VANCOUVER, BRITISH COLUMBIA--(Marketwired - Dec. 18, 2013) - Bluestone Resources Inc. ("Bluestone", the "Company") (TSX VENTURE:BSR) today provided a corporate update with respect to management changes and the receipt of a financing in the form of a loan.
The Company announces the resignation of Mr. David McAdam as President, Chief Executive Officer and a director. The Company also announces the appointment of John Robins as Interim President and CEO until a suitable replacement is found.
Termination of Private Placement
Due to the ongoing uncertain market conditions, the Company has announced that it has cancelled the previously announced private placement (first announced on March 21, 2013 and re-priced on July 2, 2013).
The Company has arranged a $130,000 private placement of a convertible note with John Robins, Chairman of the Company (the "Lender"). The independent directors of the Company have reviewed and accepted the terms of the proposed private placement, which is subject to regulatory approval. The private placement will consist of a convertible note, structured as a secured, interest-bearing loan of $130,000. The term of the loan will be for four months from the date of the advance of the funds. The Loan will be secured by way of all the Company's right, title and interest in and to the Richardson Property. The Lender may convert at any time all or a portion of the principal amount outstanding under the loan into units of the Company at a conversion price of $0.05 per unit. Each unit will be comprised of one common share in the capital of Bluestone and one transferable share purchase warrant, with each warrant being exercisable into another common share of the Company at a price of $0.05 for a period of two years. The Lender will also have the right to convert all or any portion of the accrued interest on the loan into units of the Company at the same terms at the time of conversion. Bluestone may, at its option, repay all or any part of the principal amount outstanding under the loan, without bonus or penalty, subject to the requirement that Bluestone gives notice to the Lender that the Lender may elect within 10 days to convert all or any portion of the loan into common shares. The loan agreement will contain provisions related to default by Bluestone and remedies available to the Lender. The Company will pay interest to the Lender at the rate of 12% per annum. The loan will accrue interest to the date of repayment and will be calculated monthly on the last day of the month.
As a result of the private placement, the Lender will become a "Control Person" (as defined in the TSX Venture Exchange's policies) of Bluestone. The Company has previously received approval from the shareholders of Bluestone and the TSXV in July 2012 to Mr. Robins being a Control Person and no new approval is required. Mr. Robins currently owns 2,610,655 common shares, representing approximately 14.12% of Bluestone's issued and outstanding common shares, and will be entitled to acquire a further 2,600,000 common shares by converting the $130,000 loan principal into common shares at a conversion price of $0.05 per share. If Mr. Robins also exercises the share purchase warrants at an exercise price of $0.05 issued to him under this loan, Mr. Robins will acquire a further 2,600,000 common shares. If Mr. Robins converts the entire principal amount of the loan and exercises the share purchase warrants, Mr. Robins would control approximately 24.7% and 33%, respectively, of the then issued shares of Bluestone (assuming no other shares are issued by Bluestone, except the common shares to Mr. Robins upon conversion of the loan).
Proceeds from the loan were used to fund the Alaskan state fees required by the Company.
"During these difficult market conditions, Bluestone is endeavouring to start a restructuring of the Company and we appreciate the work that David McAdam has done for Bluestone over his time with us," quotes John Robins, Chair of Bluestone.
About Bluestone Resources Inc.
Bluestone Resources Inc. is a Canadian exploration company focused on the discovery and development of economic mineral deposits. Founded in 2004, the Company has assembled a team with the business acumen and technical expertise to identify and advance undervalued mineral exploration projects world-wide.
On behalf of the Board
Bluestone Resources Inc.
John Robins, Chair of the Board
Neither the 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 press release includes "forward-looking information" including statements regarding the use of the proceeds of the private placement that are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company. Investors are cautioned that any such statements are not guarantees of future events and that actual events or developments may differ materially from those projected in the forward-looking information. Such forward-looking information represents management's best judgment based on information currently available. The Company does not assume the obligation to update any forward-looking information, except as required by applicable law.
Bluestone Resources Inc. is a member of the Aurora Mineral Resource Group of companies. For more information please visit www.auroraresource.com.