Contact Exploration increases financing to $6.5-million

Aug 1, 2013

CONTACT ANNOUNCES INCREASE TO PREVIOUSLY ANNOUNCED PRIVATE PLACEMENT

Due to demand from potential investors, Contact Exploration Inc. has increased the size of its previously announced brokered private placement, to be conducted on a commercially reasonable best efforts agency basis through a syndicate of agents led by Integral Wealth Securities Ltd. and including Dundee Securities Corp., MGI Securities Inc. and Beacon Securities Ltd., of common shares of the company and shares to be issued on a flow-through basis pursuant to the Income Tax Act (Canada).

Specifically, Contact has agreed to increase the number of shares to up to 14,009,616 shares (from 12.5 million shares) at an issue price of 26 cents per share and to increase the number of flow-through shares to up to 9,525,000 flow-through shares (from 5,833,334 flow-through shares) at an issue price of 30 cents per flow-through shares for aggregate gross proceeds of up to $6,500,000.16. As a result of the increased size of the private placement, the agents and Contact have agreed to terminate the previously contemplated agents’ option. The private placement is expected to close on or about Aug. 8, 2013.

Proceeds from the private placement will be used to finance the company’s drilling and operational activity in the East Kakwa Montney project area in the Deep basin in Alberta and for general corporate purposes. In particular, Contact will incur eligible Canadian exploration expenses (within the meaning of the Income Tax Act (Canada)), in an amount equal to the aggregate subscription price for the flow-through shares, by Dec. 31, 2014, and renounce such expenses to purchasers of flow-through shares effective Dec. 31, 2013.

All securities issued pursuant to the private placement will be subject to a four-month hold period from the closing date. The private placement is subject to approval of the TSX Venture Exchange.

We seek Safe Harbor.

http://www.contactexp.com/Press_Release.html