P.O. Box 48778 Stn. Bentall Centre,
STARR PEAK EXPLORATION LTD. P.O. Box 48778 Stn. Bentall Centre, Vancouver, B.C. V7X 1A6
Telephone: 604-669-6463 TSX Venture Exchange Facsimile: 604-669-3041 Trading Symbol: “STE” Toll Free: 1-800-663-9688
News Release – 16-02
STARR PEAK EXPLORATION LTD.
Proposed Shares for Debt Transaction
May 2, 2016
Vancouver, BC – Starr Peak Exploration Ltd. (the “Company”) (TSXV: STE) announces that it has entered into debt settlement agreements to settle an aggregate of $126,136 of debt owed to certain armslength creditors of the Company, in consideration for the issuance of an aggregate of 1,801,943 common shares of the Company at a deemed price of $0.07 per common share (the “Debt Settlement”). The Company has also entered into two additional agreement to settle accounts payable to certain insiders of the Company (the “Insiders”) in the aggregate amount of $682,100 (the “Insider Debt Settlement”), in consideration for the issuance of an aggregate of 9,744,285 common shares also at a deemed price of $0.07 per common share. The Company’s choice to settle outstanding indebtedness with the issuance of common shares is part of its plans to move the Company forward and in order to preserve its funds for operations. The issuance of common shares is subject to the approval by the TSX Venture Exchange (the “Exchange”) and subject to a 4-month hold period.
As a result of the Insider Debt Settlement, J. Frank Callaghan, former President and CEO of the Company, and Standard Drilling & Engineering Ltd. (“Standard Drilling”), a company wholly-owned by Mr. Callaghan, will receive approximately up to $682,100 in common shares, which represents amounts owed by the Company to Mr. Callaghan and Standard Drilling for outstanding management fees, expenses paid and cash advances. The issuance of the common shares would result in Mr. Callaghan directly or indirectly, beneficially owning or controlling more than 20% of the outstanding common shares and becoming a new “Control Person” as defined by the policies of the Exchange. Assuming the up to 9,744,285 Share are issued to Mr. Callaghan, Mr. Callaghan’s common shares position would be up to 64.70% on a diluted and undiluted basis. The Insider Debt Settlement transaction with Mr. Callaghan has received disinterested shareholder approval.
The Insider Debt Settlement is considered to be a “related party transaction” as defined under Multilateral Instrument 61-101 (“MI 61-101”). The Insider Debt Settlement will be exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as its securities are not listed on any stock exchange identified at section 5.5(b) (i) and (ii) of MI 61-101 and neither the fair market value of the Shares to be issued to the Insiders, nor the fair market value of the securities to be distributed to them, will not exceed $2,500,000.
On Behalf of the Board of Directors of Starr Peak Exploration Ltd.
“Thomas Kennedy”
Thomas Kennedy, Chief Executive Officer
For further information please contact:
Christopher P. Cherry, Chief Financial Officer Tel: (604) 669-6463 • Fax: (604) 669-3041
This press release contains “forward-looking information” within the meaning of applicable Canadian securities laws. All statements, other than statements of historical fact, included herein, including statements regarding the proposed share consolidation and seeking shareholder approval therefor, the proposed shares for debt settlement transactions and approval for the creation of a new control person, are forward-looking information. Forward-looking information is typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions or are those which, by their nature, refer to future events. Although the Company believes that such statements are reasonable, there can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. The Company cautions investors that any forward-looking information disclosed by the Company is not a guarantee of future performance, and that actual results may differ materially from those in forward- looking information. Accordingly, readers should not place undue reliance on forward-looking information. Except as required under applicable securities legislation, the Company undertakes no obligation to publicly update or revise forward-looking information.
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.