Groundstar Resources Limited
TSX VENTURE : GSA

Groundstar Resources Limited

June 29, 2005 17:53 ET

Groundstar Resources Limited Announces Underwritten Private Placement

CALGARY, ALBERTA--(CCNMatthews - June 29, 2005) - NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

Groundstar Resources Limited (TSX VENTURE:GSA) announces that it has engaged Jones, Gable & Company Limited to complete an underwritten private placement with limited termination provisions pursuant to which Groundstar will issue 3,750,000 Units at a price of $0.40 per Unit. In addition, Groundstar has granted Jones, Gable an option exercisable until closing to issue an additional 1,250,000 Units at $0.40 per Unit, resulting in a maximum offering of up to 5,000,000 Units to raise gross proceeds of up to $2,000,000. Each Unit will consist of one Common Share of Groundstar and one-half of one share purchase warrant. Each whole share purchase warrant will entitle the holder to acquire one additional Common Share at a price of $0.60 for a period of 18 months following the closing. Completion of the financing is subject to the approval of the TSX Venture Exchange. The Units will be subject to a statutory hold period expiring four months and one day following the closing.

A commission of 7% of the gross proceeds raised from the financing will be paid to Jones, Gable. In addition, Jones Gable will receive a number of compensation warrants that is equal to 7% of the total number of Units sold under the financing. Each compensation warrant shall be exercisable by the holder to acquire one Unit at a price of $0.40 per Unit for a period of 18 months following the closing.

Groundstar is a publicly traded Canadian junior oil and gas company actively pursuing exploration opportunities in Guyana and other international regions.

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

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