Southern Star Resources Inc.
TSX VENTURE : SSR

Southern Star Resources Inc.

August 31, 2005 11:43 ET

Southern Star Announces $1,200,000 Flow-Through Financing

TORONTO, ONTARIO--(CCNMatthews - Aug. 31, 2005) - Southern Star Resources Inc. (TSX VENTURE:SSR) is pleased to announce a $1,200,000 non-brokered financing of flow-through units ("Units") at a price of $0.50 per Unit. Each Unit will consist of one flow-through common share of Southern Star and one-half of one flow-through share purchase warrant. Each whole share purchase warrant will entitle the holder to purchase one common share of Southern Star at a price of $0.60 per common share for a period of twelve months from the closing date provided that if after four months following the closing date, the common shares of Southern Star close above $1.00 on the TSX Venture Exchange for 20 consecutive days, then the expiry date of the share purchase warrants shall be automatically reduced to 30 days from the date of issuance of a news release by Southern Star announcing the change to the expiry date of the share purchase warrants.

Completion of the financing is subject to receipt of TSXV approval.

Up to $450,000 of the financing will be purchased by insiders of Southern Star. It is expected that the filing of a material change report relating to the financing will occur less than 21 days before the closing date of the transaction, however, Southern Star believes this is necessary because the decision to complete the financing was just made and the transaction is expected to close within 21 days.

Southern Star intends to use the proceeds of this financing to accelerate its Bruce Channel Drilling program on the Gold Eagle Mine Property with a full sequence exploration program. The exploration results announced in Southern Star's press release dated August 29, 2005 have resulted in management arranging for a minimum of two and up to three drills on the property to expedite the program.

The statements made in this News Release may contain forward-looking statements that may involve a number of risks and uncertainties. Actual events or results could differ materially from the Company's expectations and projections.

Shares Outstanding: 32,066,378


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

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