Vancouver, BC / – July 21, 2015: Weststar Resources Corp. ($WER:CNX) (the "Company" or “Weststar”) is pleased to announce it has signed a letter of intent to purchase shares of North Road Ventures Inc. (“North Road”), a private British Columbia company, representing up to a 50% interest in North Road. This allows Weststar to earn up to a 50% interest in North Road’s pending Medical Marihuana for Medical Purposes Regulations (“MMPR”) application as well as the option and access to participate in certain business opportunities that North Road now has or may have (together, the “Business Arrangement”).
The principals of North Road have over nine years of professional experience in legally growing high quality marijuana for a Federal Government Institution. North Road has a Health Canada application pending for a license issued under the MMPR. Their business is located within a secured, fully serviced, industrial-zoned facility situated in a favourable municipality within the British Columbia Lower Mainland. The industrial premise contains the necessary infrastructure required to support Health Canada's MMPR requirements.
Will Rascan, President and CEO of Weststar stated: “We are excited that our efforts have resulted in connecting with a seasoned and professional group committed to the attainment of a MMPR License with Health Canada. The opportunities within the fast-growing marijuana space are vast and with that, we at Weststar will continue to seek those that resonate best for our shareholders.”
Under the terms of the Business Arrangement, Weststar can purchase shares representing a 50% interest in North Road by paying to North Road, upon signing a definitive agreement, $30,000 in cash, of which Weststar has the option to pay the $30,000 in common shares of the capital of Weststar, and issuing an aggregate 15,000,000 common shares in the capital of Weststar over a series of milestones while obtaining the MMPR License. Weststar shall be granted a right of first refusal in all business opportunities that may come available to North Road and to purchase the remaining 50% interest in North Road at a 15% discount to the amount offered by a third party offeror. The Definitive Agreement is subject to Weststar completing a financing to fund the purchase and conducting due diligence for a period of up to 120 days during which time Weststar may loan funds to assist North Road in furthering its MMPR application.
Weststar will be required to fund the Ready to Build/Pre-License Inspection stage of the MMPR application via loans to North Road, with such amounts to be determined. If Weststar is unable to fund the Ready to Build/Pre-License Inspection stage, Weststar’s interest in North Road shall be decreased from 25% to 12.5% at that stage.
Canada is an emerging medicinal marijuana market that appears to be continuing to grow daily amongst businesses and patients. There are an estimated 55,000 legal patients approved by Health Canada and that number continues to grow on a daily basis with 2024 Health Canada projections putting the number of approved medical marijuana patients to 450,000. Sales projections for the new industry by 2024 could be seen as high as $1.3 billion.
Weststar announces that it has arranged for a non-brokered private placement offering (the “Offering”) of up to 8,000,000 units (the “Units”) at a price of $0.05 per Unit for gross proceeds of up to $400,000. Each Unit will consist of one common share and one share purchase warrant (the “Warrant”), each Warrant exercisable at $0.075 for a period of 24 months from the date of closing. Proceeds of the Offering will be used to further its due-diligence in North Road, fulfill the terms of the Business Arrangement, assess other potential business opportunities and for general working capital. Finder’s fees may be payable on the Offering, and the securities issued will be subject to a four-month hold from the date of issuance.
Cautionary and Forward-Looking Statement
This news release contains forward‐looking statements and forward‐looking information within the meaning of applicable securities laws. These statements relate to future events or future performance. All statements other than statements of historical fact may be forward‐looking statements or information. Forward‐looking statements and information are often, but not always, identified by the use of words such as "appear", "seek", "anticipate", "plan", "continue", "estimate", "approximate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe", "would" and similar expressions.
Forward-looking statements and information are provided for the purpose of providing information about the current expectations and plans of management of the Company relating to the future. Readers are cautioned that reliance on such statements and information may not be appropriate for other purposes, such as making investment decisions. Since forward‐looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risks associated with the marijuana industry in general such as operational risks in growing; competition; incorrect assessment of the value and potential benefits of various transactions; ability to access sufficient capital from internal and external sources; failure to obtain required regulatory and other approvals and changes in legislation, including but not limited to tax laws and government regulations. Accordingly, readers should not place undue reliance on the forward‐looking statements, timelines and information contained in this news release. Readers are cautioned that the foregoing list of factors is not exhaustive. The forward‐looking statements and information contained in this news release are made as of the date hereof and no undertaking is given to update publicly or revise any forward‐looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws or the Canadian Securities Exchange. The forward-looking statements or information contained in this news release are expressly qualified by this cautionary statement. The Canadian Securities Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved of the contents of this press release.