Canstar Closes Final $1.5 Million Tranche Toronto, Ontario - TheNewswire - October 1, 2020 - CANSTAR RESOURCES INC. (TSXV:ROX) (" Canstar Resources " or the " Company ") is pleased to announce that it has closed the second and final tranche (the " Second Tranche ") of the non-brokered private placement announced on September 2, 2020 (the " Offering ").
The Second Tranche consisted of the sale of 9,523,810 units (" Units ") at a price of $0.1575 per Unit for aggregate gross proceeds of $1,500,000. Each unit is composed of one (1) common share (" Share ") in the capital of the company and one (1) Share purchase warrant (" Warrant ") at an exercise price of $0.21 per Warrant for a period of two years from the date of issuance.
The first tranche of the Offering, which closed on September 15, 200, consisted of the sale of 4,761,920 units (each a "Part & Parcel Unit") at a price of $0.105 per Part & Parcel Unit for gross proceeds of $500,001.60. Each Part & Parcel Unit was composed of one (1) Share and one (1) Warrant.
The Company intends to use the net proceeds raised from the Second Tranche for general corporate purposes, working capital, and exploration expenses on the Company's properties in Newfoundland, including Buchan's/Mary March, Daniel's Harbour, and Golden Baie.
Frances Kwong, Dustin Small, and Christian Kargl-Simard, directors and/or officers of an insider of the Company acquired an aggregate of 385,700 Units in the Second Tranche of the Offering for aggregate proceeds of approximately $60,747.75, which participation constituted a "related party transaction" as defined under Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (" MI 61-10 1"). Such participation is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as neither the fair market value of the Part & Parcel Units acquired by the insiders, nor the consideration for the Part & Parcel Units paid by such insiders, exceed 25% of the Company's market capitalization.
In connection with the closing of the Second Tranche, the Company paid finder fees to eligible finders of an aggregate of $14,175.00 and 90,000 warrants to purchase Units at a price of $0.1575 per Unit. All securities issued and issuable pursuant to the Offering are subject to the applicable statutory hold period of four months and one day from the closing. The Offering is subject to the final approval of the TSX Venture Exchange.
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 and Labrador, Canada. Canstar is in the process of completing an option agreement to acquire a 100% interest in the Golden Baie Project in south Newfoundland, a large claim package (660 km 2 ) with recently discovered, multiple outcropping gold occurrences. The Company also holds the Buchans-Mary March project and other mineral exploration properties in Newfoundland. Canstar Resources is based in Toronto, Canada and is listed on the TSX Venture Exchange and trades under the symbol ROX-V.