Eric Sprott has agreed to acquire 30 million common shares of Redstar Gold in part through a private placement of up to 41 million shares at CAD0.10.
Redstar Gold has filed for the financing, which is a non-brokered equity private placement.
The financing will be composed of two tranches. The first tranche of 20.4 million shares at CAD0.10 is expected to close this week. In the second tranche, the company will issue up to 20.6 million shares at CAD0.10, or CAD2.06 million. The full financing is expected to close on, or before, 31 August 2016. Upon final and full closing of the financing, Sprott will control approximately 30.0 million shares, or 12.1 per cent of the company.
Jacques Vaillancourt, chairman of Redstar will also invest in the private placement. No warrants will be offered in respect to the financing.
"Mr. Sprott is a highly respected and well known leader in the resource investment community and one of the world's premiere gold and silver investors. The company will begin plans to initiate its next drilling program on the high-grade Shumagin Gold Zone at our 100 per cent controlled Unga Gold Project in Alaska," says Peter A. Ball, president and CEO of Redstar Gold.
The proceeds from the financing will be used to commence drilling at the Shumagin Gold Zone, continue exploration across other known gold zones at the Company's Unga Gold Project, complete a NI 43-101 Technical Report at the Unga Gold Project, and for general working capital.
The closing of the financing is expected to occur on or before 26 August and is subject to the completion of formal documentation and receipt of regulatory approvals, including the approval of the Toronto Stock Exchange.
Sprott is acquiring the shares for investment purposes. It has a long-term view of the investment and may acquire additional shares either on the open market or through private acquisitions or sell the shares either on the open market or through private dispositions in the future depending on market conditions, reformulation of plans and/or other relevant factors.
The common shares issued pursuant to the financing shall be subject to a four-month hold period from the closing date of the financing in accordance with applicable securities legislation.
