Groundstar Resources Limited
TSX VENTURE : GSA

Groundstar Resources Limited

August 16, 2005 13:11 ET

Groundstar Closes $2,000,000 Private Placement

CALGARY, ALBERTA--(CCNMatthews - Aug. 16, 2005) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

Groundstar Resources Limited (TSX VENTURE:GSA) (the "Company") is pleased to confirm that it has today closed its underwritten private placement of 5,000,000 Units, issued at a purchase price of $0.40 per Unit for gross proceeds of $2,000,000. This includes the over-allotment option of 1,250,000 Units, exercised by the underwriter. Each Unit is comprised of one common share and one half of a non-transferable share purchase warrant. Each whole warrant entitles the holder thereof to purchase one additional share at a price of $0.60, for a period of 18 months following the closing date of the private placement.

Jones, Gable and Company Limited, the underwriter, has been paid a commission equal to 7% of the gross proceeds derived from the sale of the Units and has been issued broker warrants entitling it to purchase 350,000 Units (the "Broker Units") at an exercise price of $0.40 per Broker Unit for a period of 18 months from the closing date of the private placement. Each Broker Unit is comprised of one common share and one half of a non-transferable share purchase warrant. Each whole warrant entitles the underwriter to purchase one additional share at a price of $0.60, for a period of 18 months following the closing date of the private placement.

The Company is a junior oil and gas company, based in Calgary, actively pursuing exploration and production opportunities in Guyana, Libya and other international regions.


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

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