CSRNF - Canstar Closes $2.5 Million Private Placement with $2.0 Million Lead Order from Eric Sprott
(TheNewswire)
Toronto, Ontario - TheNewswire – May 21, 2021 – CANSTAR RESOURCES INC.(TSXV:ROX ) & ( OTC:CSRNF) (“ Canstar” or the “Company ”) is pleased to announce that it has completed itspreviously announced non-brokered private placement, consisting of thesale of 13,157,895 units (each a “Unit”) at a price of $0.19 perUnit for aggregate gross proceeds of $2,500,000.05 (the“Offering”). Each Unit consists of one common share in the equityof the Company (each, a "Common Share") and one sharepurchase warrant (each, a "Warrant"). Each Warrant willentitle the subscriber to purchase one additional Common Share at aprice of $0.25 until the second (2nd) anniversary of the closing dateof 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 Companyand 10,527,000 Warrants representing 12.3% of the issued andoutstanding Common Shares on a non-diluted basis, and 21.9% on apartially diluted basis, assuming the exercise of Mr. Sprott’s sharepurchase warrants. Prior to the closing of the Offering, Mr. Sprottdid not beneficially own or control any securities of the Company. Mr. Sprott has signed an undertaking not to exercise his warrantsuntil such time as the Company can obtain disinterested shareholderapproval of the creation of a new control person, which is requiredonce Mr. Sprott passes the 20% ownership threshold. The Companyhas agreed to hold a shareholders’ special meeting on or beforeNovember 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 theinvestment and may acquire additional securities of the Companyincluding on the open market or through private acquisitions or sellsecurities of the Company including on the open market or throughprivate 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 appearon the Company's profile on SEDAR and may also be obtained by calling416-945-3294 (200 Bay Street, Suite 2600, Royal Bank Plaza, SouthTower, Toronto, Ontario M5J 2J1).
Rob Bruggeman, President & CEO of Canstar,commented: “We welcome Mr. Sprott as a significant shareholder ofCanstar. Mr. Sprott’s investment is a strong endorsement ofCanstar’s technical team and the exploration potential on its GoldenBaie Project in southern Newfoundland.”
The proceeds from the Offering will be used forexploration on the Company’s Golden Baie Project and other mineralexploration properties in Newfoundland and general working capitalpurposes.
The Offering is subject to certain conditionsincluding, but not limited to, the receipt of all necessary approvalsincluding the approval of the TSX Venture Exchange and the securitiesregulatory authorities. All securities issued and issuable inconnection with the closing of the Offering are subject to afour-month-and one-day statutory hold period in accordance withapplicable securities laws.
Certain directors, officers, and other insiders(collectively, the “Insiders”) of Canstar subscribed in theOffering for an aggregate of 913,895 Units and the participation ofthe Insiders in the Offering constitutes a "related partytransaction" within the meaning of Multilateral Instrument 61-101- Protection of Minority Security Holders in Special Transactions("MI 61-101"). The Company is relyingon an exemption from the formal valuation and minority shareholderapproval requirements of MI 61-101 pursuant to section 5.5(a) andsection 5.7(1)(a), as the fair market value of the officers' anddirectors' participation is not more than 25% of the Company's marketcapitalization.
The securities offered in the Offering have not been,and will not be, registered under the United States Securities Act of1933, as amended (the “U.S. Securities Act”) or any U.S. statesecurities laws, and may not be offered or sold in the United Statesor to, or for the account or benefit of, United States persons, absentregistration or any applicable exemption from the registrationrequirements of the U.S. Securities Act and applicable U.S. statesecurities laws. This news release does not constitute an offer tosell or the solicitation of any offer to buy securities in the UnitedStates, nor in any other jurisdiction.
About Canstar Resources Inc.
Canstar is focused on the discovery and development ofeconomic mineral deposits in Newfoundland and Labrador, Canada.Canstar has an option to acquire a 100% interest in the Golden BaieProject, a large claim package (over 62,175 hectares) with recentlydiscovered, multiple outcropping gold occurrences on a majorstructural trend in south-central Newfoundland. The Company also holdsthe Buchans-Mary March project and other mineral explorationproperties in Newfoundland. Canstar is based in Toronto, Canada, andis listed on the TSXV under the symbol ROX and trades on the OTCPKunder the symbol CSRNF.
For further information, pleasecontact:
Rob Bruggeman P.Eng., CFA
President & CEO
Email: rob@canstarresources.com
Phone: 1-416-884-3556
Forward-Looking Statements
Neither TSX Venture Exchange nor itsRegulation Services Provider (as that term is defined in the policiesof the TSX Venture Exchange) accepts responsibility for the adequacyor accuracy of this release.
This News Release includes certain"forward-looking statements" which are not comprised ofhistorical facts. Forward looking statements include estimates andstatements that describe the Company’s future plans, objectives orgoals, including words to the effect that the Company or managementexpects a stated condition or result to occur. Forward lookingstatements may be identified by such terms as “believes”,“anticipates”, “expects”, “estimates”, “may”,“could”, “would”, “will”, or “plan”. Sinceforward-looking statements are based on assumptions and address futureevents and conditions, by their very nature they involve inherentrisks and uncertainties. Although these statements are based oninformation currently available to the Company, the Company providesno assurance that actual results will meet management’sexpectations. Risks, uncertainties and other factors involved withforward-looking information could cause actual events, results,performance, prospects and opportunities to differ materially fromthose expressed or implied by such forward-looking information.Forward looking information in this news release includes, but is notlimited to, the Company’s objectives, goals or future plans,statements, exploration results, potential mineralization, theestimation of mineral resources, exploration and mine developmentplans, timing of the commencement of operations and estimates ofmarket conditions, as well as the anticipated size of the Offering,the Offering price, the anticipated closing date and the completion ofthe Offering, the anticipated use of the net proceeds from theOffering and the receipt of all necessary approvals. Factors thatcould cause actual results to differ materially from suchforward-looking information include, but are not limited to failure toidentify mineral resources, failure to convert estimated mineralresources to reserves, the inability to complete a feasibility studywhich recommends a production decision, the preliminary nature ofmetallurgical test results, delays in obtaining or failures to obtainrequired governmental, environmental or other project approvals,political risks, inability to fulfill the duty to accommodate FirstNations and other indigenous peoples, uncertainties relating to theavailability and costs of financing needed in the future, changes inequity markets, inflation, changes in exchange rates, fluctuations incommodity prices, delays in the development of projects, capital andoperating costs varying significantly from estimates and the otherrisks involved in the mineral exploration and development industry, aninability to complete the Offering on the terms or on the timeline asannounced or at all, an inability to predict and counteract theeffects of COVID-19 on the business of the Company, including but not limited tothe effects of COVID-19 on the price of commodities, capital marketconditions, restriction on labour and international travel and supplychains, and those risks set out in the Company’s public documentsfiled on SEDAR. Although the Company believes that the assumptions andfactors used in preparing the forward-looking information in this newsrelease are reasonable, undue reliance should not be placed on suchinformation, which only applies as of the date of this news release,and no assurance can be given that such events will occur in thedisclosed time frames or at all. The Company disclaims any intentionor 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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