*NEWS RELEASE*
First Star closes financing, arranges another, makes board changes
First Star Energy Ltd FST
Shares issued 24,016,195 Jan 6 close $0.40
Thu 7 Jan 99 News Release
Mr. John Squarek reports
First Star has closed the private placement of 3,194,444 flow-through
shares at 36 cents per share for total proceeds of $1,150,000.
The proceeds from the flow-through share issue are to be expended in 1999
on First Star's high impact exploration plays, including:
1. a Mannville exploration well at Strachan to develop the upper zones
logged but not tested in the 1998 Swan Hills discovery well;
2. a 2,300 metre exploration well at Ferrybank in central Alberta (Zeta),
on a Devonian D-3 reef oil play with the potential for over 100
million barrels of oil;
3. two other significant Devonian reef plays that are currently being
developed.
In addition, First Star is seeking approval from the Alberta Stock Exchange
to complete a further private placement of up to 5,000,000 units at 28
cents per unit ($1,400,000). Each unit will be comprised of one Class A
share and 0.36 of a share purchase warrant. The price of each share forming
part of a unit will be 27.64 cents and the price of each 0.36 warrant shall
be .36 cents. The warrants will be exercisable at 30 cents until May 31,
1999, and if fully exercised would provide $540,000 to First Star. The
subscribers are expected to include Tetrarch Capital Corporation (a 100 per
cent investment corporation of James A. Malcolm) and other subscribers who
are not yet known and will be determined during the course of the private
placement.
Mr. Malcolm has agreed to become a director of First Star.
The expected date of closing for the private placement is in February 1999.
First Star has agreed that $1,325,000 of the proceeds from the proposed
private placement will be used to purchase one-half of the working
interests that First Star has agreed to purchase from a joint venture
partner in the Strachan area. First Star also proposes to assign to
Tetrarch Capital (or a group put together by Tetrarch Capital) First Star's
right to acquire the other half these working interests. Following the
acquisition of such interests by Tetrarch Capital it is proposed that First
Star will have a call right to purchase such interests for four months
after the 2-22-38-9W5 well is placed on production, for $425,000 and
4,375,000 shares. If the option is not exercised, the Tetrarch group will
have a put right to require First Star to purchase such interests for a
limited period of time and for consideration that may include cash and/or
securities of First Star.
Robert J. Iverach, Q.C. has resigned as chairman of the board of directors
but will remain as a director of the company.
Mr. Malcolm has joined the board of directors as chairman effective Jan. 5,
1999. Mr. Malcolm was the founder and president of AccuMap EnerData
Corporation. AccuMap was merged with QC Data in March 1998.
Robyn Lore has joined the management team as a business consultant
effective Jan. 15, 1999.
(c) Copyright 1999 Canjex Publishing Ltd. canada-stockwatch.com
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