21-February-2018 ROX-V, Adzn–v and ALS-T --- 1 --- Canstar Resources, Adventus Zinc and Altius Minerals Announce the Consolidation of Newfoundland
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CANSTAR RESOURCES, ADVENTUS ZINC AND ALTIUS MINERALS ANNOUNCE THE CONSOLIDATION OF
NEWFOUNDLAND ZINC EXPLORATION PROJECTS, FOCUSED ON THE BUCHANS CAMP
Toronto, February 21, 2018 – Canstar Resources Ltd. ("Canstar") (TSX-V: ROX), Adventus Zinc Corporation (“Adventus”)
(TSX-V: ADZN) and Altius Minerals Limited (“ Altius”) (TSX: ALS) are pleased to announce that they have entered into a
three-way definitive agreement (the “ Transaction”) dated February 20, 2018 whereby Canstar will acquire the
Newfoundland base metal exploration assets of Adventus and the Daniel's Harbour Zinc Project from Altius in exchange
for: (i) the issuance of common shares of Canstar to Adventus and Altius ; and (ii) a funding commitment from Altius of
$500,000 as part of a $750,000 private placement (as further described below) . The Transaction will allow Canstar to
consolidate the majority of the Buchans Camp and adds three high quality Newfoundland zinc exploration projects to
Canstar’s portfolio . Upon closing of the Transaction (the “ Closing”), Canstar’s Newfoundland exploration team will
initiate a comprehensive 2018 exploration program focused on the Buchans Camp, with a minimum 3,000 m of diamond
drilling campaign anticipated in 2018 to be completed in phases (with full details of this program to follow from Canstar
upon Closing).
Following the Closing, Canstar will focus its attention on polymetallic exploration in Newfoundland, in particular the
Buchans Camp, where it will own the majority of the district’s mineral rights . The Buchans Mine was one of the highest-
grade polymetallic mines globally, producing a historical 16.2 million tonnes averaging approximately 14.50% Zn, 7.56%
Pb, 1.33% Cu, 126 g/t Ag and 1.37 g/t Au over its 56 -year mine life (Kirkham, 1986). The southeast corner of the region
also hosted Teck Resources Limited's Duck Pond Mine, which operated between 2007 and 2015 with an initial reserve of
4.08 million tonnes averaging approximately 3.3% Cu, 5.7% Zn, 59 g/t Ag and 0.86 g/t Au (Guy Belleau & Petr Pelz, 2005).
The Duck Pond 1,800 tpd flotation mill is currently on care and maintenance.
Highlights of Canstar Assets
The Mary March Project, located 20 km east of B uchans and next to a provincial highway , which is a joint
venture between Canstar (56%) and Glencore (44%). Canstar has first right -of-refusal to acquire the remaining
interest from Glencore; and
In 1999 and 2000 , previous owners Phelps Dodge intersected 10.33% Zn, 118.1g/t Ag, 1.62% Pb, 4.1 g/t Au,
0.66% Cu over 9.23 m; 16.8% Zn, 660 g/t Ag, 12.2 g/t Au, 5.44% Pb, 0.18% Cu over 0.91 m; and 3.02% Zn, 1.08%
Pb, 72.4 g/t Ag, 0.13% Cu over 20.6 m. These remain the best drill holes in the Buchans camp, outside of the
historic Buchans mine.
Highlights of Adventus’ Newfoundland Assets
Adventus is vendi ng its 100% interest in its approximately 39,000 hectare land package located in the Buchans
camp, which represents the largest land position in the camp;
A heliborne time domain electro-magnetic (TDEM) survey flown in 2017 over the entire Buchans land package
resulting in the identification of approximately 35 drill -ready targets, with some of the most exciting targets
contiguous to Canstar's Mary March and Nancy April projects; and
Adventus is also vending its 100% ownership interest in the Katie and La Poile base metal projects, both having
prospective volcanic massive sulphide targets supported by historic trenching and drilling results.
Highlights of Altius’ Involvement and the Daniel’s Harbour Zinc Project
Altius is vending its 100% owned Daniel ’s Harbour Zinc Project, approximately 9,000 hectares of prospective
lands surrounding the former high -grade zinc mine operated by Teck Resources Limited from 1975 to 1990.
