, the Company will reduce its board of directors to five persons until the next meeting of the shareholders. In the interim, Mass will appoint two directors to the board, Michael J. Smith, Chairman of Mass, and Ravin Prakash, director of Mass. To allow for the changes in the board, Mssrs. John Boyd, Jeff Clarke and Harley Winger have kindly agreed to resign as directors. Mr. Winger will continue as Company Secretary.

The foregoing transactions are subject to TSX Venture Exchange and other approvals.

Strategic Rationale and Corporate Strategy

Canoro believes the principal impediment to realizing the intrinsic value of the Company in its share price is its level of capitalization and the perception by market participants that Canoro does not have the ability to complete its business plan in Amguri and grow beyond. The investment by Mass is expected to provide the Company with the liquidity to aggressively pursue the full development of its assets, particularly the Amguri field, including the drilling of appraisal and development wells. Beyond Amguri field development, Canoro also would have access to sufficient capital to undertake the construction of a liquefied petroleum gas (LPG) plant and a natural gas fired power plant at Amguri, and fund additional projects both on its recently awarded Nagaland PSC and on the Changpang Field rehabilitation when that project is finalized. In addition to acquisitions of new oil and gas projects, Canoro is contemplating further projects in the area of power and infrastructure development.

Mass Financial Corp.

Mass Financial Corp. is a merchant bank actively involved in a broad range of activities related to the integration of banking, trading of commodities and natural resources, financing of commercial trade, and proprietary investing. More information concerning Mass can be found at

Visit the Company's website at

Reader Advisory

This news release contains certain forward-looking statements, which include assumptions with respect to (i) completion of the Private Placement; (ii) completion of the Rights Offering; (iii) completion of the Senior Faciltiy; (iii) successful negotiation of the Senior Structured Facility and receipt of all required regulatory and other approvals; (iv) future capital expenditures; (v) success of operations; (vi) cash flow; and (vii) debt levels. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. All such forward-looking statements involve substantial known and unknown risks and uncertainties, certain of which are beyond Canoro's control. Such risks and uncertainties include, without limitation, risks associated with oil and natural gas exploration, development, exploitation, production, geopolitical risks, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, the impact of general global economic conditions, industry conditions, changes in laws and regulations (including the adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities. Canoro's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do, what benefits, including the amount of proceeds, Canoro will derive therefrom. Readers are cautioned that the foregoing list of factors is not exhaustive. All subsequent forward-looking statements, whether written or oral, attributable to Canoro or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and Canoro does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy and accuracy of the contents of this news release.
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