CANSTAR RESOURCES INC. (TSXV: ROX) (“
Canstar
Resources” or the “
Company”) announces
that, further to its press release dated August 26, 2020, it is
amending the terms (the “
Amendment”) of its
proposed non-brokered private placement for aggregate gross
proceeds of up to $2,000,000 (the “
Offering”).
Pursuant to the Amendment, Canstar Resources
intends to complete the Offering in two tranches. The first tranche
will consist of the sale of up to 4,761,905 units (“Part
& Parcel Units”) at a price of $0.105 per Part &
Parcel Unit, for gross proceeds of up to $500,000. Each Part &
Parcel Unit will be comprised of one common share in the equity of
the Company (each, a “Common Share”) and one
Common Share purchase warrant (each, a “Part & Parcel
Warrant”). Each Part & Parcel Warrant will entitle the
subscriber to purchase one additional Common Share at a price of
$0.14 until the second (2nd) anniversary of the closing date of the
Offering.
The second tranche will consist of the sale of
up to 9,523,810 units (“Regular Units”) at a price
of $0.1575 per Regular Unit, for gross proceeds of up to
$1,500,000. Each Regular Unit will be comprised of one Common Share
and one Common Share purchase warrant (each, a “Regular
Warrant”). Each Regular Warrant will entitle the
subscriber to purchase one additional Common Share at a price of
$0.21 until the second (2nd) anniversary of the closing date of the
Offering.
The Company intends to use the net proceeds
raised from the Offering for general corporate purposes, working
capital, and exploration expenses on the Company’s properties,
including Buchan’s/Mary March, Daniel’s Harbour, and Golden Baie.
In particular, the proceeds from the sale of Part & Parcel
Units will be used to fund the exploration expenditure commitment
on the Golden Baie project, subject to the approval of the TSX
Venture Exchange and the closing of this transaction as announced
on August 26, 2020.
The Company may pay finder's fees in respect to
the Offering. Closing of the Offering is expected on or about
September 15, 2020. The Offering is subject to the final approval
of the TSX Venture Exchange. Securities issued pursuant to the
Offering shall be subject to a four-month plus one day hold period
commencing on the day of the closing of the Offering under
applicable Canadian securities laws.
It is expected that certain directors, officers
and other insiders of the Company (collectively, the
“Insiders”) will participate in the Offering. The
participation of Insiders in the Offering constitutes a “related
party transaction”, as such terms are defined by Multilateral
Instrument 61-101 - Protection of Minority Security Holders in
Special Transactions (“MI 61-101”). The Company is
relying on an exemption from the formal valuation requirements of
MI 61-101 available on the basis of the securities of the Company
not being listed on specified markets, including the Toronto Stock
Exchange, the New York Stock Exchange, the American Stock Exchange,
the NASDAQ or certain overseas stock exchanges. The Company is also
relying on the exemption from minority shareholder approval
requirements under MI 61-101 as the fair market value of the
participation in the Offering by the Insiders does not exceed 25%
of the market capitalization of the Company.
The securities offered have not been registered
under the U.S. Securities Act of 1933, as amended, and may not be
offered or sold in the United States absent registration or an
applicable exemption from the registration requirements. This press
release shall not constitute an offer to sell or the solicitation
of an offer to buy nor shall there be any sale of the securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful.
About Canstar Resources
Inc.
Canstar Resources is a mineral exploration and
development company focused on creating shareholder value through
discovery and development of economic mineral deposits in
Newfoundland, Canada. Canstar is in the process of completing
option agreements on the Golden Baie Project in south Newfoundland,
a large claim package (660 km2) with recently discovered, multiple
outcropping gold occurrences. The Company also holds the
Buchans-Mary March project and other mineral exploration properties
in Newfoundland and Labrador, Canada. Canstar Resources is based in
Toronto, Canada and is listed on the TSX Venture Exchange and
trades under the symbol ROX-V.
For further information, please contact:
Dennis H. PetersonChairman of the Board, Interim
President and Chief Executive OfficerEmail:
info@canstarresources.comwww.canstarresources.com
Forward-Looking Statements
Neither 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 release. This News Release includes certain
"forward-looking statements" which are not comprised of historical
facts. Forward-looking statements include estimates and statements
that describe the Company’s future plans, objectives or goals,
including words to the effect that the Company or management
expects a stated condition or result to occur. Forward-looking
statements may be identified by such terms as “believes”,
“anticipates”, “expects”, “estimates”, “may”, “could”, “would”,
“will”, or “plan”. Since forward-looking statements are based on
assumptions and address future events and conditions, by their very
nature they involve inherent risks and uncertainties. Although
these statements are based on information currently available to
the Company, the Company provides no assurance that actual results
will meet management’s expectations. Risks, uncertainties and other
factors involved with forward-looking information could cause
actual events, results, performance, prospects and opportunities to
differ materially from those expressed or implied by such
forward-looking information. Forward looking information in this
news release includes, but is not limited to, the Company’s
objectives, goals or future plans, statements, exploration results,
potential mineralization, the estimation of mineral resources,
exploration and mine development plans, timing of the commencement
of operations and estimates of market conditions, as well as the
anticipated size of the Offering, the Offering price, the
anticipated closing date and the completion of the Offering, the
anticipated use of the net proceeds from the Offering, the closing
of the Golden Baie property transaction on the terms as announced
or at all, and the receipt of all necessary approvals. Factors that
could cause actual results to differ materially from such
forward-looking information include, but are not limited to failure
to identify mineral resources, failure to convert estimated mineral
resources to reserves, the inability to complete a feasibility
study which recommends a production decision, the preliminary
nature of metallurgical test results, delays in obtaining or
failures to obtain required governmental, environmental or other
project approvals, political risks, inability to fulfill the duty
to accommodate First Nations and other indigenous peoples,
uncertainties relating to the availability and costs of financing
needed in the future, changes in equity markets, inflation, changes
in exchange rates, fluctuations in commodity prices, delays in the
development of projects, capital and operating costs varying
significantly from estimates and the other risks involved in the
mineral exploration and development industry, an inability to
complete the Offering on the terms or on the timeline as announced
or at all, an inability to predict and counteract the effects of
COVID-19 on the business of the Company, including but not limited
to the effects of COVID-19 on the price of commodities, capital
market conditions, restriction on labour and international travel
and supply chains, and those risks set out in the Company’s public
documents filed on SEDAR. Although the Company believes that the
assumptions and factors used in preparing the forward-looking
information in this news release are reasonable, undue reliance
should not be placed on such information, which only applies 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. The
Company disclaims any intention or obligation to update or revise
any forward-looking information, whether as a result of new
information, future events or otherwise, other than as required by
law.
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