Redstar Gold Corp. (TSX.V:RGC) (the "Company") has a letter agreement with Strategic Merchant Bancorp Ltd ("SMB") giving SMB the right to earn up to 70% of the Company's Dry Gulch project. This agreement demonstrates Redstar's ability to acquire high quality gold projects in Nevada and to attract aggressive partners to further develop these projects.
To acquire a 60% interest in the Pine Nut project, SMB must pay $90,000 in cash, issue 450,000 shares and make expenditures of $2,000,000 over four years. SMB must spend an additional $1,000,000 to earn an additional 10% interest. Redstar will remain as operator during the life of this option agreement.
The Dry Gulch project is a large land package strategically located within the Carlin trend in central Nevada. The project lies within six miles of over 24 million ounces of gold production and reserves. Geophysics indicates favorable structures can be traced from known deposits to the project area and recent mapping has indicated the presence of favorable host rocks. The Dry Gulch project represents a unique opportunity to acquire a large, well positioned project within one of the most productive gold trends in the world.
The Dry Gulch project was acquired based on data made available to Redstar through an exclusive agreement between Redstar and AngloGold Ashanti. This agreement (previously announced Oct. 6, 2005) gives Redstar the exclusive rights to AngloGold Ashanti's entire Nevada database. Redstar is confident this agreement will result in a continuous pipeline of projects being developed in Nevada.
Scott Weekes, president of Redstar states: "This agreement shows Redstar's commitment to be a significant player in the Nevada exploration scene. Redstar believes the most effective way to utilize the AngloGold Ashanti database is target projects for acquisition and develop them through joint venture relationships. The completion of this agreement and our up coming work program on the Newman Todd project in Red Lake, Ontario give Redstar share holders exposure to two extremely exciting active gold regions."
The foregoing is subject to regulatory acceptance.
On Behalf of the Board,
Redstar Gold Corp
The TSX Venture Exchange has not reviewed and does not accept the responsibility for the adequacy or accuracy of this news release.