Canstar Ramps Up Critical Minerals Exploration With Initial Payment from $11.5M Strategic Exploration JV

Rhea-AI Summary

Canstar Resources (CSRNF) has received the initial $500,000 payment from an $11.5M strategic exploration joint venture with VMS Mining Corporation to explore critical metals in Newfoundland. The deal allows VMSC to earn up to 60% ownership through $10M in follow-on investments. The JV focuses on the Buchans and Mary March VMS projects, located in a historically prolific mining district. Phase 1 involves a $1.5M investment for a 10% stake, valuing the projects at $15M pre-money. The exploration is led by renowned VMS expert Dr. Harold Gibson and includes deep IP geophysics, surveys, trenching, and 3D modeling. Historic mining in the area yielded exceptional grades, with the Buchans mines producing 16.2M tonnes at 14.51% zinc, 7.56% lead, 1.33% copper, 122 g/t silver, and 1.37 g/t gold. Canstar retains 100% ownership of its Golden Baie gold-antimony project.

Positive

• Non-dilutive $11.5M strategic investment partnership secured with industry veterans
• Initial $500,000 received to commence immediate exploration work
• Strong validation from VMSC's leadership team with track record of $4.1B in acquisitions
• Projects located adjacent to historically high-grade VMS deposits
• Led by renowned VMS expert Dr. Harold Gibson

Negative

• Company could lose up to 60% ownership in the JV projects through VMSC's earn-in
• No guarantee of finding similar deposits to historical mines
• Early-stage exploration project with no defined resource yet

TORONTO, May 27, 2025 (GLOBE NEWSWIRE) -- (TSXV: ROX) (OTCPK: CSRNF) Canstar Resources Inc. is ramping up critical metals exploration in Newfoundland with the receipt of the initial $500,000 tranche of its previously announced $11.5M strategic exploration joint venture with VMS Mining Corporation (“VMSC”). The non-dilutive investment positions Canstar to aggressively pursue the discovery of new, high-grade polymetallic (copper-zinc-lead-gold-silver) mineralization at its Buchans and Mary March volcanogenic massive sulphide (“VMS”) projects, located in one of Canada's most prolific historic mining camps.

“We have made meaningful progress. We are fortunate to operate in Newfoundland, where the exploration-friendly permitting process underpins our ability to move quickly and decisively,” said Juan Carlos Giron Jr., President & CEO of Canstar Resources. “This initial $500,000 investment allows us to ramp up work immediately, without the issue of new share capital, and signals strong commitment from VMSC’s leadership and technical team. The Buchans District has hosted some of the world’s highest-grade VMS deposits.¹ Our teams believe the project area holds enormous exploration potential based on historic production and current geological indicators.”

• $500,000 received to commence Phase 1
• Key permits received for trenching and airborne geophysics
• Total Phase 1 investment: $1.5M (asset-level) for 10% JV stake, valuing the JV projects at $15M pre-money
• Industry-leading VMS geologist Dr. Harold Gibson is leading the exploration activities
• Work underway: Deep IP geophysics continues at Buchans; Mary March to commence with geophysics surveys, trenching, mapping and advanced 3D data modeling for target generation
• Canstar retains 100% ownership of its Golden Baie gold-antimony project

Under the agreement, VMSC can earn up to 60% ownership of the JV through optional follow-on investments totaling $10 million across Phase 2 and Phase 3. Canstar retains the right to participate pro-rata in future phases to maintain a significant ownership position.

About VMS Mining Corporation

Established to develop Tier 1 VMS deposits globally, VMS Mining Corporation is a technically driven private corporation led by some of the most respected names in the mining industry, including founders, directors and executives behind Osisko Mining Inc., O3 Mining Inc., Aurelian Resources, and Dalradian Resources—companies with a collective track record of over $4.1 billion in acquisition value.

VMSC’s management and board are comprised of exploration leaders including founder and CEO Mr. Bernardo Álvarez Calderón (Director, Osisko Mining Inc. & O3 Mining Inc.), Mr. Patrick Anderson (Founder/CEO, Aurelian Resources Inc. & Dalradian Resources Inc.; Director, Osisko Mining Inc. & O3 Mining Inc.), Mr. John Burzynski (Chairman, O3 Mining Inc.; CEO/Director, Osisko Mining Inc.; Director, Osisko Gold Royalties Ltd.) and Mr. José Alberto Vizquerra Benavides (Founding Director, Osisko Mining Inc.; CEO/Director of O3 Mining Inc.). Collectively, Osisko Mining Inc., O3 Mining Inc., Aurelian Resources Inc., and Dalradian Resources Inc. were acquired in transactions totalling over $4.1 billion.

