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VANCOUVER, British Columbia--(BUSINESS WIRE)--July 19, 1995--KAP RESOURCES LTD. (VSE: KAR)--KAP Resources Ltd. is pleased to announce that it has entered into an agreement with First Marathon Securities Limited, Wood Gundy Inc., and Bunting Warburg Inc. for the issue and sale on a private placement basis of Special Warrants to raise aggregate proceeds of U.S.$30,000,000, subject to regulatory approval.

17,142,885 Special Warrants will be issued for U.S. $1.75 each.

Each Special Warrant will entitle the holder to receive upon exercise and without any additional payment one common share of KAP and one-half of a share purchase warrant. The share purchase warrants will have a term of five years, and each full share purchase warrant will entitle the holder to acquire one common share of KAP upon payment of U.S.$2.00 per share. Closing of the Special Warrant private placement is scheduled for Aug. 3, 1995.

The proceeds of the Special Warrant private placement will be used primarily to provide the remaining equity required for KAP's nitrate project in Northern Chile. The proceeds of the offering, net of the underwriters' fee, will be held in escrow pending the satisfaction of certain conditions, including the completion of the documentation relating to KAP's U.S.$41,000,000 loan facility and satisfaction of the remaining conditions under that facility, following which KAP will be in a position to make the first draw of the loan. It is expected that funds will be released no later than the end of September, 1995 at which time construction of the project will commence.

The financing marks the last step in putting together KAP's nitrate project. Assuming that construction commences in October, 1995, the project is expected to be in full production in the first six months of 1997.

On behalf of the Board, Theodore J. Roth Director


The Vancouver Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.

CONTACT: Ted Roth, 619/943-0826
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Publication:Business Wire
Date:Jul 19, 1995
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