Eureka offers warrant holders incentive to excercise

VANCOUVER, Dec. 31, 2015 /CNW/ - Eureka Resources Inc. ("Eureka" or the "Company") (TSXV: EUK) announced today that it will offer holders of 4,000,000 warrants previously issued June 11, 2015 (the "June Warrants") an incentive warrant to exercise their warrants early.  Each June Warrant is exercisable to purchase one common share at $0.05 until June 11, 2016, and at $0.10 from June 12, 2016 until June 11 2017.  The Company will issue to a holder of a June Warrant who exercises their June Warrants between January 4, 2016 and January 29, 2016 an incentive warrant (an "Incentive Warrant") for each June Warrant exercised. Each Incentive Warrant will entitle the holder to acquire an additional common share at a price of $0.075 per share for a period expiring June 10, 2016, and thereafter at $0.125 per share until June 10, 2020.

The proceeds from the early exercise of the June Warrants will be used for general working capital, for exploration on the Company's Frasergold property and for investigation of other potential properties.

If a holder does not exercise the outstanding warrants before January 16, 2016 (or only partially exercises them), the outstanding warrants (or the portion not exercised) shall continue to be exercisable to purchase only common shares of the Company at $0.05 per share until June 11, 2016, then at $0.10 per share until June 11, 2017. The Incentive Warrants and any common shares issued upon the exercise of the Incentive Warrants will be subject to hold period expiring four months after the date of distribution of the Incentive Warrants.

Directors and officers of the Company own an aggregate 1,100,000 outstanding warrants subject to the program.  The participation in the incentive program by, and issuance of the Incentive Warrants to, such directors and officers constitutes a "related party transaction" under TSX Venture Exchange Policy 5.9. However, the warrant exercise incentive program is exempt from the formal valuation and minority shareholder approval requirements of the TSX Venture Exchange Policy as the Company's common shares are listed on the TSX Venture Exchange and, in respect of the minority shareholder approval requirement, neither the fair market value of the additional warrants nor the consideration to be received for the additional warrants exceeds 25% of the Company's market capitalization.

"Eureka wishes to make this offer to its current warrant holders as an incentive for them to receive the benefit of a longer-term warrant, and at the same time provide general working capital for the Company," said Michael Sweatman, President and CEO.

About Eureka

Since its incorporation in 1981, Vancouver-based Eureka Resources Inc. has focused on the exploration and development of natural resource properties. Its flagship project, the Frasergold Project, was the subject of a National Instrument 43-101 ("NI 43-101") compliant technical report, entitled "NI 43-101 Technical Report Frasergold Exploration Project", dated July 20, 2015 and amended July 27, 2015, authored by K. V. Campbell, Ph.D, P.Geo, and G. H. Giroux, MA.Sc, P.Eng., and filed on SEDAR. The Frasergold Project is located 100 kilometres east of Williams Lake, B.C., with good summer/fall access by provincial highways and secondary roads.

The Company continues to review options for financing exploration at Frasergold as well as reviewing opportunities for diversification into other commodities as the market appetitive for gold exploration  projects remains a challenge.

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 news release.

Cautionary Statement Regarding Forward-Looking Information

This news release includes certain "forward-looking statements" under applicable Canadian securities legislation that are not historical facts. Forward-looking statements involve risks, uncertainties, and other factors that could cause actual results, performance, prospects, and opportunities to differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements in this news release include, but are not limited to, statements with respect to the Company's proposed financings, objectives, goals or future exploration plans at the Frasergold Project, and the business and operations of the Company. Forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties and other factors which may cause actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic and social uncertainties; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; delay or failure to receive board, shareholder or regulatory approvals; those additional risks set out in the Company's public documents filed on SEDAR at www.sedar.com; and other matters discussed in this news release. Although the Company believes that the assumptions and factors used in preparing the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all.  Except where required by law, the Company disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

SOURCE Eureka Resources Inc.