Canstar Resources has entered into a letter of intent with VMS Mining Corporation (VMSC) to form a $11.5 million exploration joint venture focused on advancing high-grade volcanogenic massive sulphide (VMS) projects in Newfoundland. The JV aims to accelerate drilling and geophysical programs at Canstar’s Buchans and Mary March properties, located near several historical high-grade VMS deposits.
Under the terms of the agreement, VMSC will make an initial $1.5 million non-dilutive investment to acquire a 10% stake in the JV, implying a post-money valuation of $15 million. Canstar expects to receive $500,000 of this funding in April 2025, with a definitive agreement anticipated in May. VMSC will have the option to increase its stake to 40% and then 60% through further staged investments of $4 million and $6 million, respectively.
Exploration at Buchans has already commenced, with a deep IP geophysics program underway, while activity at the Mary March project is scheduled to begin in spring 2025. The projects lie adjacent to known high-grade VMS zones and are supported by infrastructure. Notably, the Mary March discovery hole returned 10.1% zinc, 0.64% copper, 1.8% lead, 4.2 g/t gold, and 122 g/t silver over 9.63 meters.
VMSC’s Dr. Harold Gibson, P.Geo., will lead the technical and exploration strategy. Canstar retains pro-rata investment rights beyond VMSC’s third funding phase and continues to independently advance its 100%-owned Golden Baie gold/antimony project, which is not part of the JV.
