Canstar Resources Enters into C$500,000 Director-Related Bridge Facility Secured Solely by Churchill Shares; Existing Bridge Note Repaid and Cancelled
NEWS RELEASE
FOR IMMEDIATE RELEASE
Canstar Resources Enters into C$500,000 Director-Related Bridge Facility
Secured Solely by Churchill Shares; Existing Bridge Note Repaid and Cancelled
Toronto, Ontario — September 17, 2026 — Canstar Resources Inc. (TSXV: ROX; OTCID: CSRNF)
(“Canstar” or the “Company”) today announced that it has entered into definitive agreements
dated as of September 14, 2026 with BQS Systematic Equities LP (“BQS”), an entity controlled by
J. Paul Austin III, a director of the Company, for a C$500,000 revolving bridge credit facility (the
“Facility”). The Facility was first announced in the Company’s news release dated July 21, 2026.
The definitive agreements comprise a revolving credit facility agreement, a limited-recourse
facility note and a share pledge agreement (together, the “Facility Documents”).
The Facility is an interim bridge pending completion of the Company’s planned permanent
financing. Advances are to be used for corporate working capital and general corporate
purposes.
Principal Terms
Amount and availability. The Facility provides for up to C$500,000 of revolving advances, fully
available from closing with no borrowing-base test. Amounts repaid may be re-borrowed. The
commitment may be increased by mutual agreement up to the lesser of C$2,500,000 and 24%
of the Company’s market capitalization, with each increase conditional on prior approval by the
Company’s independent directors, confirmation of the applicable MI 61-101 analysis, pledged-
share coverage of at least 125% of the increased commitment and confirmation of no objection
by the TSX Venture Exchange (the “Exchange”). Neither party is obligated to increase the
Facility.
Repayment of the Existing Note. The initial advance under the Facility was made on September
16, 2026. The Company’s promissory note in favor of BQS dated July 17, 2026, as amended
August 13, 2026 (the “Existing Note”), under which US$241,000 (approximately C$339,600) was
outstanding, was repaid in full from the initial advance and cancelled. The Existing Note was
disclosed in the Company’s news releases dated July 21 and August 20, 2026.
Term and prepayment. The Facility matures nine months from the date of the initial advance
and may be prepaid in whole or in part at any time, subject to the minimum interest described
below. This supersedes the statement in the Company’s July 21, 2026 news release that the
Facility may be prepaid without penalty.
Interest, payable in kind in Churchill shares. Interest accrues at 12% per annum on drawn
principal and is payable monthly in common shares of Churchill Resources Inc. (“CRI Shares”)
held by the Company, valued at the 10-trading-day volume-weighted average price on each
payment date. On each advance, the first three months’ interest (3% of the advance) is prepaid
in CRI Shares valued at the 45-trading-day volume-weighted average price preceding the
advance, and a minimum of six months’ interest (6% of the advance) is fixed as a number of CRI
Shares on the same basis and is payable regardless of when the advance is repaid. Interest is
paid, not capitalized. All in-kind deliveries are subject to applicable securities laws, and no
representation is made as to the tradeability of CRI Shares delivered. No securities of the
Company are issuable in connection with the Facility, and the Facility is not convertible into, or
repayable in, securities of the Company.
Principal. Principal is payable in cash. By mutual written agreement at the time, and not
otherwise, principal may instead be settled by delivery of pledged CRI Shares at the 10-trading-
day volume-weighted average price.
Security and limited recourse. The Facility is secured solely by a pledge of the 15,834,097 CRI
Shares owned by the Company and all further CRI Shares receivable under the Company’s
option agreement with Churchill Resources Inc. in respect of the Golden Baie Project, each
tranche pledged on receipt. The Company grants no general security interest, BQS has no
recourse to any other asset of the Company and there is no deficiency claim. If the market value
of the pledged shares falls below 1.10 times the amount outstanding, BQS may direct an orderly
sale of freely tradeable pledged shares through the Company’s broker, subject to daily volume
limits, with proceeds applied to the Facility; a coverage shortfall is not a default and does not
accelerate the Facility or require additional collateral. The Facility contains no change-of-control
default, consent right over fundamental transactions, break fee or make-whole beyond the
minimum interest.
