Desert Star Closes $14.6 Private Placement of Subscription Receipts

2017-12-08 / @accesswire

VANCOUVER, BC / ACCESSWIRE / December 8, 2017 / Desert Star Resources Ltd. (TSX-V: DSR) ("Desert Star" or the "Company") is pleased to announce that it has closed a private placement of 22,498,807 subscription receipts of the Company's wholly-owned subsidiary, Desert Star Holdings Corp., previously announced on November 2, 2017, for aggregate gross proceeds of $14,624,224.55 ( the "Offering").

Each subscription receipt was priced at $0.65 and entitles the holder to ultimately receive one unit of the Company consisting of one common share of the Company and one-half of one common share purchase warrant with each whole warrant entitling the holder to acquire an additional common share of the Company at $1.00 per share for 36 months following conversion of the subscription receipts into the underlying units.

Proceeds of the Offering will be held in escrow pending conversion of the subscription receipts upon satisfaction of certain conditions precedent, including completion of all conditions precedent for the proposed acquisition of the Kutcho Project discussed below. If the conversion of the subscription receipts does not occur before 5:00 pm (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. The subscription receipts are subject to a hold period of four months and one day from closing. The common shares and warrants of the Company issuable upon conversion of the subscription receipts will be free from resale restrictions under applicable securities laws.

In connection with the Offering, Macquarie Capital Markets Canada Ltd. acted as lead agent on behalf of a syndicate of agents including BMO Capital Markets, Haywood Securities Inc., and PI Financial Corporation (the "Agents"), who sold an aggregate of 11,715,615 Subscription Receipts for aggregate gross proceeds of $7,615,149.75 on a brokered-basis. An additional 10,783,192 subscription receipts were sold on a non-brokered under the Offering basis for aggregate gross proceeds of $7,009,074.80. At the time of conversion of the subscription receipts, the Agents will be entitled to receive a 6% cash commission and non-transferable broker warrants ("Broker Warrants") to purchase an aggregate of 346,853 common shares for 24 months at $0.65 per share. In addition, certain arm's length finders will be entitled to aggregate finders fees totaling $256,065.85, and an aggregate of 171,425 Broker Warrants.

The Company is also pleased to announce that it has received conditional approval from the TSX Venture Exchange (the "Exchange") for the acquisition (the "Acquisition") of the Kutcho high grade copper-zinc- silver-gold project (the "Kutcho Project") from Capstone Mining Corp., previously announced by the Company on June 15, 2017. In connection with the receipt of Exchange approval for the Acquisition, the Company has filed with the Canadian securities regulators and the Exchange an independent technical report prepared in accordance with "Prefeasibility Study Technical Report on the Kutcho Project, British Columbia" (the "Technical Report") which has an effective date of June 15, 2017 and a report date of July 31, 2017, a copy of which can be found under the Company's profile at www.SEDAR.com. The Technical Report and author consents, therefore, contain updated consent language required under the policies of the Exchange, but does not otherwise differ from the Prefeasibility study previously filed by the Company on July 31, 2017 (the "July 2017 PFS") and there has been no change to the mineral resource estimates contained in the July 2017 PFS.

The Company is also pleased to announce it has appointed Stephen Quinn, Bill Bennett, and Jay Sujir to the Company's board of directors and has appointed Allison Rippin Armstrong as Vice President of Community & Environment. Keith Henderson and Chris Taylor have resigned from the Company's board of directors. The Company wishes to extend its gratitude to Keith and Chris for their years of service. Gavin Cooper also resigned from the Company's board of directors but will remain in his role of Chief Financial Officer of the Company.

In connection with the closing of the Acquisition, the Company plans to change its name to Kutcho Copper Corp. and will change its trading symbol to "KC."

Completion of the Acquisition is subject to a number of conditions precedent, including, without limitation, the receipt of all regulatory approvals, including the final acceptance of the Exchange.

Vince Sorace
President and CEO, Desert Star Resources Ltd.

For further information regarding Desert Star, please email info@desertstar.ca, or visit our website at www.desertstar.ca.

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.

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) accept responsibility for the adequacy or accuracy of this release.

This news release contains certain statements that may be deemed "forward-looking statements" with respect to the Company within the meaning of applicable securities laws, including statements with respect to the proposed acquisition of the Kutcho Project, private placement and related financing arrangements with Wheaton Precious Metals, estimated mineral resources and mineral reserves, the timing and amount of estimated production, costs of production, capital expenditures, commodity price assumptions, the Company's ability to successfully obtain all regulatory approvals and permits to commence and conduct mining operations, environmental risks and title challenges. 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 Desert Star believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance, are subject to risks and uncertainties, and actual results or realities may differ materially from those in the forward-looking statements. Such material risks and uncertainties include, but are not limited to, Desert Star's ability to negotiate a final binding transaction agreements, obtain all requisite approvals for the proposed acquisition of the Kutcho Project, private placement and related financing arrangements with Wheaton Precious Metals, including approval of the TSX Venture Exchange, the Company's ability to raise sufficient capital to fund its obligations under the proposed acquisition of the Kutcho Project or under its property agreements going forward, to maintain its mineral tenures and concessions in good standing, to explore and develop the Kutcho Project or its other projects, to repay its debt and for general working capital purposes; changes in economic conditions or financial markets; the inherent hazards associates with mineral exploration, and mining operations, future prices of copper and other metals, changes in general economic conditions, accuracy of mineral resource and reserve estimates, the ability of Desert Star to obtain the necessary permits and consents required to explore, drill and develop the Kutcho Project and if obtained, to obtain such permits and consents in a timely fashion relative to Desert Star's plans and business objectives for the projects; the general ability of Desert Star to monetize its mineral resources; and changes in environmental and other laws or regulations that could have an impact on the Company's operations, compliance with environmental laws and regulations, aboriginal title claims and rights to consultation and accommodation, dependence on key management personnel and general competition in the mining industry. Forward-looking statements are based on the reasonable beliefs, estimates and opinions of Desert Star's management on the date the statements are made. Except as required by law, Desert Star undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors, should change.

United States Advisory

The securities referred to herein have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), have been offered and sold outside the United States to eligible investors pursuant to Regulation S promulgated under the U.S. Securities Act, and may not be offered, sold, or resold in the United States or to, or for the account of or benefit of, a U.S. Person (as such term is defined in Regulation S under the United States Securities Act) unless the securities are registered under the U.S. Securities Act, or an exemption from the registration requirements of the U.S. Securities Act is available. Hedging transactions involving the securities must not be conducted unless in accordance with the U.S. Securities Act. This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in the state in the United States in which such offer, solicitation or sale would be unlawful.

SOURCE: Desert Star Resources Ltd.