CSRNF - Canstar Files Technical Report and Obtains Exchange Approval for Option Agreement on the Golden Baie Project
(TheNewswire)
Toronto, Ontario - TheNewswire - November 6, 2020 -CANSTAR RESOURCES INC. (TSXV:ROX) (OTC:CSRNF) (" Canstar " or the" Company ") announces that it has filed aNational Instrument 43-101 Standards of Disclosure for MineralProjects (" NI43-101 ") technical report entitled "NI43-101 Technical Report on the Golden Baie Project, Newfoundland,Canada", with an effective date of October 13, 2020 (the" TechnicalReport "). The Technical Report was preparedby David T.W. Evans, M.Sc., P.Geo., a "Qualified Person" asdefined by NI 43-101.
The Technical Report is available under the Company'sSEDAR profile at http://www.sedar.com and on the Company's website at www.canstarresources.com .
The Company is also pleased to announce that it hasreceived TSX Venture Exchange (the " Exchange ")approval for the closing of the option agreement (the" OptionAgreement ") entered into with Altius Resources Inc. (" Altius "), awholly owned subsidiary of Altius Minerals Corporation (TSX: ALS), andother arm's length parties, as announced by newsrelease on August 26, 2020. Details of the Option Agreement areprovided below and the Company expects closing to take place in thenext week.
Golden Baie Project OptionTerms
The Company has entered into a definitive agreementwith Altius, Corwin Northcott, and Colin Kendell (collectively the" Optionors ") that grants to the Company the exclusive right andoption (the " Option ") to acquire, subject to retentionby the Optionors of certain rights related to a 2% net smelter return(" NSR ") royalty, a 100% interest in mineral claims in theBaie d'Espoir region of Newfoundland (the " Golden Baie Claims ").
Under the Option Agreement, Canstar can earn a 100%undivided interest in the Golden Baie Claims over a four year periodas follows:
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- Issuance of 4,000,000 common shares of the Company toAltius upon receipt of Exchange approval;
- Payment of an aggregate cash payment of $50,000 andissuance of an aggregate of 2,000,000 common shares to the Optionorsupon signing of the definitive agreements (the " Definitive Agreements ");
- Issuance of 2,000,000 common shares to Altius on thefirst anniversary of the signing of the Definitive Agreements;
- Payment of an aggregate cash payment of $50,000 andissuance of an aggregate of 1,000,000 common shares to the Optionorson the first anniversary of the Definitive Agreements;
- Issuance of 2,500,000 common shares to Altius on thesecond anniversary of the Definitive Agreements;
- Payment of an aggregate cash payment of $50,000 andissuance of an aggregate of the lesser of $250,000 worth of commonshares or 1,000,000 common shares to the Optionors on the secondanniversary of the Definitive Agreements; and
- Payment of an aggregate cash payment of $100,000 andissuance of an aggregate of the lesser of $250,000 worth of commonshares or 1,000,000 common shares to the Optionors on the thirdanniversary of the Definitive Agreements.
As further consideration for the Option, Canstar isrequired to commit to fund exploration expenditures of a minimum of$1,250,000 over a four-year period. The minimum expenditurecommitment for the first year will be $500,000.
In addition, the Optionors will be entitled to anaggregate milestone payment of $1,000,000 by the Company to theOptionors upon the Golden Baie Project claims achieving NationalInstrument 43-101 defined measured and indicated mineral resources ofat least one million contained gold ounces.
The Optionors will transfer title to the Little RiverClaims to Canstar subject to the Optionors retaining a 2.0% NetSmelter Royalty from all commercial production on the Golden BaieProject (the " Royalty "). Altius shall maintain theright to purchase from the Optionors 1% of the Royalty for the totalsum of $1,500,000. Altius will also have a first right of refusal onthe purchase of the remaining 1% of the Royalty.
So long as Altius owns more than 9.9% of the Company'sshares outstanding, on any equity financing during the term of theOption, Altius shall have the right, at its sole discretion, toparticipate in 19.9% of such financing on the same terms as otherinvestors and subject to it not becoming a control person.
About Canstar Resources Inc.
Canstar Resources isfocused on creating shareholder value through the discovery anddevelopment of economic mineral deposits in Newfoundland and Labrador,Canada. Canstar has an option to acquire a 100% interest in the GoldenBaie Project, a large claim package (over 61,000 hectares) withrecently discovered, 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 Resources is based in Toronto,Canada, and is listed on the TSX Venture Exchange under the symbolROX .
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". Since forward-lookingstatements are based on assumptions and address future events andconditions, by their very nature they involve inherent risks anduncertainties. Although these statements are based on informationcurrently available to the Company, the Company provides no assurancethat actual results will meet management's expectations. Risks,uncertainties and other factors involved with forward-lookinginformation could cause actual events, results, performance, prospectsand opportunities to differ materially from those expressed or impliedby such forward-looking information. Forward looking information inthis news release includes, but is not limited to, the Company'sobjectives, goals or future plans, statements, exploration results,potential mineralization, the estimation of mineral resources,exploration and mine development plans, timing of the commencement ofoperations and estimates of market conditions, as well as theanticipated size of the Offering, the Offering price, the anticipatedclosing date and the completion of the Offering, the anticipated useof the net proceeds from the Offering and the receipt of all necessaryapprovals. Factors that could cause actual results to differmaterially from such forward-looking information include, but are notlimited to failure to identify mineral resources, failure to convert estimated mineral resourcesto reserves, the inability to complete a feasibility study whichrecommends 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 notlimited to the effects of COVID-19 on the price of commodities,capital market conditions, restriction on labour and internationaltravel and supply chains, and those risks set out in the Company'spublic documents filed on SEDAR. Although the Company believes thatthe assumptions and factors used in preparing the forward-lookinginformation in this news release are reasonable, undue reliance shouldnot be placed on such information, which only applies as of the dateof this news release, and no assurance can be given that such eventswill occur in the disclosed time frames or at all. The Companydisclaims any intention or obligation to update or revise anyforward-looking information, whether as a result of new information,future events or otherwise, other than as required by law.
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