SOURCE: Weststar Resources Corp.

June 23, 2008 06:00 ET

Weststar Acquires "18 Meter" Coal Property, Announces Private Placement and Appoints New Director

VANCOUVER, BC--(Marketwire - June 23, 2008) - Weststar Resources Corp. (TSX-V: WER) (the "Company") is pleased to announce that, subject to regulatory approval, it has entered into a letter of intent with a group of arms-length Vendors (the "Vendors"), pursuant to which the company has acquired 72 coal permit applications, known as the "18 Meter" property, located approximately 70 km northwest of the recent coal discovery of Goldsource Mines Inc. coal discovery, near the community of Hudson Bay, Saskatchewan. The coal lease applications encompass approximately 138,240 acres or 55,944 ha. The coal lease applications have been granted priority status by the Saskatchewan ministry, and the Company has been informed that processing of these permits should be completed within the next 2 - 3 weeks.

The coal permits are underlain by sandstones and shales of the Cretaceous-aged Mannville group. During a 1994 exploration program conducted by Consolidated Pine Channel Gold Corporation, an approximately 18.84 m thick coal interval between 47.70 m and 66.54 m depth was identified, at the property. The discovery was made while testing a magnetic geophysical anomaly for kimberlite. The historical drill log (TL02-2, assessment report 63E-0004) indicates:

--  47.70 m to 55.32 m (7.62 m): Coal, massive;
--  55.32 m to 66.54 m (11.22 m): Coal Breccia, from 20 to 60% angular
    coal clasts, mixed with varying amounts of clay, silt and sand

Neither the rank nor the grade of the coal has been determined. It should also be noted that core recoveries in the coal intersection were as low as 15%, and average less than 50% for the 7.62 m interval. Hence, the massive nature of the coal as stated in the drill log may not be accurate.

Readers should note that the above information on historic work performed on the property was done prior to implementation of NI43-101, therefore the results spoken of do not comply with modern reporting standards and should not be relied upon until such time as additional work is completed on the property, including preparation of an NI43-101 report.

Although the coal was not analyzed at the time, the magnitude of coal reported within the aforementioned interval is similar to the Goldsource Discovery (26 m and 32.5 m in thickness) and confirms the regional potential for significant thicknesses of coal within Mannville-aged rocks of east-central Saskatchewan.

Cost of the acquisition includes the payment of $1,150,000 and the issuance of 3,300,000 shares of the Company on the following schedule:

--  $150,000 on the signing of a Mineral Property Option Agreement (the
--  $500,000 and 1,300,000 shares of the Company on TSX Venture Exchange
    approval of the Agreement;
--  $500,000 and 2,000,000 shares of the Company six months after the date
    of TSX Venture Exchange approval of the Agreement
--  The Vendors will retain a 2% Net Smelter Royalty ("NSR"), one half of
    which the Company may    purchase for the sum of $2,000,000;
--  The Vendors will retain a Flat Rate Unit of Production Royalty ("FRUP")
    equal to $2.00 per tonne of coal produced or sold from the Property.  The
    Company may reduce the FRUP to $1.00 per tonne by paying the Vendors the
    sum of $2,000,000.

Dahrouge Geological Consulting Ltd. of Edmonton, Alberta has been retained for a period of 24 months to be used for all exploration and geological services. Dahrouge Geological and its predecessor company have worked extensively in the coal industry, performing exploration for several major coal companies.

Gordon J. Allen, P.Geo., is the qualified person who has reviewed the technical material contained in this news release.

The Company also wishes to announce that, subject to regulatory approval, it has arranged a private placement of up to 2,500,000 units at price of $0.25 per unit for gross proceeds of $625,000. Each unit will consist of one flow-through common share and one-half of one transferable share purchase warrant. Each whole warrant shall be exercisable into one non flow-through common share for a period of two years at a price of $0.40 per share. Proceeds of the placement will be used for work on the Company's mineral properties.

Finder's fees will be payable in accordance with the policies of the TSX Venture Exchange.

The Company has also granted incentive stock options to its directors, officers, consultants and employees, under its Stock Option Plan, for the purchase of up to 900,000 common shares of the Company for a period of 2 years at a price of $0.30 per share, subject to Exchange approval, and shareholder approval at the Company's Annual General Meeting.

The Company also announces that Mitchell Adam has been appointed a director of the Company. Mr. Adam has 19 years experience in securities, holding the positions of officer and director of several public companies. The Company has accepted the resignation of Raj Chowdhry as director of the Company, in order to pursue other interests. The Company would like to thank Mr. Chowdhry for his service over the years.

On Behalf of the Board
"Jerry A. Minni"
Jerry A. Minni, CFO
Weststar Resources Corp.

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

WARNING: The Company relies on litigation protection for "forward looking" statements. Actual results could differ materially from those described in the news release as a result of numerous factors, some of which are outside the control of the Company.

Contact Information

  • Contact:
    Mitchell Adam