Arctic Star Closes Final Tranche of Private Placement and Raises Total Gross Proceeds of Approximately $3.4 Million

(TheNewswire)

May 12, 2022 – TheNewswire - Vancouver, British Columbia – Arctic Star Exploration Corp. (TSXV:ADD), (Frankfurt:82A1), (WKN:A2DFY5) (“Arctic Star” or the “Company”) is pleased to announce that the Company has closed the third and final tranche (the “Final Tranche”) of its non-brokered private placement (the “Private Placement”) of flow-through units (the “FT Units”) and non-flow through units (the “Non-FT Units” and, together with the FT Units, the “Units”).

Pursuant to the Final Tranche, the Company issued 18,316,998 Non-FT Units, at $0.07 per Non-FT Unit, for additional proceeds of $1,282,189.86, and 1,537,500 FT Units, at $0.08 per FT Unit, for additional proceeds of $123,000.  In total, under all tranches of the Private Placement the Company issued 39,175,285 Non-FT Units (for gross proceeds of $2,742,269.95) and 8,262,500 FT Units (for gross proceeds of $661,000).

Upon closing the Final Tranche, the Company issued a total of 47,427,785 common shares in the share capital of the Company (the “Shares”) and 43,306,535 non-transferable share purchase warrants (the “Warrants”) in the Private Placement.  8,262,500 Shares in the Private Placement were issued as part of the FT Units and were issued as “flow-through shares” within the meaning of the Income Tax Act (Canada).

The Warrants issued in the Final Tranche are exercisable to purchase 18,316,998 at $0.10 per Share (for the Warrants issued as part of the Non-FT Units), and 768,750 Shares, at $0.15 per Share (for the Warrants issued as part of the FT Units), until May 12, 2024 or earlier subject to an accelerated option clause (the “Acceleration Clause”). Pursuant to the Acceleration Clause, if the Shares close at or above $0.30 for five consecutive trading days on the TSX Venture Exchange (the “TSXV”), then the Warrants must be exercised within a 60-day period by the warrant holders, or failing which, the Warrants shall expire as null and void.

In connection with the closing of the Final Tranche, the Company paid cash finders’ fees of $52,210.80 and issued 735,749 non-transferable share purchase warrants (the “Finder’s Warrants”) to certain eligible finders. The Finders’ Warrants are exercisable to purchase 664,499 Shares at $0.10 per Share and 71,250 Shares at $0.15 per Share. The Finder’s Warrants expire on May 12, 2024 or earlier subject to the Acceleration Clause.

All securities issued in connection with the first tranche of the Private Placement are subject to a statutory hold period expiring on September 13, 2022 in accordance with applicable securities legislation.

The Company intends to use the net proceeds from the Private Placement to carry out exploration on its Diagras Joint Venture (81.5% Arctic Star). The plan is to complete 10 holes at the diamond-bearing Sequoia Kimberlite complex and the program commenced in April of this year (see the Company’s news release dated April 26, 2022). This drilling will help define the size of the complex, the micro-diamond grade, and geology. After drilling at Sequoia, the drill is expected to be deployed to discover new kimberlites. Phase 1 of the airborne survey completed coverage of 46% of the property in late 2021. The Company’s geophysical consultants have selected over 33 possible kimberlite targets from a review of this work and ground crews are expected to be deployed to follow these up. Phase 2 of  the airborne survey is also expected to be completed.

A portion of the net proceeds from the Non-FT Units will be used for general and corporate purposes including, but not limited to, funding a six-month executive advertising package ($90,000 plus applicable tax) with CEO.CA Technologies Inc. 1

ON BEHALF OF THE BOARD OF DIRECTORS OF
ARCTIC STAR EXPLORATION CORP.

“Patrick Power”

Patrick Power, President & CEO
+1 (604) 218-8772
ppower@arcticstar.ca

This news release contains "forward-looking statements" including but not limited to statements with respect to Arctic Star’s plans, the private placement and the use of proceeds. Forward-looking statements, while based on management's best estimates and assumptions, are subject to risks and uncertainties that may cause actual results to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: risks related to the completion of the Private Placement and our plan to use all or some portion of the proceeds for exploration on the Diagras Diamond Project. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Factors that could affect our plans include the possibility that we do not receive final TSXV approval for the Private Placement or we are unable to raise all of the funds we are seeking to raise, in which event we may require all funds raised, if any, to be used for working capital rather than for exploration on the Diagras Diamond Project; and our proposed use of proceeds is subject to receipt of TSXV approval.  Accordingly, readers should not place undue reliance on forward-looking statements. Arctic Star undertakes no obligation or responsibility to update forward-looking statements, except as required by law.

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.

NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRE SERVICES

1 Such executive advertising package is designed to solely raise public awareness of the Company.

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