Western Star secures $5 million equity facility, shares up
Western Star Resources Inc. [WSR-CSE] said Tuesday it has secured a $5 million institutional equity capital facility from Crescita Capital LLC, a move that represents major institutional backing for Western Star, the company said in a press release.
The company’s shares rallied on the news, rising 12.50% or $0.015 to 13.5 cents. The shares are currently trading in a 52-week range of 30 cents and $0.05.
Western Star Resources is a mineral exploration and development company. It owns nine non-surveyed contiguous mineral claims covering 2,797 hectares in the Revelstoke mining district of British Columbia. The company recently said drill permits are in place until July 05, 2026 for the Western Star property group, which is located 50 kilometres southeast of Revelstoke and roughly 10 kilometres north of the abandoned community of Camborne.
The area is renowned for its abundant reserves of precious and base metals, including gold, silver, copper and lead.
Western Star CEO Black Morgan said the financing will be used to fund multiple drill programs. “We will continue to crunch data and have some more news regarding these assets and drill targets coming shortly,’’ he said.
Crescita Capital is an investment and consultancy group that offers funding and corporate development services for growth companies around the world.
Referring to the $5 million equity capital facility, Morgan said he is thrilled to have received this level of institutional backing in the company’s first year of listing. “The plan is simple – explore and drill,’’ he said. “Our Western Star Property has drill permits in place and 6.0 kilometres of surface mineralization and some bonanza grades.
Western Star can draw down funds from the Equity Investment Facility from time to time during the three-year term at its discretion by providing notice to Crescita Capital and issuing common shares to Crescita in exchange.
The shares issued in connection with any private placement will be priced at 85% of the average closing bid price resulting from the following 10 days of trading after the drawdown notice, subject to the pricing requirements of the Canadian Securities Exchange. The drawdown notice amount requested by Western Star cannot exceed 500% of the average daily trading volume of the pricing period.
The Equity Investment Facility is being made available under the terms of an amended and restated investment and advisory agreement between the company and Crescita, under which Crescita will also provide certain advisory services to the company.
Under the agreement, the company paid a commitment fee to Crescita by issuing 1.7 million common shares at 15 cents per share as well as 941,800 transferable warrants, each of which is exercisable at $0.15 for three years.
The fee warrants will vest and become exercisable on a one-to-one basis with each common share issued to Crescita Capital under private placements from time to time.