Vancouver, B.C. April 22, 2015: (TSXV: DSR) (“Desert Star” or the “Company”) announces that it has entered into an option agreement (the “Option Agreement”) for the purchase of the Fortuna #1 and Fortuna #2 patented lode mining claims, situated in the Pioneer Mining District, Pinal County, Arizona (the “Property”). These patented lode claims reside within the Company’s Copper King project area (figure 1).
Terms of the Option Agreement include the payment of $10,000 USD and the issuance of 25,000 common shares of the Company within 10 business days of TSX Venture Exchange (“Exchange”) approval. The option will be for a period of 12 months, with the Company having the right to extend the option for a further 12 months by paying an additional $15,000 USD to the sellers. The Company may elect to purchase the Property in full within the option period by paying an additional $50,000, issuing an additional 25,000 shares and granting a 1% net smelter return royalty (“NSR”) to the sellers. The NSR can be bought by the company by paying $100,000 USD any time prior to construction of a production facility.
The Option Agreement and all securities to be issued under the Option Agreement are subject to the approval of the Exchange and, assuming approval, will be legended with a four month and a day hold period and such other restrictions as may be applicable to the sellers resident in the U.S.
The Company also announces, subject to Exchange approval, the proposed extension of previously granted share purchase warrants, from two separate private placements. Warrants entitling the purchase of 5,843,888 common shares of the Company at a price of $0.25, will have their exercise term extended by one year from July 28, 2015 to July 28, 2016. Warrants entitling the purchase of 833,333 common shares of the Company at a price of $0.40, will have their exercise term extended by one year from August 24, 2015 to August 24, 2016.
The Company also announces the repricing of certain stock options that were formerly options of Providence Resources Corp. (“Providence”), before the amalgamation of Providence and Desert Star to form the Company. The proposed repricing was disclosed in the joint information circular for Providence and Desert Star dated March 5, 2015 and received disinterested shareholder approval at the annual general and special meeting of Providence held on April 8, 2015. Please refer to the joint information circular available on www.sedar.com under the profiles of Providence and Desert Star for more information. A total of 960,000 stock options will be repriced, of which 530,000 options are held by insiders of the Company. The stock options will be repriced at prices ranging from $0.20 to $0.30.
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.
Cautionary Note Regarding Forward-Looking Statements
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.
This news release contains certain statements that may be deemed “forward-looking statements”. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words “expects”, “plans”, “anticipates”, “believes”, “intends”, “estimates”, “projects”, “potential” and similar expressions, or that events or conditions “will”, “would”, “may”, “could” or “should” occur. Although Desert Star believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance, are subject to risks and uncertainties, and actual results or realities may differ materially from those in the forward-looking statements. Such risks and uncertainties include, but are not limited to, Desert Star’s ability to raise sufficient capital to fund its obligations under its property option agreements and for general working capital purposes; changes in economic conditions or financial markets; the ability of Desert Star to obtain the necessary permits and consents required to explore and develop the projects; the ability of Desert Star to drill for and find mineral resources, and monetize any mineral resources discovered or acquired; and changes in environmental and other laws or regulations that could have an impact on the Company’s operations. Forward-looking statements are based on the beliefs, estimates and opinions of Desert Star’s management on the date the statements are made. Except as required by law, Desert Star undertakes no obligation to update these forward-looking statements in the event that management’s beliefs, estimates or opinions, or other factors, should change