Renowned Exploration Leadership

Dr. Harold Gibson, VMSC’s VP-Exploration, is widely recognized as a leading global authority on VMS deposits, bringing 40+ years of VMS expertise. He has published more than 100 peer-reviewed publications. He is the recipient of the William Harvey Gross Award, the Duncan R. Derry Medal from the Mineral Deposits Division of the Geological Association of Canada, the Barlow Memorial Medal, the Julian Boldy Memorial Award from the Canadian Institute of Mining, Metallurgy and Petroleum, and the Research Excellence Award from Laurentian University. Dr. Gibson was the Director of the Mineral Exploration Research Centre (MERC) and the Scientific Lead and Founding Director of the Metal Earth Research Project—Canada’s unprecedented $104 million public-private mineral exploration research initiative.

Historic Mining Pedigree: Additional Information on Canstar’s Buchans and Mary March Projects

Canstar’s Buchans and Mary March Projects are located in the Buchans-Roberts Arm Belt of west-central Newfoundland, Canada. Recognized as one of the highest-grade VMS systems in history, Buchans was mined by ASARCO from the 1920s to the 1980s. Five deposits yielded 16.2 million tonnes with average mill head grades of 14.51% zinc, 7.56% lead, 1.33% copper, 122 g/t silver, and 1.37 g/t gold² (these deposits are not on Canstar Claims and are described to indicate the potential of the area).  

Canstar’s Buchans Project sits immediately adjacent to the historic Buchans mines, all 5 deposits are within 0 to 2,500 m of the Canstar licenses. New 3D geological modelling (2024) by Canstar suggests that the Buchans River Formation, the geological host unit for all five historic Buchans Mine deposits, underlies Canstar’s Buchans property at depth. It is possible, but not certain, that deposits similar-to those mined nearby at Buchans occur beneath Canstar’s Buchans-area claims.

A SkyTEM time-domain electromagnetic survey in 2017³ identified several multi-kilometre geophysical anomalies within Canstar’s Buchans claims. The anomalism coincides with an area of low magnetism, indicating a potential alteration zone. A historic drillhole from the 1970s—located within one of these anomalies—intersected what was described as “stockwork style” mineralization. Stockwork zones typically exhibit a geophysical signature characterized by low magnetism, variable (generally poor to moderate) electrical conductivity, and good chargeability. These characteristics are similar to the geophysical attributes of the stockwork zones of the historic Buchans deposits, suggesting the potential discovery of stockwork and alteration zones associated with Buchans-style VMS deposits.

Canstar’s Mary March project—25km east of the historic Buchans mines—hosts a large mineralized system with alteration zones similar in scale to those at Buchans and high-grade massive sulphides. Historic drilling intersected a faulted-off massive sulphide lens 9.63 m thick, assaying 0.64% Cu, 1.8% Pb, 10.1% Zn, 4.2 g/t Au, 122 g/t Ag.⁴ Canstar trenching in 2019 identified Buchans-style debris flow deposits with massive sulphide clasts, which assayed up to 5.7% Cu, 1.6% Pb, 1.8% Zn, 29.4 g/t Ag, 1.2 g/t Au.⁵

Qualified Person Statement

Bob Patey B.Sc. (Hons), Vice President for Exploration for Canstar and a Qualified Person as defined in NI 43-101, has prepared and approved all scientific and technical information disclosed in this news release.

Acknowledgement

Canstar acknowledges the financial support of the Junior Exploration Assistance (JEA) Program from the Government of Newfoundland and Labrador Department of Industry, Energy and Technology, which has been a valuable contribution to the exploration programs on the Company’s Buchans-Mary March and Golden Baie projects.

About Canstar Resources Inc.

Canstar Resources Inc. (TSXV: ROX) is an exploration company focused on critical minerals and gold. The Company’s 100%-owned Golden Baie Project (489.5 km2) hosts high-grade gold and antimony showings along a major mineralized structure that also hosts a large number of gold deposits. The Buchans and Mary March projects (122.5 km2) are located within the historic past-producing VMS zinc-, copper-, and silver-rich Buchans Mining Camp and boast high-grade zinc and copper discoveries.

