Canstar Resources Inc.
TSX VENTURE : ROX

Canstar Resources Inc.

October 17, 2007 14:42 ET

Canstar Announces Comencement of Cross Appeal on Mary March Property Dispute, Newfoundland; Update on McFaulds Lake; Recent Warrant Exercise

TORONTO, ONTARIO--(Marketwire - Oct. 17, 2007) - The Directors of Canstar Resources Inc. (TSX VENTURE:ROX) are pleased to announce that the Mary March appeal (Vinland Resources Limited) and cross-appeal (Phelps Dodge Corporation-Canstar Resources) began yesterday in St. John's Newfoundland. Management is optimistic that this is the beginning of a favourable resolution for the Company to the longstanding dispute. Shareholders will be updated as soon as news is available.

The Company's cross-appeal is pivotal to the hearing as it asks that the matter of title regarding Mary March be dealt with at the court level, as Canstar believes the dispute rests on a point of law that is best decided by the panel of Appeal Judges. A decision on our cross appeal would provide the speediest resolution to the dispute, obviating the need for a second Adjudication Board hearing.

The Mary March property is located in central Newfoundland, 20 kilometers northeast of, and within, the same geological group that hosts the prolific former producing Buchans mine, and produced some of the highest-grade base and precious metal diamond drill intersections (9.2m @ 10.33% Zn, 1.62% Pb, 0.66% Cu, 118.1g/t Ag and 4.1 g/t Au) ever achieved in the area outside the Buchans mine. The Mary March deposit was discovered by Phelps Dodge Corporation of Canada in 1999. Canstar has the right to earn 50% interest in the property, with first refusal rights on the remaining 50%, from Phelps Dodge. Following a favourable outcome of the dispute, Canstar will immediately begin a drilling program to further define the mineralized zone.

Mary March History

The dispute began in 2000, when a privately held Newfoundland company, Vinland Resources Limited, filed applications seeking Map Staking Licenses over the core Mary March discovery areas. The Mineral Claims Recorder (Newfoundland), on the basis of evidence that the lands in question had been privately held since 1905, rejected the applications. On December 20, 2000, Vinland Resources Limited filed a grievance with the Mineral Rights Adjudication Board, asking that the Mineral Claims Recorder's decision be overturned.

In July 2006 the Supreme Court overturned the decision of the Mineral Rights Adjudication Board, which had previously favoured Vinland Resources, after determining that the original Board decision improperly placed the burden of proof on the Mineral Claims Recorder, had applied an incorrect standard of proof and had failed to address the evidence before it. The matter was ordered to be reheard by a different panel, in accordance with the guidelines in the judgment.

Vinland filed notice of appeal in August 2006 and Phelps Dodge-Canstar responded with the cross-appeal asking that Vinland's claim be dismissed without a rehearing.

McFauld's Lake

Canstar is currently evaluating exploration plans for its McFauld's 1 and McFauld's 3 properties located in the McFauld's Lake area. The properties occur to the east of Noront Resources high-grade nickel-copper-PGE discovery, which has produced drill intersections of up to 5.9% Ni, 3.1% Cu, 2.87 g/t Pt and 9.78 g/t Pd over 68.3 meters, including a 3-meter section averaging 8.7% Ni, 10.9% Cu, 40.79 g/t Pt and 14.57 g/t Pd.

Canstar's properties are located within the McFauld's Lake Belt and contain at least seven drill-ready targets. Canstar plans to commence field programs through the fall and winter.

Warrant Exercise

During September and October, 2007 5,600,000 common share purchase warrants and 133,333 flow-through share purchase warrants were exercised for gross proceeds of $846,799 ($826,800 non-flowthrough; $19,999 flowthrough). These funds will be used for general working capital of the Corporation.

Canstar's shares trade on the TSX Venture Exchange under the symbol ROX.

David Palmer, Ph.D., P.Geo., is the qualified person for all technical information in this release. To find out more about Canstar Resources, visit our website at www.canstarresources.com.

No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. This News Release includes certain "forward-looking statements". All statements other than statements of historical fact, included in this release, including, without limitation, statements regarding potential mineralization and reserves, exploration results and future plans and objectives of Canstar, are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from Canstar's expectations are exploration risks detailed herein and from time to time in the filings made by Canstar with securities regulators.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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