Blue Star Announces Closing of Non-Brokered Private Placement and Debt Settlements

Blue Star Gold Corp. (BAU) completed a non-brokered private placement, raising gross proceeds of $800,000 by issuing 4,000,000 common shares at $0.20 per share. Simultaneously, the company settled $127,798.66 in outstanding debts, which comprised past director services and unpaid finder's fees, by issuing 638,993 shares at the same $0.20 deemed price.

Both transactions are classified as related-party transactions under Multilateral Instrument 61-101, relying on exemptions from formal valuation and minority shareholder approval requirements. Dr. Georg Pollert, a director and controlling shareholder, participated in both the equity placement and the debt settlements. The issued shares carry a four-month and one-day hold period under Canadian securities laws, and the transactions remain subject to final TSX Venture Exchange approval.

Blue Star Gold Corp. (BAU) has raised $800,000 in a routine, incremental financing round intended to extend its working capital runway. The transaction is highly dilutive, adding over 4.6 million shares to the outstanding capitalization at a depressed price point. Additionally, a debt settlement further dilutes existing shareholders to extinguish minor liabilities, signaling an inability to service obligations through operational cash flow.

Historical progression shows a consistent pattern of small, frequent financings throughout 2025 and 2026, ranging from $600,000 to $3.95 million, underscoring the company's reliance on continuous equity issuance to fund exploration. This news aligns with the explicit going concern warning disclosed in the H1 2026 MD&A, confirming that management lacks sufficient working capital to cover administrative and exploration costs for the next 12 months without additional financing.

While the company advanced its exploration program with encouraging Phase 2 drill results at Auma (Bamako) and Nutaaq in August 2026, the immediate market impact of this financing is negative due to the dilution and liquidity constraints.

Blue Star Gold Corp. is an early-stage exploration company focused on gold and critical minerals in Nunavut, Canada. Its flagship asset is the Ulu Gold Project, which features the high-grade Flood Zone Deposit. A May 2026 mineral resource estimate defines 558,000 oz in Measured and Indicated categories at 7.87 g/t Au, and 476,000 oz Inferred at 4.54 g/t Au.

The company also holds the Auma Project, which has been expanded to 11,794 ha and targets high-grade gold and VMS deposits, as well as the Roma Project, which focuses on critical minerals and has been expanded to include the Sand Lake prospect. Additional holdings include the Hood River Property.

These projects are located 40-100 km south of the proposed Grays Bay deep-water port and all-weather road corridor. The company is currently in the exploration and resource expansion stage and has no revenue-generating operations.