CSRNF - Canstar Options Additional Mineral Claims in South-Central Newfoundland
(TheNewswire)
Highlights of the OptionedClaims
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- 41 mineral claims covering 1,025 hectares contiguouswith the Company's existing option on 61,150 hectares of mineralclaims in south-central Newfoundland, known as the Golden BaieProject.
- Canstar has the option to acquire 100% of the mineralclaims, subject to an 1.5% NSR royalty, for aggregate cashconsideration of $75,000 and share issuances worth $75,000 over athree-year period.
- Significant gold exploration work, including diamonddrilling, was conducted in the 1980s that identified multiple goldoccurrences.
Toronto, Ontario - TheNewswire - November 25, 2020 - CANSTAR RESOURCES INC.(TSXV:ROX ) ( OTC:CSRNF) (" Canstar" or the "Company") is pleased to announce that it has entered intoan option agreement (the "OptionAgreement") with Altius Resources Inc.("Altius"), a wholly owned subsidiary of Altius MineralsCorporation (TSX: ALS), David Hicks, Darrin Hicks, and Natalie Hicks(the "Hicks Family" or the"Optionors") . The Option Agreementgives the Company exclusive right and option(the "Option") to acquire, subject to retention by Altiusand the Hicks Family of certain rights related to a 1.5% net smelterreturn royalty (the "Royalty"), a 100%interest in 41 mineral claims covering an area of 1,025 hectarescontiguous with the Golden Baie Project (the "Hicks Claims")(Figure 1).
In consideration for the acquisition of the Option,Canstar shall, among other things: (i) pay to the Optionors anaggregate of such number of Canstar common shares("Shares"), payable in installments as is equal to$75,000.00 divided by the prevailing 5-day volume weighted averageprice per Share on the TSX Venture Exchange ("Exchange");and (ii) pay to the Optionors, an aggregate of $75,000.00 in cash,payable in installments over the three yearoption period. Additional details of the OptionAgreement are provided below.
Rob Bruggeman, President & CEO of Canstar, stated:"We are very pleased to add to our mineral claims portfolio atGolden Baie. The claims announced today, which are intersected by ahighway, have seen the most extensive historical exploration workcompleted on them of all claims in the area. Extensive soil sampling,geophysics, and diamond drilling on the claims delineated twosignificant mineralized zones that remain open along strike and atdepth. The historic exploration work done on the newly optioned claimswill advance our understanding of structural and lithological controlson gold mineralization in the area. Perhaps more importantly, theseclaims give us several new advanced gold exploration targets that haveseen limited new exploration work in the past threedecades."
Historical Exploration
Substantial exploration work on the Hicks Claims wasconducted by Westfield Minerals Limited ("Westfield")between 1985 and 1988. Westfield completed an integrated explorationprogram of geological mapping, prospecting, lithogeochemical and soilgeochemical sampling, ground geophysics, trenching and ultimatelydiamond drilling. This exploration work identified several goldoccurrences on the Hicks Claims, including what are now known as theWolf Pond and 22 West Prospects.
Drilling by Westfield at both the Wolf Pond and 22 WestProspects intersected significant gold mineralization in severalholes. At Wolf Pond, a mineralized zone averaging 2-3 metres thickwith grades of 3-5 g/t gold was delineated within a broader envelope5-8 metres thick averaging 1-2 g/t gold over a strike length of 450metres and to a depth of 165 metres. The zone is open both alongstrike and at depth. The best intersections reported by Westfieldinclude 3.75 g/t gold over 4.6 metres including6.52 g/t gold over 2.0 metres (DDH87-04) and 2.67 g/t gold over 7.2metres including 6.11 g/t gold over 1.1 metres (DDH87-09).
The mineralized zone at the 22 West Prospect is between1.5-2.5 metres thick and has a strike length of approximately 150metres, delineated to a depth of 50-100 metres. The best intersectionsreported by Westfield included 4.46 g/t gold over 3.0 metres(DDH88-17), 7.08 g/t gold over 2.0 metres and 4.46 g/t gold over 3.0metres (DDH88-21) and 10.97 g/t gold over 0.5 metres (DDH88-22). Nofurther drilling has been done on these prospects since 1988.
The historical results are considered to be historicalin nature and have not been independently verified by Canstar.
Figure 1 - Claims Map Showing theExisting Golden Baie Claims and Newly Optioned Hicks Claims
Option Terms for the HicksClaims
In order for the Company to exercise the Option and toacquire a 100% interest in the Hicks Claims, subject to the retentionby the Optionors of the Royalty, in accordance with the terms of theOption Agreement, it must:
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1. On closing of the OptionAgreement, issue to the Optionors an aggregate of $10,000 worth ofShares, which will be determined based on the 5-day volume weightedaverage price per Share on the Exchange ending on the day prior to theclosing date;
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2. On the first anniversary ofthe Option Agreement, pay to the Optionors an aggregate cash paymentof $20,000 and issue to the Optionors an aggregate of $15,000 worth ofShares, which will be determined based on the5-day volume weighted average price per Share on the Exchange endingon the day prior to the first anniversary of the OptionAgreement;
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3. On the second anniversary ofthe Option Agreement, pay to the Optionors an aggregate cash paymentof $25,000 and issue to the Optionors an aggregate of $20,000 worth ofShares, which will be determined based on the 5-day volume weightedaverage price per Share on the Exchange ending on the day prior to thesecond anniversary of the Option Agreement;
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4. On the third anniversary ofthe Option Agreement, pay to the Optionors an aggregate cash paymentof $30,000 and issue to the Optionors an aggregate of $30,000 worth ofShares, which will be determined based on the 5-day volume weightedaverage price per Share on the Exchange ending on the day prior to thethird anniversary of the Option Agreement.
Pursuant to the Option Agreement, the Company and theOptionors have also entered into a royalty agreement pursuant to whichthe Optionors shall retain the Royalty, namely a 1.5% net smelterreturn royalty. Altius shall have the right to purchase at any timefrom the Optionors one third of the Royalty (namely, a 0.5% netsmelter return royalty) for the total sum of $1,000,000 (the"Buyback Right"). In addition to the Buyback Right, Altiusshall have also have a right of first refusal on any sale by theOptionors of the remaining two thirds of the Royalty.
Qualified Person
Bob Patey, B.Sc., P.Geo., a contractor providinggeological services to the Company, and a Qualified Person as definedby National Instrument 43-101 - Standards of Disclosure for MineralProjects, is responsible for the scientific and technical datapresented herein and has reviewed and approved this release.
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 61,000 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 Resources is based in Toronto,Canada, and is listed on the TSX Venture Exchange under the symbol ROXand trades on the OTCPK under 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". 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 implied by suchforward-looking information. Forward looking information in this newsrelease includes, but is not limited to, the Company's objectives,goals or future plans, statements, exploration results, potentialmineralization, the estimation of mineral resources, exploration andmine development plans, timing of the commencement of operations andestimates of market conditions, as well as the anticipated size of theOffering, the Offering price, the anticipated closing date and thecompletion of the Offering, the anticipated use of the net proceedsfrom the Offering and the receipt of all necessary approvals. Factorsthat could 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 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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