Resource Star seeks $1.14 million raising through partly underwritten entitlement issue

Resource Star (ASX: RSL) plans to raise up to $1.14 million to put towards exploration in Malawi and Australia and to repay funding from a major shareholder.

The money will be raised through a pro rata one for one non-renounceable entitlement issue offered at $0.02 each.

Substantial shareholder Red Rock Resources has already committed to take up its full entitlement under the issue and will underwrite the first $500,000 of any shortfall.

Part of the funds will be used to repay funding that was made available to Resource Star by Red Rock pending completion of the issue.

Proceeds from the issue will also be used to complete a new round of exploration at the Livingstonia uranium project in Malawi.

Resource Star plans to advance its other exploration projects, which include the Machinga Joint Venture and Ilomba Hill Joint Venture in Malawi as well as the Spinifex Joint Venture and the Edith River Project in Australia.

The rights issue opens on February 20, 2012, and is scheduled to close on March 6, 2012.

Livingstonia

Resource Star is earning up to an 80% stake in Livingstonia from joint venture partner Globe Metals and Mining (ASX: GBE).

In November 2011 an extension to the northern boundary of one tenement at Livingstonia was granted, boosting the project’s exploration potential.

The additional 400 metres of land lies to the north of the existing Inferred Resource at the Chombe prospect.

Chomba hosts an Inferred JORC Resource of 8.3 million tonnes at 325 parts per million uranium oxide equivalent for a contained 6 million pounds of uranium oxide, based on a 150 parts per million cut-off grade.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/24834/resource-star-seeks-114-million-raising-through-partly-underwritten-entitlement-issue-24834.html