During this period, Teck reported production of approximately 7 million tonnes at an average grade of 7.8% zinc
(Wardle, 2008);
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Altius and Canstar will enter into a 12 -month technical services agreement with Altius to carry out the 2018
exploration program for the consolidated Newfoundland projects subject to TSX Venture Exchange (“ TSX-V”)
approval; and
Canstar will complete a $750,000 non -brokered private placement the proceeds of which will be applied to a
first phase Newfoundland exploration program, G &A, corporate activities as well as working capital . The
financing will consist of the sale of 4,166,667 common shares issued at $0.06 per share on a hard dollar basis for
gross proceeds of $250,000, and 6,250,000 common shares issued on a flow-through basis at $0.08 per share for
gross proceeds of $500,000. Altius is subscribing for the flow-through shares for a total investment of $500,000
and will have pro -rata equity participation rights going forward . Altius will also receive a right of first refusal on
any future royalty and/or streaming financing related the Mary March property.
Dr. David Palmer, Director of Canstar, commented, “We are pleased to enter into this transaction with Adventus and
Altius. Canstar has long been a champion of the Mary March Project and the consolidation of these Buchans properties
into a district -scale exploration project is a great opportunity for all Shareholders. We are pleased that Adventus and
Altius share our enthusiasm for its p otential and with the combined technical experience of all three companies and a
new management team we will be able to advance exploration programs very effectively. We look forward to
completing this transaction and commencing exploration.
Christian Kargl-Simard, President and CEO of Adventus, commented, “ Adventus is excited to become involved in such a
prospective suite of exploration assets in one of the best jurisdictions globally to operate. This Transaction provides
synergies for all three parties, and a focused vehicle to unlock the value in the Buchans Camp and Newfoundland and
Labrador. We believe the timing is right to commit modern exploration in this storied Canadian base metals camp. With
the local infrastructure and high grades, new discoveries will create very significant value for all shareholders.”
Transaction Summary
Under the Transaction, Canstar will issue 86.7 million shares to Adventus for its portfolio of assets and Altius will receive
12.1 million shares for its Daniel's Harbour Zinc Project. Upon Closing, including completion of the private placement,
the current shareholders of Canstar will own approximately 49% of the consolidated company , while Adventus and
Altius will own approximately 40% and 9%, respectively , and other investors in the private placement will own 2%.
Following completion of the Transaction, Canstar will use commercially reasonable efforts to complete a minimum two
million dollar flow-through private placement financing.
Upon completion of th e Transaction, the Board of Directors of Canstar (the “Board”) will initially be comprised of four
members, with three members appointed by Canstar and one member appointed by Adventus (and Adventus retaining
the right to appoint a second member at a later date) . The Board will initially consist of David Palmer, Dennis Peterson
and Patrick Reid , existing directors of Canstar, and Sam Leung , the Vice President of Corporate Development fo r
Adventus. Mr. Jack Hurley, an existing director of Canstar is thanked for his years of service and will continue as CFO.
Dennis Peterson is acting as Chairman and interim CEO, while a CEO search is underway. A technical steering committee
of Qualified Persons as defined by National Instrument 43 -101 - Standards of Disclosure for Mineral Projects , consisting
of Dr. David Palmer, Jason Dunning and Dr. Lawrence Winter will assist with the direction of Canstar’s exploration
programs.
The Transac tion will be subject to TSX -V approval for both Canstar and Adventus . Canstar is arm’s length to both
Adventus and Altius. Adventus and Altius are "non -arm's length parties" as Altius is an "insider" of Adventus as such
term is defined under securities laws. Canstar will require shareholder approval pursuant to the policies of the TSX
Venture Exchange as Adventus will become a “control person” of Canstar on closing and the Transaction is viewed as a
“reverse take-over”. Canstar will apply to the TSX-V for a waiver from the requirement to engage a sponsor with respect
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to the Transaction; however, there is no assurance that a waiver will be granted. Canstar intends to include any
additional information regarding sponsorship in a subsequent press releas e. The Transaction is also subject to
satisfaction of certain other closing conditions customary in transactions of this nature. Directors and officers of Canstar,
representing 6.3% of the Canstar common shares, have entered into voting support agreements with Adventus and
Altius, pursuant to which they will vote their common shares in favour of the Transaction. It is also anticipated, assuming
the Transaction is approved that Canstar will complete a 5 for 1 share consolidation and all shares will be issue d on a
post-consolidated basis . As a result, upon completion of the Transaction, there will be issued and outstanding
approximately 212,025,189 shares on a pre -consolidation basis and 42,405,038 shares on a post -consolidation basis.
The effective price of the private placement will be $0.30 per hard dollar common share and $0.40 per flow -through
common share.
