Groundstar Resources Completes Private Placement

Groundstar Resources

Groundstar Resources Limited (TSX VENTURE:GSA) has closed its previously announced private placement pursuant to which Groundstar has issued 10,833,334 Units at a price of $1.20 per Unit for gross proceeds of $13,000,000, which includes the over-allotment option of 1,625,000 Units, exercised by the agent, Blackmont Capital Inc. Each Unit consists of one Common Share of Groundstar and one-half of one share purchase warrant. Each whole share purchase warrant ("Warrant") will entitle the holder to acquire one additional Common Share at a price of $2.00 for a period of 18 months following the closing. If, after one year following the closing, the closing price of the Common Shares of Groundstar on TSX Venture Exchange is $2.40 or greater for a period of 20 consecutive trading days, Groundstar may provide an earlier expiry of Warrants, in which case the Warrants shall expire 21 days after giving such notice. The Units are 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 was paid to Blackmont. In addition, Blackmont has received a number of compensation warrants entitling it to purchase 758,333 Units (the "Broker Units") at an exercise price of $1.20 per Broker Unit for a period of 18 months following the closing.

The proceeds from the private placement will primarily be used in Groundstar's proposed exploration work and drilling program in Egypt and for general corporate purposes.

Groundstar is a publicly traded Canadian junior oil and gas company actively pursuing exploration opportunities in Guyana, central Asia and north Africa.

The Units have not and will not be registered under the United States Securities Act of 1933 as amended (the "US Securities Act") or any state securities laws and may not be offered or sold in the United States or to any US Person except in certain transactions exempt from the registration requirements of the US Securities Act and applicable state securities laws.