Greystar Resources Ltd.

Greystar Resources Ltd.

August 31, 2009 19:20 ET

Greystar Resources Ltd. Files Preliminary Short Form Prospectus

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 31, 2009) -


Greystar Resources Ltd. (the "Company") (TSX:GSL)(AIM:GSL) announced today that it has filed a preliminary short form prospectus (the "Preliminary Prospectus") with the securities regulatory authorities in the Provinces of British Columbia, Alberta, Ontario and Nova Scotia in connection with a best efforts offering of units ("Units") of the Company (the "Offering") for gross proceeds of up to $55 million subject to a 15% over-allotment option.

Each Unit will consist of one common share of the Company (a "Common Share") and one-half of one transferable common share purchase warrant (a "Warrant"). Subject to the acceleration right described below, each whole Warrant will entitle the holder to purchase one Common Share for a period of 12 months following the date of closing of the Offering. If, at any time, the closing price of the Common Shares on the Toronto Stock Exchange is greater than a price to be determined on pricing of the Offering for 20 or more consecutive trading days, the Company has the right, on notice to the warrantholders, to accelerate the expiry date of the Warrants to 20 business days following the date of such notice.

The net proceeds of the Offering will be used to advance the Company's Angostura Gold-Silver Project, including completion of phase two of the definitive feasibility study, initial design, further exploration and for working capital purposes.

The Offering will be led by Jennings Capital Inc, with a syndicate comprising Scotia Capital Inc., and GMP Securities L.P. (collectively, the "Agents"). Final pricing and determination of the number of Units to be sold pursuant to the Offering will occur immediately prior to the filing of the final short form prospectus in respect of the Offering.

The Offering is subject to certain conditions including, but not limited to, the execution of a definitive agency agreement with the Agents and the receipt of all necessary approvals, including the approval of the Toronto Stock Exchange and the applicable securities regulatory authorities.

About Greystar Resources Ltd.

Greystar Resources Ltd. is a precious metals exploration and development company that is currently completing a feasibility study on its wholly owned, multi-million ounce Angostura gold-silver deposit in northeastern Colombia. A positive prefeasibility study announced on March 25, 2009 envisions average annual production at Angostura of 511,000 ounces of gold and 2.3 million ounces of silver over a 15 year mine life. Using a base case gold price of US$700/oz in the first three years of operation and US$650/oz thereafter, the prefeasibility study estimates that the pre-tax after government royalty net present value (NPV) at a 6% discount is US$558 million generating an internal rate of return of 19.0%. Using a gold price of US$750/oz for the life of mine, the NPV at a 6% discount is US$942 million with an internal rate of return of 24.9%.

Based on the December 2008, resource update estimation, the Angostura deposit hosts a measured resource of 148.9 million tonnes grading 0.78 gram gold for 3.736 million contained ounces of gold; an indicated resource of 182 million tonnes grading 1.34 grams gold for 7.813 million contained ounces of gold. Combined, the measured and indicated resources host 11.5 million ounces of gold in 330.9 million tonnes of material grading 1.09 grams gold per tonne, plus an inferred resource of 3.472 million ounces of gold in 90.8 million tonnes grading 1.11 grams gold per tonne. Resource estimation was undertaken in compliance with CIM mineral resource and mineral reserve definitions that are referred to in National Instrument 43-101 - Standards of Disclosure for Mineral Projects. A location map of the Angostura drilling, along with a map of the underground tunnel work and an updated concession map, can be accessed from the Company's home page link at Greystar's website.

This press release is not an offer of securities for sale or solicitation of an offer of securities for sale in the United States or in any other jurisdiction in which such offer, solicitation or sale would be unlawful. The Company's securities have not been, nor will be, registered under the United States Securities Act of 1933, as amended,( the "US Securities Act") or state securities laws and may not be offered or sold in the United States or to US persons absent registration under the US Securities Act and state securities laws or applicable exemptions from the registration requirements of such laws.

Forward-Looking Statements

Certain statements in this press release are "forward-looking" within the meaning of Canadian securities legislation. They include statements regarding completion of the Offering, the use of proceeds of the proposed financing, anticipated annual production, estimated net present value and internal rate of return and estimated mineral resources. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company, are inherently subject to significant business, economic, competitive, political and social uncertainties and other contingencies. Many factors could cause the Company's actual results to differ materially from those expressed or implied in the forward-looking statements. These factors include, among others, conclusions or realization of mineral resources, the actual results of exploration activities, possible variations in ore grade or recovery rates, fluctuations in the price of gold and silver, risks relating to additional funding requirements, political and foreign risks, production risks, environmental regulation and liability, government regulation as well as other risk factors set out under the heading "Risk Factors" in the Preliminary Prospectus which is available on SEDAR at In addition, there is no assurance that the Offering will close on the proposed terms or at all or that the necessary approvals will be obtained, in which case the Company may be required to adjust its plans and/or seek financing from other sources. Investors are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty therein.

Neither the Toronto Stock Exchange nor the AIM Market of the London Stock Exchange has reviewed and neither accepts responsibility for the adequacy or accuracy of this news release.

Contact Information

  • Greystar Resources Ltd. - Contact in Canada
    David B. Rovig
    (406) 245-9520
    Greystar Resources Ltd. - Contact in Canada
    Mr. Andreas Curkovic
    Investor Relations
    (416) 577-9927
    NCB Stockbrokers Limited - Contact in London
    Christopher Caldwell
    +44 (0) 20 7071 5200