Canstar Files Technical Report and Obtains Exchange Approval for Option Agreement on the Golden Baie Project
220 Bay Street TSX-V: ROX
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Canstar Files Technical Report and Obtains Exchange
Approval for Option Agreement on the Golden Baie Project
Toronto, Ontario – November 6, 2020 – CANSTAR RESOURCES INC. (TSXV:ROX) (“Canstar”
or the “Company”) announces that it has filed a National Instrument 43 -101 Standards of
Disclosure for Mineral Projects (“NI 43-101”) technical report entitled “NI 43-101 Technical Report
on the Golden Baie Project, Newfoundland, Canada”, with an effective date of October 13, 2020
(the “ Technical Report”). The Technical Report was prepared by David T.W. Evans , M.Sc.,
P.Geo., a “Qualified Person” as defined by NI 43-101.
The Technical Report is available under the Company’s SEDAR 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 has received TSX Venture Exchange (the
“Exchange”) approval for the closing of the option agreement (the “Option Agreement”) entered
into with Altius Resources Inc. (“Altius”), a wholly owned subsidiary of Altius Minerals Corporation
(TSX: ALS), and other arm’s length parties, as announced by news release on August 26, 2020.
Details of the Option Agreement are provided below and the Company expects closing to take
place in the next week.
Golden Baie Project Option Terms
The Company has entered into a definitive agreement with Altius, Corw in Northcott, and Colin
Kendell (collectively the “Optionors”) that grants to the Company the exclusive right and option
(the “Option”) to acquire, subject to retention by the Optionors of certain rights related to a 2%
net smelter return (“NSR”) royalty, a 100% interest in mineral claims in the Baie 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 period as follows:
• Issuance of 4,000,000 common shares of the Company to Altius upon receipt of Exchange
approval;
• Payment of an aggregate cash payment of $50,000 and issuance of an aggregate of
2,000,000 common shares to the Optionors upon signing of the definitive agreements (the
“Definitive Agreements”);
• Issuance of 2,000,000 common shares to Altius on the first anniversary of the signing of
the Definitive Agreements;
• Payment of an aggregate cash payment of $50,000 and issuance of an aggregate of
1,000,000 common shares to the Optionors on the first anniversary of the Definitive
Agreements;
• Issuance of 2,500,000 common shares to Altius on the second anniversary of the
Definitive Agreements;
• Payment of an aggregate cash payment of $50,000 and issuance of an aggregate of the
lesser of $250,000 worth of common shares or 1,000,000 common shares to the Optionors
on the second anniversary of the Definitive Agreements; and
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• Payment of an aggregate cash payment of $100,000 and issuance of an aggregate of the
lesser of $250,000 worth of common shares or 1,000,000 common shares to the Optionors
on the third anniversary of the Definitive Agreements.
As further consideration for the Option, Canstar is required to commit t o fund exploration
expenditures of a minimum of $1,250,000 over a four -year period. The minimum expenditure
commitment for the first year will be $500,000.
In addition, the Optionors will be entitled to an aggregate milestone payment of $1,000,000 by the
Company to the Optionors upon the Golden Baie Project claims achieving National Instrument
43-101 defined measured and indicated mineral resources of at least one million contained gold
ounces.
The Optionors will transfer title to the Little River Claims to Canstar subject to the Optionors
retaining a 2.0% Net Smelter Royalty from all commercial production on the Golden Baie Project
(the “Royalty”). Altius shall maintain the right to purchase from the Optionors 1% of the Royalty
for the total sum of $1,500,000. Altius will also have a first right of refusal on the purchase of the
remaining 1% of the Royalty.
So long as Altius owns more than 9.9% of the Company’s shares outstanding, on any equity
financing during the term of the Option, Altius shall have the right, at its sole discretion, to
participate in 19.9% of such financing on the same terms as other investors and subject to it not
becoming a control person.
About Canstar Resources Inc.
Canstar Resources is focused on creating shareholder value through the discovery and
development of economic mineral deposits in Newfoundland and Labrador, Canada. Canstar has
an option to acquire a 100% interest in the Golden Baie Project, a large claim package ( over
61,000 hectares) with recently discovered, mul tiple outcropping gold occurrences on a major
structural trend in south -central Newfoundland. 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 under the symbol ROX.
For further information, please contact:
Rob Bruggeman P.Eng., CFA
President & CEO
Email: [email protected]
Phone: 1-416-884-3556
www.canstarresources.com
Forward-Looking Statements
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This News Release includes certain "forward-looking statements" which are not comprised of historical facts. Forward
looking statements include estimates and statements that describe the Company’s future plans, objectives or goals,
including words to the effect that the Company or management expects a stated condition or result to occur. Forward
looking statements may be identified by such terms as “believes”, “anticipates”, “expects”, “estimates”, “may”, “could”,
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“would”, “will”, or “plan”. Since forward -looking statements are based on assumptions and address future events and
conditions, by their very nature they involve inherent risks and uncertainties. Although these statements are based on
information currently available to the Company, the Company provides no assurance that actual results will meet
management’s expectations. Risks, uncertainties and other factors involved with forward -looking information could
cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or
implied by such forward-looking information. Forward looking information in this news release includes, but is not limited
to, the Company’s objectives, goals or future plans, statements, exploration results, potential mineralization, the
estimation of mineral resources, exploration and mine development plans, timing of the commencement of operations
and estimates of market conditions, as well as the anticipated size of the Offering, the Offering price, the anticipated
closing date and the completion of the Offering, the anticipated use of the net proceeds from the Offering and the
receipt of all necessary approvals. Factors that could cause actual results to differ materially from such forward-looking
information include, but are not limited to failure to identify mineral resources, failure to convert estimated mineral
resources to reserv es, the inability to complete a feasibility study which recommends a production decision, the
preliminary nature of metallurgical test results, delays in obtaining or failures to obtain required governmental,
environmental or other project approvals, polit ical risks, inability to fulfill the duty to accommodate First Nations and
other indigenous peoples, uncertainties relating to the availability and costs of financing needed in the future, changes
in equity markets, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of
projects, capital and operating costs varying significantly from estimates and the other risks involved in the mineral
exploration and development industry, an inability to complete the Offering on the terms or on the timeline as announced
or at all, an inability to predict and counteract the effects of COVID -19 on the business of the Company, including but
not limited to the effects of COVID-19 on the price of commodities, capital market conditions, restriction on labour and
international travel and supply chains, and those risks set out in the Company’s public documents filed on SEDAR.
Although the Company believes that the assumptions and factors used in preparing the forward-looking information in
this news release are reasonable, undue reliance should not be placed on such information, which only applies as of
the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames
or at all. The Company disclaims any intention or 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.