Canstar Resources Announces $704,000 First Closing of Non-Brokered Private Placement to Explore Mary March and Adjacent Properties
Toronto, Ontario, December 28, 2011 - The directors of Canstar Resources Inc. (Canstar) (TSX.V: ROX) are pleased to announce the closing of the first tranche of the proposed non-brokered private placement financing. On December 13, 2011 the Corporation announced the proposed sale of up to 7,000,000 units at $0.15 per unit for gross proceeds of $1,050,000. Each unit consists of one common share and one common share purchase warrant.
To date the Corporation has closed the sale of 4,693,332 Units for gross proceeds of $704,000. Finders were paid a cash commission of $17,625. A total of 2,000,000 units for gross proceeds of $300,000 were sold on a flow-through basis.
Each whole purchase warrant entitles the holder to acquire one common share at $0.20 for a period of one year after closing (the “Warrant Term”) provided, however, should the closing price of the common shares equal or exceed $0.30 for 20 consecutive trading days following four months and one day after issuance, Canstar may accelerate the Warrant Term to the date which is 30 days following the date a press release is issued by Canstar announcing the reduced Warrant Term.
All securities issued with respect to the offering are subject to a hold period which expires four months after closing.
Proceeds of the financing will be used to fund exploration on the Company’s Mary March property in the Buchans area of Newfoundland and Labrador and working capital. Previous drilling on this property had identified base and precious metals VMS type mineralization including some of the highest grade intersections in the area outside the Buchans mine. Exploration, including drilling and an up to date airborne EM survey over the whole property, is planned early in the New Year.
On behalf of the Board of Directors
Harry J. Hodge, P. Eng.
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. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. This News Release includes certain “forward-looking statements”. All statements other than statements of historical fact, included in this release, including, without limitation, statements regarding potential mineralization and reserves, exploration results and future plans and objectives of Canstar, are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from Canstar’s expectations are exploration risks detailed herein and from time to time in the filings made by Canstar with securities regulators
Harry J. Hodge, P. Eng.
Manager, Corporate Affairs