September 2nd, 2016: Redstar Gold Corp. (TSX.V: RGC, US: RGCTF, FRA: RGG) ("Redstar" or the "Company") is pleased to announce it has entered into the Definitive Agreement with NV Gold Corporation (TSX.V:NVX) ("NVX"), finalizing the detailed terms of the Letter of Intent ("LOI") previously announced on August 2, 2016, under which NVX will acquire 100% of Redstar's exploration assets in Nevada. These assets consist of a 100% interest (less existing NSRs) in 11 exploration projects (the "Projects") in Nevada, as well as the AngloGold-Ashanti database (the "Database") purchased by Redstar in 2008.
"Redstar is pleased to have reached the Definitive Agreement stage with NV Gold and to officially hand over a solid portfolio of gold projects, along with an extensive database, focused in Nevada. The interest in NV Gold's future and strategy is clearly indicated by the strong interest and subsequent increase in the private placement in NVX. We look forward to being part of the team and large shareholder of NV Gold," commented Peter A. Ball, CEO of Redstar.
Under the terms of the Definitive Agreement, NVX will acquire the Database and the Projects in consideration of NVX issuing to Redstar 6,000,000 common shares of NVX and Redstar having the right to name two of a proposed 6 member board of NVX. Under the definitive agreement, NVX is required to raise CDN$350,000 within 90 days of the completion of the definitive agreement.
On August 11, 2016, NVX announced a private placement ("the Financing") of CDN$500,000, and NVX has subsequently announced on August 26, 2016 that the Financing was increased to CDN$550,000 based on a strong interest in the Company's strategy going forward, which includes the newly purchased assets in Nevada and experienced technical management team. John Watson, CEO of NVX has confirmed he will subscribe to a lead order of the placement for up to CDN$117,000.
John E. Watson, President of NVX, states: "With the completion of the Definitive Agreement, the path has been set for NVX to undertake its Project Generator business model. In addition to the 11 projects being acquired under this transaction, NVX will aggressively seek to add new projects in the Great Basin for its portfolio through the use of the Database and its in-house geologic experience. Projects will be made available on a lease, joint-venture or sale basis, or on a case-by-case basis, may be further explored by the Company."
In addition, at the completion of the Financing, if Redstar owns less than 29.9% of the outstanding shares of NVX, NVX would be required to issue Redstar additional shares of NVX to increase Redstar's share ownership of NVX shares to 29.9%. Assuming NV Gold completes the private placement for the full CDN$550,000, NVX will be required to issue Redstar an additional 172,730 shares under this provision. Redstar has proposed that its two nominees will be Mr. Peter A. Ball, Redstar's President and CEO and one of its directors, Mr. Ken Booth. Both men bring a deep background of technical and market expertise.
As highlighted in NVX's press release dated August 26, 2016, the Financing will consist of an offering of up to 2,750,000 units (the "Units") at CDN$0.20 per Unit. Each Unit consists of one Share and one-half of one Warrant exercisable at CDN$0.40 per share for two years from issue of the Units. The expiry date of each whole Warrant is subject to acceleration such that, should the volume weighted average price of the common shares of the Company exceed CDN$0.60 for ten consecutive trading days, the Company may notify the holder in writing that the Warrants will expire 20 trading days from receipt of such notice unless exercised by the holder before such date.
Final closing of the acquisition of the Nevada assets of Redstar is subject to customary conditions and such acquisition, as well as the private placement, are subject to receipt of all necessary regulatory approvals, including the approval of the TSX Venture Exchange (the "Exchange").
About Redstar Gold Corp
Redstar is a junior exploration company focused on high-grade gold exploration in North America. In Alaska, the Company is exploring the 100% controlled high-grade Unga Gold Project. In Nevada, Redstar has signed a Definitive Agreement with NV Gold Corp. to sell its Nevada portfolio and will receive 29.9% of NV Gold and 2 Board Seats at closing and approval of the transaction. Redstar also owns 30% of the Newman Todd Gold Project, in Red Lake, Ontario, Canada.
On Behalf of the Board of Directors,
Peter A. Ball, President and CEO
For additional information please contact:
Toll Free: 877.310.3330
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.
This news release includes certain forward-looking statements or information. All statements other than statements of historical fact included in this release, including, without limitation, statements regarding the proposed acquisition of the Properties and the Database and the terms of such acquisition, the proposed raising of up to CDN$550,000, the geological potential of or the potential to lease or joint venture any of the Properties, the generative value of the Database and other future plans and objectives of the Company, including exploration plans, are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's plans or expectations include regulatory issues, market prices, availability of capital and financing, general economic, market or business conditions, timeliness of government or regulatory approvals and other risks detailed herein and from time to time in the filings made by the Company with securities regulators. The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise except as otherwise required by applicable securities legislation.