Canstar Resources Inc. Announces Closing of Second and Final Tranche of Non-Brokered Private Placement

Canstar Resources Inc. Announces Closing of Second and Final Tranche of Non-Brokered Private Placement

Toronto, Ontario - December 30, 2015. Further to its news release dated December 23, 2015, Canstar Resources Inc. (“Canstar” or the “Company”, TSX.V: ROX) is pleased to announce the closing of a second and final tranche of a non-brokered private placement financing (the “Offering”) previously announced on December 9, 2015. The Company issued 570,000 flow-through units (the “Units”) at $0.06 per Unit for gross proceeds of $34,200.

Each Unit consisted of one common share issued on a flow-through basis and one common share purchase warrant. Each warrant entitles the holder to purchase one common share of the Company for a period of 24 months after closing of the Offering at a price of $0.10 in the first year after closing of the Offering, and $0.175 in the second year after closing of the Offering if the holder so elects. When the closing price on the TSXV of the shares equals or exceeds Cdn. $0.175 per share in the first year after closing of the Offering, or Cdn. $0.25 per share in the second year after closing of the Offering, for a period of 20 consecutive trading days, the Company has the right to accelerate the expiry date of the Warrants. To exercise this right, within 30 days of the occurrence of an acceleration event, the Company must give written notice to the holder by ordinary prepaid mail, in which case the expiry date of the Warrants is accelerated to the date that is 30 calendar days from the date of mailing at 4:00 pm Toronto time.

In connection with the closing of the Offering, a 5% finder’s fee was paid in cash to an eligible finder and 29,600 finder’s warrants (“Finder’s Warrants”) were issued equal to 8% of the number of Units placed by the eligible finder pursuant to the Offering. Each Finder’s Warrant entitles the holder to acquire one Unit for $0.06 until December 30, 2017.

All securities issued with respect to the Offering are subject to a hold period which expires four months and one day after closing.

The proceeds of the private placement will be used for exploration on the Company’s 100%-owned Kenora Gold Project (Ontario) and will follow up on recent encouraging results that indicate the potential for an extensive gold system within the property (see News Release dated December 3, 2015). Further exploration on the Mary March and Nancy April Projects in Newfoundland is under review given current low level of base metal prices.

One Director of Canstar acquired 200,000 Units in the Offering for gross proceeds of $12,000. The participation in the private placement by such director who is “related party” of the Company 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”). In accordance with MI 61-101, in the absence of exemptions, the Company is required to obtain a formal valuation for, and minority shareholder approval of, the “related party transaction”. The Company is relying on the exemptions from the formal valuation and minority approval requirements of MI 61-101 pursuant to which a formal valuation and minority approval are not required in the event that at the time the transaction is agreed to, neither the fair market value of the subject matter of, nor the fair market value of the consideration for, the transaction, insofar as it involves interested parties, exceeds 25% of the Company’s market capitalization. The participation by each of the related parties in the private placement was approved directors of the Company who are independent of that related party.

On behalf of the Board of Directors,

Danniel J. Oosterman, P.Geo
President & CEO

Danniel J. Oosterman, P. Geo.
President & CEO

Karen Willoughby
Director Corporate Communications
T: 1-866-936-6766

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 News Release. This News Release includes certain “forward-looking statements”. These statements are based on information currently available to Canstar, and Canstar provides no assurance that actual results will meet management’s expectations. Forward-looking statements include estimates and statements that describe Canstar’s future plans, objectives or goals, including words to the effect that Canstar 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”. Forward-looking statements are based on Canstar’s assumptions regarding, among other things, results of exploration, project development, reclamation and capital costs of Canstar’s mineral properties, capital markets activities, and Canstar’s financial condition and prospects. As these statements address future events and conditions, by their very nature they involve inherent risks and uncertainties, and so Canstar’s actual results could differ materially from those currently anticipated in such statements for many reasons such as: changes in general economic conditions and conditions in the financial markets; changes in demand and prices for minerals; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; technological and operational difficulties encountered in connection with Canstar’s activities; and other matters discussed in this News Release. This list is not exhaustive of the factors that may affect any of Canstar’s forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on Canstar’s forward-looking statements. Canstar does not undertake to update any forward-looking statement that may be made from time to time by it or on its behalf, except in accordance with applicable securities laws.

Subscribe to our Email List