Blue Star Gold announces non-brokered private placement of debenture unit
21 May 2020
Blue Star Gold Corp. announces a non-brokered private placement (the "Private Placement") of up to 4,000 units of the Company (the "Units") at a price of $1,000 per Unit for aggregate gross proceeds of up to $4,000,000, with a minimum subscription of $50,000, or 50 Units per subscriber. Each Unit is comprised of 20,000 unsecured convertible debenture (the "Debentures") and 20,000 non-transferable common share purchase warrants ("Warrants") of the Company.
Each Debenture has a maximum term of 3 years (the "Term") and will bear an annual simple interest rate of 7.5%. During the first year of the Term, the principal amount of each Debenture may be converted by the holder, for no additional consideration, into common shares (the "Shares") of the Company at a conversion price of $0.05 per Share and $0.10 per Share during the second and third years of the Term.
Each Warrant entitles the holder to purchase one additional Share at an exercise price of $0.075 per Share until the expiry date of the Term.
In the event that the Company is unable to obtain authorization from the Government of Nunavut to commence its 2020 summer exploration program on the Company's properties by July 15, 2020, the Company shall forthwith notify the holders, cancel the Debentures and refund the principal amount of the Debentures to the holders, together with accrued interest, and any Warrants forming part of the Units will automatically expire.
Finders fees of 5% cash and 5% finder's shares (the "Finder's Shares") equal to 5% of the dollar value of the Units, may be payable to qualified parties. The Finder's Shares will be priced at $0.05 per Finder's Share.
The Company intends to use the proceeds from the Private Placement for the exploration and development of the Company's mineral projects and for general working capital.
All securities issued are subject to a four month hold period pursuant to securities laws in Canada. The Private Placement is subject to the approval of the TSX Venture Exchange.