US Oil Sands Inc. Announces US$7.5 Million Financing and PR Spring Project Update

CALGARY, ALBERTA--(Marketwired - Dec. 2, 2016) - US Oil Sands Inc. ("US Oil Sands" or the "Company") (TSX VENTURE:USO), an innovator of oil extraction technologies, announces an update on corporate liquidity and the PR Spring Project (the "Project") construction, commissioning and start-up costs and timing. In summary, the Company is planning to defer the start-up of the Project until it has closed a US$7.5 million financing (the "Financing") with ACMO S.à R.L. ("ACMO"), the Company's largest shareholder.

With mechanical construction of the Project complete, the Company focused on and has substantially completed commissioning. As a result of liquidity constraints, the Company elected to defer final commissioning steps that would have introduced liquids and solids into the extraction facility, thereby allowing for ease of equipment preservation and lay-up of the facility pending closing of Financing.

In order to preserve working capital, the Company has temporarily laid off most Canadian and U.S. employees, retaining only those essential to close a financing. Certain U.S. employees may also be retained on a part-time or short-term basis to assist in equipment preservation and lay-up of the facility and to maintain basic U.S. operations.

The Company expects to close the Financing in mid to late December and to bring back employees in early January 2017 to complete the last few commissioning procedures that will lead into commercial production.

"This has not been an easy period for all our stakeholders. We have made considerable efforts in sourcing additional capital and ultimately are fortunate to continue to have ACMO provide the Financing" said Cameron Todd, CEO of US Oil Sands. "The decisions we have had to take have not been made lightly as we know they affect many businesses and families. But slightly delaying the Project and completing this Financing is believed to be in the best interest of all concerned, including our shareholders. We are looking forward to making first oil early into 2017 and profitably demonstrating the Company's commercial technology."

OPERATIONAL HIGHLIGHTS

The Company is pleased to report that the Project is mechanically complete and all but final commissioning activities are also complete. The plant's four processing systems: ore handling and conditioning system, extraction, distillation, and utilities systems have all been handed over to operations. The Company's operations team has been working through its 996 step commissioning plan with approximately 35 deferred until completion of the Financing and initiation of start-up procedures. The final commissioning steps involve introduction of liquids and solids into the system which would make equipment preservation and lay-up of the facility much more difficult and costly.