RE:Up huge in US exchange News was out Friday, Eric Sprott bought more, looks like he has more than 20% of the company, maybe that's why we are up today in the US.
Toronto, Ontario – May 21, 2021 – CANSTAR RESOURCES INC. (TSXV:ROX & OTCPK: CSRNF)(“Canstar” or the “Company”) is pleased to announce that it has completed its previously announced non-brokered private placement, consisting of the sale of 13,157,895 units (each a “Unit”) at a price of $0.19 per Unit for aggregate gross proceeds of $2,500,000.05 (the “Offering”). Each Unit consists of one common share in the equity of the Company (each, a “Common Share”) and one share purchase warrant (each, a “Warrant”). Each Warrant will entitle the subscriber to purchase one additional Common Share at a price of $0.25 until the second (2nd) anniversary of the closing date of the Offering (the “Expiry Date”).
Mr. Eric Sprott through 2176423 Ontario Ltd. (“2176423”), a corporation which is beneficially owned by him, acquired 10,527,000 Units pursuant to the Offering. As a result, Mr. Sprott beneficially owns and controls 10,527,000 Shares of the Company and 10,527,000 Warrants representing 12.3% of the issued and outstanding Common Shares on a non-diluted basis, and 21.9% on a partially diluted basis, assuming the exercise of Mr. Sprott’s share purchase warrants. Prior to the closing of the Offering, Mr. Sprott did not beneficially own or control any securities of the Company. Mr. Sprott has signed an undertaking not to exercise his warrants until such time as the Company can obtain disinterested shareholder approval of the creation of a new control person, which is required once Mr. Sprott passes the 20% ownership threshold. The Company has agreed to hold a shareholders’ special meeting on or before November 30, 2021, at which time such approval will be sought.
The Units were acquired by Mr. Sprott, through 2176423, for investment purposes. Mr. Sprott has a long-term view of the investment and may acquire additional securities of the Company including on the open market or through private acquisitions or sell securities of the Company including on the open market or through private dispositions in the future depending on market conditions, reformulation of plans and/or other relevant factors.
A copy of 2176423’s early warning report will appear on the Company’s profile on SEDAR and may also be obtained by calling 416-945-3294 (200 Bay Street, Suite 2600, Royal Bank Plaza, South Tower, Toronto, Ontario M5J 2J1).
Rob Bruggeman, President & CEO of Canstar, commented: “We welcome Mr. Sprott as a significant shareholder of Canstar. Mr. Sprott’s investment is a strong endorsement of Canstar’s technical team and the exploration potential on its Golden Baie Project in southern Newfoundland.”
The proceeds from the Offering will be used for exploration on the Company’s Golden Baie Project and other mineral exploration properties in Newfoundland and general working capital purposes.
The Offering is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the TSX Venture Exchange and the securities regulatory authorities. All securities issued and issuable in connection with the closing of the Offering are subject to a four-month-and one-day statutory hold period in accordance with applicable securities laws.
Certain directors, officers, and other insiders (collectively, the “Insiders”) of Canstar subscribed in the Offering for an aggregate of 913,895 Units and the participation of the Insiders in the Offering constitutes a “related party transaction” within the meaning of 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 and minority shareholder approval requirements of MI 61-101 pursuant to section 5.5(a) and section 5.7(1)(a), as the fair market value of the officers’ and directors’ participation is not more than 25% of the Company’s market capitalization.
The securities offered in the Offering have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any U.S. state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of, United States persons, absent registration or any applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This news release does not constitute an offer to sell or the solicitation of any offer to buy securities in the United States, nor in any other jurisdiction.