ELW

NOT FOR DISTRIBUTION TO UNITED STATES NEW WIRE SERVICES OR DISSEMINATION IN THE
UNITED STATES OF AMERICA 


ELKWATER RESOURCES LTD. (the "Corporation") (TSX VENTURE:ELW) announces that it
intends to enter into a new $4.1 million credit facility (the "Facility") with a
Canadian chartered bank. Under the terms of the Facility, the Corporation will
also raise an additional $1.5 million of financing through a combination of
equity and/or subordinated debt. 


The Corporation intends to undertake a non-brokered private placement equity
financing in each of the provinces of Canada other than Quebec (the "Private
Placement") by issuing up to 5,000,000 common shares (the "Shares") at a price
of $0.05 per Share for proceeds of up to $250,000. Directors and officers of the
Corporation have agreed, subject to certain conditions, to subscribe for up to
approximately $100,000 (or 40%) of the Private Placement. No fees are payable in
connection with such subscriptions. There is no minimum number of Shares that
must be subscribed for under the terms of the Private Placement for the Private
Placement to close. 


The Corporation also intends to undertake a non-brokered private placement debt
financing in each of the provinces of Canada other than Quebec (the "Debenture
Financing") by issuing up to an aggregate principal amount of $1,500,000 of
non-convertible, secured, subordinated debentures ("Debentures") bearing
interest at a rate of 2% plus prime and having a term of 2 years. Directors and
officers of the Corporation have agreed, subject to certain conditions, to
subscribe for up to approximately $800,000 (or 53.33%) of the Debenture
Financing. No fees are payable in connection with such subscriptions. There is
no minimum number of Debentures that must be subscribed for under the terms of
the Debenture Financing for the Debenture Financing to close.


Part the proceeds from the three financings will be used to complete a $625,000
acquisition of oil and gas assets producing approximately 50 boepd (70% gas) and
located in the Lomond and Pembina areas of Alberta. The remainder of the
proceeds will be used for general working capital purposes and to repay existing
indebtedness of the Corporation.


Closings of the proposed Private Placement and the Debenture Financing are
anticipated to occur on or about January 30, 2014 and will be conditional upon,
among other things, the receipt of all necessary regulatory approvals (including
from the TSX Venture Exchange). The Shares issued pursuant to this Private
Placement and the Debentures issued pursuant to the Debenture Financing will be
subject to a four month statutory hold period.


Neither the TSX Venture Exchange Inc. nor its Regulation Services Provider (as
that term is defined in policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.


FOR FURTHER INFORMATION PLEASE CONTACT: 
Elkwater Resources Ltd.
Don J. Brown
President and Chief Executive Officer
(403) 262-0242 ext. 226

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