Costs. The Company will reimburse BQS’s reasonable, documented third-party costs of
establishing the Facility, limited to the lesser of actual costs and 2% of principal drawn, as a
recovery of costs and not as a fee or bonus, subject to approval of the amount by the
independent directors. No origination, commitment or other fee is payable. The Company has
also agreed to use commercially reasonable efforts to maintain its investor communications
program through an independent consultant on terms approved by the independent directors;
BQS has no approval or direction right over that program and receives no benefit from it.
Related Party Transaction
BQS is controlled by J. Paul Austin III, a director of the Company, and the Facility is accordingly a
“related party transaction” within the meaning of Multilateral Instrument 61-101 — Protection
of Minority Security Holders in Special Transactions (“MI 61-101”). Mr. Austin declared his
interest, and abstained from and was absent for the Board’s deliberations concerning, and
voting on, the Facility Documents, which were approved by the Company’s independent
directors. The independent directors determined that the Facility is on reasonable commercial
terms that are not less advantageous to the Company than if obtained from an arm’s-length
lender, having regard to the absence of any fee, bonus or securities of the Company, the limited-
recourse structure and the Company’s financing alternatives.
The Company is relying on the exemption from the formal valuation requirement in section
5.5(b) of MI 61-101, on the basis that no securities of the Company are listed or quoted on a
market specified in that section, and on the exemption from the minority approval requirement
in section 5.7(1)(f) of MI 61-101, on the basis that the Facility is a loan obtained by the Company
on reasonable commercial terms that are not less advantageous to the Company than if the loan
had been obtained from an arm’s-length lender, and is not convertible, directly or indirectly,
into equity or voting securities of the Company. The Company filed a material change report in
respect of the proposed Facility on July 24, 2026, more than 21 days before entering into the
Facility Documents. The Company will file a material change report in respect of the Facility.
Counsel to the Company has confirmed that no notice to, or acceptance by, the Exchange is
required in connection with the Facility under Exchange Policy 5.1, as no securities of the
Company are issuable in connection with the Facility and the Company has not charged all or
substantially all of its assets.
The description of the Facility in this news release supersedes the descriptions in the Company’s
news releases dated July 21 and August 20, 2026.
About Canstar Resources Inc.
Canstar Resources Inc. (TSXV: ROX) is a focused VMS exploration company with a portfolio of
projects in established mining jurisdictions. The Company’s flagship Mary March VMS Project
(~122 km²) is located within the Buchans District in Central Newfoundland and is being
advanced under an earn-in joint venture with VMS Mining Corporation. The Buchans mining
camp is well-known for producing some of the highest-grade VMS deposits in North American
mining history. The Company’s Skellefte VMS Project (approximately 68,000 hectares) is located
in the northern portion of the Skellefte VMS belt of Sweden, a well-established VMS district.
Canstar also holds the Golden Baie Project in southern Newfoundland, currently subject to an
option agreement with Churchill Resources Inc.
For further information, please contact:
Juan Carlos Giron, Jr.
President & Chief Executive Officer, Canstar Resources Inc.
Email: [email protected] | Phone: (647) 557-3442 | www.canstarresources.com
Neither the 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.
Forward-Looking Statements
This news release contains “forward-looking information” within the meaning of applicable
Canadian securities laws, including statements regarding the availability and use of advances
under the Facility, any increase in the commitment, the delivery of CRI Shares in payment of
interest, the Company’s reliance on exemptions under MI 61-101, the Company’s planned
permanent financing, and the Company’s working capital needs. Risks and uncertainties include
BQS’s and the Company’s satisfaction of the conditions to advances, the market price and
tradeability of the CRI Shares, restrictions on the delivery or sale of CRI Shares, the Company’s
ability to complete a permanent financing on acceptable terms or at all, the Company’s ability to
repay the Facility at maturity, and changes in market conditions. Actual results may differ
materially from those anticipated. Readers are cautioned not to place undue reliance on
forward-looking information. The Company does not undertake to update any forward-looking
information, except as required by applicable law.