NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAWS.
Desert Star Announces Up To C$14 Million Private Placement of Subscription Receipts
Vancouver, B.C., November 2, 2017. Desert Star Resources Ltd. (TSX-V: DSR) (“Desert Star” or the “Company”) is pleased to announce that it has engaged Macquarie Capital Markets Canada Ltd., as lead agent on behalf of a syndicate of agents including BMO Capital Markets, Haywood Securities Inc. and PI Financial Corporation (the “Agents”), who have agreed to sell on a “best efforts” private placement basis, up to 21,539,000 subscription receipts at a price of C$0.65 per subscription receipt, for aggregate gross proceeds of up to approximately C$14 million (the “Offering”). In addition, Desert Star will complete a C$3 million non-brokered private placement, under the same terms as the Offering (the “Non-Brokered Offering”).
Each subscription receipt will entitle the holder to receive one unit of Desert Star consisting of one common share and one-half of one common share purchase warrant with each whole warrant entitling the holder to acquire an additional common share at C$1.00 per share for 36 months following closing. The subscription receipts will not be subject to any hold or restricted period which extends beyond four months and one day after the date of Closing pursuant to National Instrument 45-102 – Resale of Securities. Common shares and warrants issued on conversion of the subscription receipts will be free of statutory hold periods in Canada. The Agents will receive a 6.0% cash commission and broker warrants to purchase shares equal to 3% of the number of subscription receipts sold under the offering, exercisable for 24 months from closing at C$0.65 per share.
The proceeds from the Offering and the Non-Brokered Offering will be used primarily to fund the acquisition of the Kutcho Project from Capstone Mining Corp. (see June 15, 2017 news release). Concurrent with the closing of the private placement and Kutcho Project acquisition the Company will also close a C$20 million convertible debt loan (see October 30, 2017 news release) and will also have access to US$7 million as an early deposit on a streaming facility with Wheaton Precious Metals (see August 10, 2017 news release).
Proceeds of the Offering and Non-Brokered Offering will be held in escrow pending conversion of the subscription receipts upon satisfaction of certain conditions precedent including: approval of the TSX Venture Exchange and completion the acquisition of the Kutcho Project. If the conversion of the subscription receipts does not occur before 5:00pm (Vancouver time) on December 15, 2017 (unless extended) the holders of the subscription receipts will be entitled to a return of their full subscription price and their pro rata entitlement to the interest earned on the escrowed funds.
Capstone and the Company have agreed to extend the outside date for completion of the Kutcho Project acquisition to December 15, 2017.
Vince Sorace President and CEO, Desert Star Resources Ltd.
Desert Star Resources
For further information regarding Desert Star, please email firstname.lastname@example.org or visit our website at www.desertstar.ca.
Cautionary Note Regarding Forward-Looking Statements
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.