April 13, 2017
Iron Butte Project Update, Share Consolidation and Financing
Vancouver, B.C., April 13, 2017. Desert Star Resources Ltd. (TSX-V: DSR) (“Desert Star” or the “Company”) announces that it has elected not to proceed with its proposed option to acquire the Iron Butte oxide gold-silver project in Nevada, as previously disclosed in its March 6, 2017 news release.
In addition, the Company has approved proposed changes to the Company’s share structure to consolidate its issued and outstanding common shares, and any securities convertible into common shares, on a two-for-one basis. Under the proposed consolidation, two existing common shares will be consolidated into one new common share. Outstanding convertible securities will be adjusted accordingly in terms of number and exercise price. The Company currently has 32,895,802 common shares issued and outstanding, which will be reduced to approximately 16,447,901 common shares. Fractional shares remaining after giving effect to the consolidation will be cancelled without compensation, such that the holdings of each shareholder will be rounded down to the nearest whole number of post-consolidation common shares.
The Company’s name will remain as “Desert Star Resources Ltd.” The Company’s articles permit the Board of Directors to authorize a consolidation. The Board of Directors determined that consolidation is necessary to make Desert Star’s share structure more facilitative for mineral project or acquisition transactions.
The Company will also conduct a private placement of up to 2,500,000 units (each a “Unit”) at a price of $0.20 per post consolidated Unit for gross proceeds up to $500,000. Each Unit consists of one common share of the Company and one transferable common share purchase warrant (“Warrants”). Each Warrant is exercisable into one common share in the capital of the Company for a period of 24 months from the date of issue, at an exercise price of $0.25 per common share. The Company is actively in the process of pursuing acquisitions in the resource sector and proceeds from the private placement will be used to fund due diligence and transaction costs on potential projects.
All private placement securities will be restricted from trading for a period of four months from closing. The private placement and share consolidation are subject to the approval of the TSX Venture Exchange (“TSXV”).
On behalf of the Board of
DESERT STAR RESOURCES LTD.
President and CEO, Desert Star Resources Ltd.
For further information regarding Desert Star, please email email@example.com or visit our website at www.desertstar.ca.
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.
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