Sunshine Oilsands Ltd. is committed to providing our investors and the public with timely and accurate information regarding our business and operating activies.
August 16, 2021


his announcement is made by the board of directors (the “Board”) of Sunshine Oilsands Ltd. (the “Corporation”, together with its subsidiaries, the “Group”) on a voluntary basis. This announcement is to provide the shareholders and other potential investors of the Corporation with the information on the latest business development of the Group.


The Corporation has announced a temporary suspension of production for 90 days on March 31, 2020 owing to the volatility in the international crude oil market, severe decline in crude oil prices, and having considered the fact that the Corporation’s production equipment and road need repair, coupled with the outbreak of COVID-19 in Canada.  The initial period of 90 days was an estimate made back then with a view that (i) the curing of the pandemic and recovery of oil price would happen fairly quickly and (ii) the repair work can be completed during 2020 summer.  Since then, the above external factors continued to be in effect, causing deferral of the Corporation’s plan for resumption, such factors/events include:

  1. COVID-19 continued to spread and resurged a few times in Canada and the Alberta/Calgary government has declared state of local emergency from March 2020 to June 2020, November 2020 to March 2021, and recently again in May 2021 to June




2021. Various measures were imposed including city lockdown, isolation requirements, people are required to work from home (in effect people in Alberta has been working from home since March 2020 as it has been a recommended practice by the government even when the state of local emergency was lifted in between periods), etc.  Though the Alberta/Calgary government uplifted the state of local emergency in March 2021, most people in Alberta in fact has been working from home since March 2020 until now as it was highly recommended practice by the government to work from home and to keep social isolation even when the state of local emergency has been uplifted.   Therefore, one major impact is that many of the repair related service vendors have not restarted or fully resumed their service activities and service orders backlog have piled up.  As such the Company was not able to draw up repair and production resumption plan yet. 

On the other hand, the Corporation’s project site is located in a remote area and members of the operation team are from different provinces areas. The production operation requires a full team working on shift to maintain 24/7 continuous operations. Therefore, at any time if a small number of employees in the team needs to work from home or any of the Corporation’s supplier failure to deliver supplies needed for the operation as they have not resumed full operation, the production operations and resumption plan will be affected.


  1. International oil price has not recovered to pre-COVID-19 price level until December 2020 and only stabilized at a sustainable price level in 1Q2021.  


  2. The snowy bad weather during winter in 2020/2021 has eventually caused the Corporation’s road more muddy and difficult to repair.  Due to the extreme poor weather condition in Calgary in 2020/2021, the road surrounding the Corporation’s operation site has deteriorated seriously so that trucking transportation was obstructed.


  3. Without the road being properly repaired, many service providers for equipment repair were not willing to travel to site.  Note that most repair work needs to be carried before winter whereby 24/7 continuous heating of equipment may not be required and the road is not covered by snow or frost. 


  4. Some of the Corporation’s production equipment including pumps have broken down.  Other equipment e.g. turbines have already been running towards the end of their economic life, and frequently trips as it run and therefore cannot operate continuously. 



Regarding the suspension, the production activities have been suspended whilst workforce arrangement and maintenance of facilities remained operating.  Commercial liaison with potential customers remained active.  As discussed in our last reply letter, while waiting for the resumption plan to kick off, the management has been diligently (i) getting updates with service providers for their availabilities and discussing possible steps for repair; and (ii) introducing measures to further reduce cost so that when the operation resumes, the Corporation is in a better profitability and cashflow profile.  These include e.g. negotiation with new customers nearby the site so that transportation costs can be reduced, implementation of process improvement to reduce energy consumption, etc.



Based on the management’s assessment, with the increasing community vaccination, most of the restrictive measures shall be uplifted in August-September 2021 and most service vendors shall resume normal operations thereafter, in that case, based on the best estimate, the resumption timetable shall be as follows:-

Steps / Items that need to be performed

Estimated time / period

Road repair

6 September 2021 – 24 September 2021

Equipment repair

1 October 2021 – 31 October 2021

Preparation work before inspection by government regulatory body e.g. equipment cleaning

4 October 2021 – 18 October 2021

Inspection by governmental regulatory body and certification

20 October 2021 – 10 November 2021


11 November 2021 – 5 December 2021

Steaming of the ground

5 December 2021 – 5 January 2022


The operation team is now actively liaising with service vendors as in when they will be able to assist with repair work, equipment cleaning, trucking, etc. so that when the government uplifts the restrictive measures in relation to COVID-19 in August/September 2021, the service vendors will be ready and the Corporation can kick-off with the plan for resumption.



In terms of financial impact, management estimate that revenue will remain at a low level for 2021.  However, net loss position has in fact been improved when compared to the period before the temporary production suspension, due to the fact that oil price has fallen to historical low level when oil demand severely declined due to COVID-19 and the market was shocked. 


Regarding the impairment of assets, the Corporation has recorded an impairment of its assets for 2019.  For 2021, the management has yet to performed its annual impairment assessment in order to ascertain whether further impairment is required.  However, based on the current oil price level, and that the Corporations level of reserves have not significantly changed, it is anticipated that there should not be any significant level of asset impairment for FY2021.



Currently, the Corporation has no inventory available for sale.  Management expects that it will start recording revenue again once its production resumes


By Order of the Board of Sunshine Oilsands Ltd.

Kwok Ping Sun
Executive Chairman



Hong Kong, August 16, 2021

Calgary, August 16, 2021


As at the date of this announcement, the Board consists of Mr. Kwok Ping Sun and Ms. Gloria Pui Yun Ho as executive directors; Mr. Michael John Hibberd, Ms. Linna Liu and Ms. Xijuan Jiang as non-executive directors; and Mr. Yi He, Mr. Alfa Li and Mr. Guangzhong Xing as independent non-executive directors.


About Sunshine Oilsands Ltd.

The Corporation is a Calgary based public corporation, listed on the Hong Kong Stock Exchange since May 1, 2012. The Corporation is focused on the development of its significant holdings of oil sands and heavy oil leases in the Athabasca oil sands region. The Corporation owns interests in oil sands and petroleum and natural gas leases in the Athabasca region of Alberta. The Corporation is currently focused on executing milestone undertakings in the West Ells project area. West Ells Phase 1 has an initial production target of 5,000 barrels per day.

For further enquiries, please contact:

Kwok Ping Sun

Executive Chairman


Tel: + 852-3188-9298

Email: [email protected]