Full details of the Transaction will be included in the management information circular of Canstar to be mailed to their
shareholders and posted on www.sedar.com. It is anticipated that the meeting of Canstar shareholders and the closing
will take place by May 2018.
Lawrence Winter, Ph.D., P.Geo., Vice ‐President of Exploration for Altius, a Qualified Person as defined by National
Instrument 43-101 - Standards of Disclosure for Mineral Projects, is responsible for the scientific and technical data
presented herein and has reviewed, prepared and approved this release.
About Canstar
Canstar Resources is a Canadian mineral exploration and devel opment company. Canstar's objective is to discover and
develop economic mineral deposits primarily in North America. Currently, Canstar's focus is on its mineral exploration
properties in Newfoundland.
About Adventus
Adventus is a well-financed and unique company focused on zinc-related exploration and project development globally.
Its strategic shareholders include Altius Minerals Corporation, Greenstone Resources LP, and Resource Capital Funds; as
well as other highly respected investors in the mining bu siness. Adventus owns large prospective land packages in both
Ireland and Newfoundland and Labrador, Canada, and is earning a 75% ownership interest in the Curipamba copper -
gold-zinc project in Ecuador. In addition, Adventus has a country-wide generative exploration alliance with its partners in
Ecuador. Adventus is based in Toronto, Canada, and is listed on the TSX-V under the symbol ADZN.
About Altius
Altius’ directly and indirectly held diversified royalties and streams generate revenue from 15 operating mines. These
are located in Canada and Brazil and produce copper, zinc, nickel, cobalt, iron ore, potash and thermal (electrical) and
metallurgical coal. The portfolio also includes numerous pre -development stage royalties covering a wide spectru m of
mineral commodities and jurisdictions. It also holds a large portfolio of exploration stage projects which it has generated
for deal making with industry partners that results in newly created royalties and equity and minority interests. The
Altius exploration team was recently awarded the 2017 Prospector/Explorer Award from the Newfoundland Branch of
the CIMM for its recent work on project generation.
Completion of the transaction is subject to a number of conditions, including but no t limited to, TSX-V acceptance and
shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is
obtained. There can be no assurance that the transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular or filing statement to be
prepared in connection with the transaction, any information released or received with respect to the transaction may
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not be accurate or comp lete and should not be relied upon. Trading in the securities of Canstar should be considered
highly speculative.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither
approved nor disapproved the contents of this news release.
Forward-looking Statement
This press release contains “forward -looking information” within the meaning of applicable Canadian securities laws.
Any statements that express or involve discussions with respect to prediction s, expectations, beliefs, plans, projections,
objectives, assumptions or future events or performance (often, but not always, identified by words or phrases such as
“believes”, “anticipates”, “expects”, “is expected”, “scheduled”, “estimates”, “pending”, “ intends”, “plans”, “forecasts”,
“targets”, or “hopes”, or variations of such words and phrases or statements that certain actions, events or results
“may”, “could”, “would”, “will”, “should” “might”, “will be taken”, or “occur” and similar expressions) are not
statements of historical fact and may be forward -looking statements. Forward-looking information in this news release
includes, but is not limited to, the closing of the Transaction, anticipated drilling at Buchans Camp, satisfaction of closing
conditions, approval of the TSX-V, approval by the shareholders of Canstar and the potential for exploration.
Forward-looking information herein includes, but is not limited to, statements that address activities, events or
developments that Canstar, Adventus and Altius expect or anticipate will or may occur in the future. Although Canstar,
Adventus and Altius has attempted to identify important factors that could cause actual actions, events or results to
differ materially from those described in forward -looking information, there may be other factors that cause actions,
events or results not to be as anticipated, estimated or intended. There can be no assurance that such information will
prove to be acc urate, and actual results and future events could differ materially from those anticipated in such
information. Accordingly, readers should not place undue reliance on forward -looking information. Canstar, Adventus
and Altius do not undertake to update any forward-looking information except in accordance with applicable securities
laws.
All monetary figures referenced in this press release are in Canadian dollars unless otherwise stated.
For further information from Canstar, please contact: Karen Willoughby, Director Corporate Communications, at 1-866-
936-6766 or [email protected].
For further information from Adventus, please contact Christian Kargl-Simard, Chief Executive Officer, at 1-416-230-3440
For further information from Altius, please contact Chad Wells [email protected] or Flora Wood at 1-877-576-
2209.