Vancouver, BC / ACCESSWIRE / May 28, 2014 / Redstar Gold Corp (TSX.V:RGC) ("Redstar" or the "Company") announces it has closed its previously announced non-brokered private placement of 55,133,333 units at a price of $0.06 per unit for gross proceeds of $3.31 million. Proceeds from the placement will be used to advance the Company's Unga gold project in Alaska and for general working capital. A surface work program on Unga is planned for this summer, to be followed by a drilling program later this year, and into 2015.
The Company is pleased to report that institutional participation in the private placement was very strong, representing 89% of this capital raise. Investment firms from the United States, Britain and Switzerland have become new Redstar shareholders. Geologic Resource Partners LLC a leading mining investment fund based in Boston acquired 28,333,333 units representing approximately 15.7% of the Company's issued and outstanding shares following the closing of the placement. Also participating in the placement were three (3) highly respected European fund managers. Redstar believes that the high quality of this institutional investor group participating in this financing is further testimony of the potential of Redstar's mineral assets.
Additionally, Redstar's Chairman, Jacques Vaillancourt through wholly owned Mount Everest Finance SA, participated in the financing purchasing 2.5 million units and separately purchased 1.9 million shares in the open market thereby increasing his holdings by 4.4 million shares to 25.4 million shares.
Each unit consists of one common share and two transferable 1/2 common share purchase warrants (Warrant A & Warrant B). Each whole (1) Warrant A can be exercised into one (1) common share of Redstar at a price of $0.09 per share for a period of 12 months from the closing. Each whole (1) Warrant B can be exercised into one (1) common share of Redstar at a price of $0.12 per share for a period of 30 months from the closing. If 18 months after closing Redstar common shares trade at a 33.3% premium to the warrant exercise price (i.e. $0.16) for 10 consecutive trading days then the Company can force warrant holders to exercise their Warrant B into Redstar shares. All securities issued under the placement are subject to restrictions on resale to September 28, 2014.
The Company has paid finders' fees in the amount of $64,080 to finders who introduced subscribers to the placement, pursuant to the policies of the TSX.V.
Redstar is a junior exploration company focused on gold exploration in North America. The Company's main project is the Unga Project in southwestern Alaska which contains high-grade gold-silver vein systems. Redstar is the first company to consolidate two strategic contiguous land positions at Unga allowing for comprehensive district-scale exploration for the first time. The Shumagin property contains the Shumagin vein with a historic (non 43-101 compliant) resource estimate of 254,000 tonnes grading 27.4 g/t gold and 127 g/t silver (SRK Consulting, 2000)* based in shallow drilling in the 1980's. The Shumagin property also contains the Apollo mine, Alaska's first major underground gold mine, which produced approximately 150,000 ounces of gold between 1890 and 1922 from shallow oxide ore in high-grade gold veins. Mineralization along both the Shumagin and Apollo veins remains open at depth and along strike. Both veins lie along poorly-explored, district-scale mineralized vein trends, each extending for 7-9km. The second property, Unga-Popof, contains the extensions to the Shumagin and Apollo veins as well as additional vein fields with high-grade Au-Ag along the broader Apollo and Shumagin trends. In addition to Apollo-Sitka, Shumigan and Unga-Popof there are several other structures on the Property which have been sampled and indicate good potential for high grade gold mineralization in veins.
Redstar also holds 50% of the Newman Todd Project in Red Lake Ontario. Newman Todd is a high- grade gold discovery in the mineralization along a 1.8Km corridor within the Newman Todd Structure ("NTS"). The gold mineralization in the NTS remains open along strike and at depth. Additionally, the Company has 10 properties in Nevada which have been optioned out and upon which Redstar has retained royalties and additional economic rights.
*A qualified person has not done sufficient work to classify the historical estimate as current mineral resources, the Company is not treating the historical estimate as current mineral resources and the historical estimate should not be relied upon.
On Behalf of the Board,
Redstar Gold Corp.
President and CEO
|TSX.V:RGC |CORPORATE INQUIRIES |
|WWW.REDSTARGOLD.COM |Redstar Gold Corp. |
|SUITE 615 |Tim Mikula, Business Development |
|800 WEST PENDER STREET|Tel: 604.488.0051 |
|VANCOUVER, BC | [email protected]|
|TEL: 604.488.0051 | |
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.
Forward-Looking Information This release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address events or developments that Redstar Gold Corporation (the "Company") expects to occur, are forward-looking statements. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in the forward-looking statements. Factors that could cause the actual results to differ materially from those in forward-looking statements include market prices, exploitation and exploration successes, and continued availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. Forward-looking statements are based on the beliefs, estimates and opinions of the Company's management on the date the statements are made. Except as required by applicable securities laws, the Company undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors, should change.
SOURCE: Redstar Gold Corp