Canstar Resources Enters into C$500,000 Director-Related Bridge Facility Secured Solely by Churchill Shares; Existing Bridge Note Repaid and Cancelled

Canstar Resources Inc. (ROX) has entered into a C$500,000 revolving bridge credit facility with BQS Systematic Equities LP, an entity controlled by director J. Paul Austin III. The facility is secured solely by a pledge of 15,834,097 Churchill Resources Inc. (CRI) shares and future receivables from the Golden Baie Project option, with no recourse to other company assets.

Interest accrues at 12% per annum and is payable monthly in CRI shares, valued at a 10-trading-day VWAP. The first three months' interest is prepaid in CRI shares, and a minimum six months' interest is fixed upfront. The initial C$500,000 advance was used to repay and cancel an existing promissory note of approximately C$339,600.

The facility has a nine-month term, with a potential commitment increase to C$2,500,000 or 24% of market capitalization, subject to independent director approval and TSX Venture Exchange acceptance. No Canstar securities are issuable under this facility. The transaction was approved by independent directors relying on MI 61-101 exemptions.

Canstar Resources Inc. (ROX) has executed a routine bridge extension to manage short-term liquidity and refinance existing debt, a move that does not introduce new dilutive equity or alter the company's operational trajectory. The financing terms are heavily weighted toward the lender, with interest paid in-kind in the stock of a third party, CRI. The facility is secured exclusively by assets already pledged under the Golden Baie option agreement, which limits Canstar’s ability to leverage those assets for future corporate financing.

The related-party nature of the facility requires scrutiny. Although approved by independent directors, the reliance on director-controlled capital highlights the company's constrained access to traditional debt markets. The news is fully in line with prior announcements regarding the bridge note structure and the Golden Baie option, providing temporary working capital without materially altering the capital stack or exploration timeline.

Canstar Resources Inc. (ROX) is a pre-revenue junior explorer focused on volcanogenic massive sulphide (VMS) and gold-antimony systems in Newfoundland and Sweden. Its flagship Mary March VMS Project is located approximately 25 km east of the historic Buchans mining camp. A discovery hole at the site intersected 9.63 m grading 4.2 g/t Au, 122 g/t Ag, 10.1% Zn, 1.8% Pb, and 0.64% Cu. Recent drilling in August 2026 returned 15.6 m at 2.3% CuEq, marking the widest massive sulphide intercept in the project's history.

The company has optioned the Golden Baie gold-antimony project to Churchill Resources and executed a non-binding letter of intent to acquire three exploration permits in Sweden's Skellefte VMS district. This activity expands its land package to approximately 68,000 hectares. Additionally, Canstar Resources has partnered with Terra AI, backed by Khosla Ventures and Rio Tinto, to apply machine learning for drill targeting and 3D modeling at Mary March.