Canstar finalizes JV for Mary March drill

Executive Summary

• Canstar Resources Inc. has finalized a definitive joint venture agreement with VMS Mining Corp. (VMSC) to advance the Mary March VMS project in Newfoundland.
• Canstar has received an initial $1.0-million non-dilutive cash payment, with a subsequent $4.0-million investment expected from VMSC to fund the 2026 drill program.
• The JV allows VMSC to earn up to a 65% interest in the project through staged investments totaling $11.5 million (plus an optional $500k), all of which are non-dilutive to Canstar’s corporate share capital.

Key Details

• JV Agreement: Finalized definitive agreement between Canstar Resources Inc. and VMS Mining Corp. (VMSC) for the Mary March volcanogenic massive sulphide (VMS) project.
• Initial Funding: Canstar received a $1.0-million non-dilutive cash payment within five days of the announcement.
• Future Funding: VMSC has an election to invest a subsequent $4.0-million, expected to be deployed for the planned 2026 drill campaign.
• Earn-In Structure: VMSC can earn up to a 60% interest (or 65% with option) via $11.5 million in strategic exploration expenditures, structured in three phases:
  • Phase 1: $1.5 million for 10% interest.
  • Phase 2: $4.0 million for an additional 30% interest.
  • Phase 3: $6.0 million for a further 20% interest.
• Option to Increase Interest: VMSC holds an option to invest an additional $500,000 in Phase 1 (totaling $2.0 million) to earn an incremental 5% interest, raising the total potential interest to 65%.
• Funding Mechanism: Initial Phase 1 funding was advanced via a non-recourse, unsecured bridge promissory note (interest-free) to facilitate immediate exploration activities. This will be settled upon the formation of a wholly owned subsidiary (JV corporation) via the issuance of 10% of its shares to VMSC.
• Use of Proceeds: Funds are restricted to exploration expenditures on the Buchans and Mary March projects, specifically advancing the winter technical program and drill readiness for the 2026 Newfoundland field season.
• Technical Leadership: Exploration is guided by Dr. Harold Gibson (VMSC VP, Exploration) and Dr. Rodney Allen, focusing on structural and stratigraphic controls in the Buchans volcanic package.
• Drill Readiness: The company is targeting a maiden modern drill campaign at the start of the 2026 exploration season.
• Historical Context & Targets:
  • Mary March is located ~25 km east of the historic Buchans mining camp (known for >20% combined base metals and significant Au/Ag).
  • Previous discovery drill hole intersected: 9.63 meters at 4.2 g/t Au, 122 g/t Ag, 10.1% Zn, 1.8% Pb, and 0.64% Cu.
  • New untested geophysical anomalies identified, including a 1.2-kilometer induced polarization (IP) chargeability trend.
• Partner Background: VMSC founders (John Burzynski, Patrick Anderson, Jose Vizquerra Benavides, Bernardo Alvarez Calderon) have collectively been associated with >$8 billion in corporate transactions and discoveries of >30 million ounces of gold globally (including Osisko, Aurelian, Dalradian).

Notable Quotes

• "Canstar believes that combining a proven high-grade district, a technically upgraded exploration model, non-dilutive asset-level funding and a leadership group with demonstrated discovery and monetization success positions the joint venture strongly as it advances toward its planned spring 2026 drill program."