For further information, please contact:

Juan Carlos Giron, Jr.
President & Chief Executive Officer
Email: jc@canstarresources.com
Phone: (647) 557-3442
Website: www.canstarresources.com

Neither 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 includes certain “forward-looking statements” that are not comprised of historical facts. Forward-looking statements include estimates and statements that describe the Company’s plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Forward-looking statements may be identified by such terms as “believes,” “anticipates,” “expects,” “estimates,” “may,” “could,” “would,” “will,” or “plan.” Since forward-looking statements are based on assumptions and address future events and conditions, they involve inherent risks and uncertainties. Although these statements are based on information currently available to the Company, the Company does not assure that actual results will meet management’s expectations. Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Forward-looking information in this news release includes, but is not limited to, the Company’s objectives, goals or plans, statements, exploration results, potential mineralization, the estimation of mineral resources, exploration and mine development plans, the timing of the commencement of operations and estimates of market conditions. Factors that could cause actual results to differ materially from such forward-looking information include, but are not limited to failure to identify mineral resources, failure to convert estimated mineral resources to reserves, the inability to complete a feasibility study which recommends a production decision, the preliminary nature of metallurgical test results, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, political risks, inability to fulfill the duty to accommodate First Nations and other indigenous peoples, uncertainties relating to the availability and costs of financing needed in the future, changes in equity markets, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects, capital and operating costs varying significantly from estimates and the other risks involved in the mineral exploration and development industry, including but not limited to the price of commodities, capital market conditions, restriction on labour and international travel and supply chains, and those risks set out in the Company’s public documents filed on SEDAR. Although the Company believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release. No assurance can be given that such events will occur in the disclosed time frames or at all. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.

Citations

1) Piercey, S.J., Peter, J.M., and Herrington, R., 2015. Zn-rich volcanogenic massive sulfide (VMS) deposits. In Current perspectives on zinc deposits. Edited by S.M. Archibald and S.J. Piercey. Irish Association for Economic Geology, Dublin. pp. 37–58.

2) Wardle, R.J., 2008: Zinc and Lead. Government of Newfoundland and Labrador, Department of Mines and Energy, Geological Survey, Mineral Commodities Series 1, 11 pages.

3) Seymour, C., 2017: First, second and third year assessment report on compilation, modelling, re-logging of diamond drill core and geological and geochemical exploration for licences 22217M, 22222M, 23555M, 23588M, 23589M, 23590M, 23591M, 23592M, 24172M, 24921M, 24922M, 24998M and 25386M on claims in the Buchans to Buchans Junction area, central Newfoundland. Adventus Newfoundland Corporation, Newfoundland and Labrador Geological Survey, Assessment File NFLD/3386, 264 pages.

4) Jagodits, F.L. and Thurlow, J.G., 2000: Assessment report on geological, geochemical, geophysical and diamond drilling exploration for 1999 submission for the Anglo-Newfoundland Development Company Limited Charter, fee simple grant Volume 2 Folio 29 and Reid Lot 247, and for first and ninth year assessment for licence 4117 on claim block 8058 and licences 6967M-6970M on claims in the Buchans Junction area, central Newfoundland, 2 reports. Phelps Dodge Corporation of Canada Limited and Noranda Mining and Exploration, Newfoundland and Labrador Geological Survey, Assessment File 12A/1026, 342 pages. (historic unverified assays)

5) Patey, B., 2020: First, Third, Fourth and Eighth Year Assessment Report on Compilation and Prospecting on licences and fee simple lots in the Buchans area, central Newfoundland. Canstar Resources Incorporated and Glencore Canada Plc. Newfoundland and Labrador Geological Survey, Assessment File 12A/1905, 2020, 36 pages.

FAQ

What is the value of CSRNF's joint venture with VMS Mining Corporation?

The strategic exploration joint venture is valued at $11.5M, with an initial $500,000 payment received and potential follow-on investments of $10M across Phase 2 and 3.

How much ownership can VMS Mining Corporation earn in Canstar's projects?

VMS Mining Corporation can earn up to 60% ownership through optional follow-on investments totaling $10 million across Phase 2 and Phase 3.

What were the historical production grades at the Buchans mines near CSRNF's property?

The historic Buchans mines produced 16.2M tonnes with grades of 14.51% zinc, 7.56% lead, 1.33% copper, 122 g/t silver, and 1.37 g/t gold.

Who is leading the exploration program for CSRNF's VMS projects?

Dr. Harold Gibson, a leading global authority on VMS deposits with 40+ years of expertise, is leading the exploration activities as VMSC's VP-Exploration.

What is the pre-money valuation of CSRNF's JV projects?

The JV projects are valued at $15M pre-money, based on VMSC's Phase 1 investment of $1.5M for a 10% stake.