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Canada Business News and Press Releases
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(EMAILWIRE.COM, January 23, 2009 ) Vancouver, BC - Weststar Resources Corp. (TSX-V: WER) (the "Company") is pleased to announce the acquisition, subject to TSX Venture Exchange approval, of a 100% interest in six Coal Exploration Licence applications, located on the Bache Peninsula, Ellesmere Island, Nunavut Territory. The Exploration Licences cover an area of approximately 450 square kilometers (45,000 hectares) with the final land package to be determined at the time of granting of the Exploration Licences. A general location map of the Exploration Licences is available on the Company's website (http://www.weststarresources.com/i/pdf/WESTSTAR_COAL_NUNAVUT_JAN22_2009.pdf). The Company is in the process of creating a wholly-owned subsidiary which will hold and manage this and any subsequent Arctic coal acquisitions.
In a report (pre-dating NI 43-101 and therefore non-NI 43-101 compliant) dated November 19, 1992, revised January 14, 1993 by W.D. Kalkreuth, J.J. McIntyre and R.J.H. Richardson from the Alberta Geological Survey, titled "The geology, petrography and palynology of Tertiary coals from the Eureka Sound Group at Strathcona Fiord and Bache Peninsula, Ellesmere Island, Arctic Canada" published by the Geological Survey of Canada, the authors reference several coal seams, visible and traceable for considerable lengths on surface.
As noted in the report:
"Coal seams of substantial thickness and lateral continuity are developed in the Expedition Formation at Bache Peninsula. The coals are lignite/sub bituminous in rank and have low to moderate sulphur and variable ash contents."
In addition, the authors noted:
Although no resource estimates have been done, a substantial volume of low sulphur, medium to high ash coals suitable for thermal generation are present in the Bache Peninsula Graben. Their location near the northern end of the "North Water", a polynya or perpetual ice-free area located at the northern end of Baffin Bay, enhance the exploitability of the resource.
Weststar director Chris Verrico notes that early feasibility work released May 16, 2006, by Baffinland Iron Mines Corporation on their neighboring project studied ocean transportation for their project utilizing shipping lanes within Baffin Bay. This study determined that bulk-shipping of ore would be feasible 9 months a year utilizing cape sized bulk carriers. Westar envisions the scope of tidewater coal exports to supply the European thermal coal markets to be logistically comparable to Baffinland's ocean transportation study. The Company cautions that Baffinland's estimation of the months per year during which bulk-shipping of ore is feasible may not be the same as the Company may experience if the Company moves the project forward. The Bache Peninsula coal licence area is located 70 km from mainland Greenland, 160 km from the village of Siorapaluk or 200 km from Qaanaaq Greenland, which has scheduled air service, therefore, the anticipated project logistics should be comparable to most other arctic industrial initiatives. In our view any export-bound coal that eliminates the use of 3rd party rail infrastructure should have a significant cost benefit. Much of the thermal coal bound for Germany is presently shipped from Australia.
Readers are cautioned that an NI43-101 report has not been prepared on the subject property. The Company intends to have a report prepared as soon as possible, following granting of the Exploration Licences. Plans to move the project forward will be subject to the results of the work program recommended by the NI 43-101 report.
Cost of the acquisition includes cash payments of $250,000, and issuance of 2,000,000 units. Each unit consists of one common share and one non-transferable share purchase warrant, each warrant exercisable into an additional common share for a period of two years from the date of issue at a price of $0.25 per share in the first year and $0.50 per share in the second year. The schedule of payments and unit issuances follows:
- On execution of the agreement, a cash payment of $40,000;
- Within five days of TSX Venture Exchange approval of the acquisition, 500,000 units of the Company;
- On or before July 19, 2009, 500,000 units of the Company;
- On or before January 19, 2010, a cash payment of $60,000 and 500,000 units of the Company;
- On or before July 19, 2010, 500,000 units of the Company;
- On or before January 19, 2011, a cash payment of $75,000;
- On or before January 19, 2012, a cash payment of $75,000; and
- The Vendors shall retain a Royalty equal to $0.20 per tonne of any coal produced from the property.
The Company also wishes to announce that the private placement of 3,000,000 units at $0.15 announced January 20, 2009 has been increased (subject to TSX Venture Exchange approval) to 4,000,000 units at $0.15 per unit, for total gross proceeds of $600,000. Each unit will consist of one common share and one transferable share purchase warrant, each warrant exercisable into one additional common share at a price of $0.20 per share for a period of two years from the date of closing. Proceeds of the placement will be used to fund the Company's upcoming drill program and for general working capital.
A finder's fee will be payable on the Bache Peninsula Coal acquisition, and finders' fees may be payable in whole or in part on the units issued under the financing, in accordance with TSX Venture Exchange policy.
Marvin A. Mitchell, P. Eng is the qualified person who has reviewed the technical material contained in this news release.
About the Company: Weststar Resources Corp. (WER: TSX-V) is a mineral exploration company focused on discovering and advancing mineral properties by utilizing modern geological science to evaluate historical known discoveries. Weststar offers the potential for rapid corporate growth and asset appreciation. Weststar''s portfolio is currently focused in Canada and is primarily invested in coal properties with known historical coal discoveries. The Company's Saskatchewan Tobin Lake 18 Meter coal property is currently the main focus of exploration activity. For further info on the Company please visit www.weststarreources.com or email info@weststarresources.com.
On Behalf of the Board
Mitchell Adam, President
Weststar Resources Corp.
For additional information please contact the Company at 1-604-669-9330 or email: mitch@weststarresources.com
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.
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Weststar Resources Corp
Weststar Resources Corp
1-604-669-9330
mitch@weststarresources.com 
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