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."
