17 June 2020
Blue Star Gold Corp. announces that it has entered into unsecured loan agreements (the "Loan Agreements") with certain parties for an aggregate principal amount of $1,000,000 (the "Loans"). The Loans bear an annual simple interest rate of 7.5%.
Pursuant to the Loan Agreements and subject to the approval of the TSX Venture Exchange, the Company has agreed to issue up to 4,000,000 common shares (the "Bonus Shares") of the Company at a deemed price of $0.05 per Bonus Share. The aggregate number of Bonus Shares equal 20% of the principal amount of the Loans.
Dr. Georg Pollert, a director and controlling shareholder of the Company, will receive up to 3,000,000 Bonus Shares. As a result, the issuance of the Bonus Shares is a related party transaction (as defined under Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions ("MI 61-101")). The Company relied upon the "Fair Market Value Not More Than $2,500,000" exemption from the formal valuation and minority shareholder approval requirements, respectively, under MI 61-101.