White Rock Minerals Ltd. to Acquire AuStar Gold Ltd.

Ballarat, Australia - AuStar Gold Ltd. (ASX:AUL) and White Rock Minerals Ltd. (ASX:WRM) (OTCMKTS:WRMCF) are pleased to advise that they have entered into a binding Merger Implementation Deed (MID), pursuant to which it is proposed that White Rock will acquire 100% of the issued share capital of AUL via a scheme of arrangement between AuStar Gold and its shareholders (the Scheme).

The Scheme consideration is to be paid in the form of shares in White Rock with each AuStar Gold shareholder receiving 0.78 White Rock shares for each AuStar Gold share held. This implies a price of 43.5 cents per AuStar Gold share on issue and is based on the 1-month VWAP AuStar Gold share price of 27.8cps and the 1-month VWAP White Rock share price of 55.7cps (as at the close of trading on 2 February 2021).

The implied price of the Scheme consideration represents a premium of approximately 47% based on the last trading price of AUL shares (1st February 2021) and 56% based on the 1-month volume-weighted average price (VWAP) of AUL shares.

AuStar Gold and White Rock have also agreed to consult in good faith to agree a mechanism in connection with the Scheme for dealing with the 7,847,115 options to subscribe for an AuStar Gold share which are admitted to quotation on the ASX (AuStar Gold Listed Options). The parties will update the market when this mechanism is agreed.

Transaction rationale

The merged group, which will retain the name 'White Rock Minerals Ltd.', will be a substantially enlarged, diversified gold explorer and producer, with a world-class portfolio of assets spanning the bulk of the high-grade Victorian Walhalla-Woods Point gold belt, the large Red Mountain (Alaska) Silver-Zinc-Gold-Lead VMS and Last Chance Gold IRGS project and the advanced pre-development stage Mount Carrington gold-silver project located in New South Wales.

The merged group is expected to benefit from significant management and corporate synergies, a strongly enhanced balance sheet, an enhanced profile in the North American and Australian capital markets, and access to a continuing cohort of talented geologists and experienced mining professionals.

The merged group will also benefit from the geographic proximity of White Rock Managing Director, Mr. Matthew Gill, to the enlarged company's Victorian exploration and production assets. Mr. Gill, as a former non-executive director of AUL, has deep familiarity and expertise in respect of the continuing AUL assets, and is expected to hit the ground running, with a focus on accelerating exploration of the Victorian tenement portfolio, growing production at Woods Point and further developing the world-class asset portfolio already housed within WRM.

The Board of the merged group is expected to comprise three (3) continuing WRM directors, including continuing Chairman Mr. Peter Lester and Managing Director and Chief Executive Officer Matthew Gill, along with Jeremy Gray and two (2) continuing directors from AUL, expected to be Mr. Paul McNally and Lord. Christopher Wellesley. Austar Gold is expected to continue to operate as a wholly owned subsidiary of White Rock with all ASX, registry and other shared services to be assumed by White Rock.

AuStar Gold director Mr. Paul McNally commented: "I am extremely pleased to be announcing this transaction, which delivers for AuStar Gold shareholders a certain path forward to accelerated activity on the Company's world-class Victorian gold tenements, as well as the benefit of exposure to White Rock's high-potential exploration and development assets in Alaska and New South Wales. I am particularly pleased to be able to continue my active involvement with the enlarged company, and to again be working with my former colleague Matt Gill, who I am sure will provide effective and dynamic leadership of a company with a hugely compelling suite of assets and opportunities."

White Rock Chairman Mr. Peter Lester commented: "White Rock is delighted with the prospect of adding high potential Victorian gold exploration, including a modest production base, in one of Victoria's most prolific historical gold production regions to its portfolio. With the Morning Star mine and processing plant in place, Austar will also move White Rock closer to being a producer and open up exposure to the growing Victorian exploration and mining scene which has enjoyed a considerable resurgence in recent times. The combination of our two companies and the pursuit of the new opportunities in Victoria will add to the 2021 programs already in place for White Rock's exiting assets in Alaska, and provide greater opportunity for growth for both groups of shareholders. I look forward to working with the two Austar directors in achieving this aim."

Dr Quinton Hennigh, White Rock's Technical Advisor commented: "The acquisition of AuStar will give White Rock control over one of the high-grade gems of the Victorian gold fields. As the acquisition is not expected to significantly impact White Rock's current exploration momentum in Alaska, it gives White Rock shareholders exposure to a potentially high-value year-round exploration asset in one of the most prolific gold belts on earth. Along with this comes the element of production at Morning Star which White Rock plans to ramp up to underpin White Rock's cash flow going forward. Such an acquisition opportunity comes along rarely and is expected to help White Rock build a solid foundation upon which to grow."

AuStar Gold Board unanimously recommends the Scheme

The Board of AuStar Gold unanimously recommends that AuStar Gold shareholders vote in favour of the Scheme, in the absence of a superior proposal and subject to an independent expert's report concluding that the Scheme is in the best interests of AuStar Gold shareholders. Each AuStar Gold Director intends to vote in favour of the Scheme in respect of all the AuStar Gold shares which they control, subject to those same qualifications.

Key benefits to AuStar Gold shareholders

- The merged group will have a larger and more diverse asset portfolio. In particular, AUL shareholders will hold shares in WRM which owns 100% of the following projects:

o The Red Mountain Project in central Alaska, being a globally significant silver-rich zinc VMS project and its large IRGS-style (Last Chance) gold anomaly asset; and

o The advanced Mt Carrington gold and silver project in northern NSW.

- The merged group is expected to benefit from an enlarged technical and management team, with both domestic and international expertise highly relevant to the enlarged group's portfolio of both Australian and North American assets.

- The merged group's strongly enhanced balance sheet is expected to support the management team in advancing the development of the Morning Star Gold Mine along with both the in-mine and regional exploration programs.

- The merged group is expected to have an enhanced profile within both domestic and international capital markets, providing improved access to funding for future growth.

- The stronger financial position, diversification and project development opportunities within the merged group are expected to result in broader market support and investor interest in the merged group's securities.

- The securities of the enlarged, merged group are expected to enjoy greater liquidity and trading volume, providing more flexibility to shareholders.

Key benefits to White Rock shareholders

- White Rock shareholders will gain exposure to the significant exploration potential and interest that currents exists in the Victorian goldfields area.

- The significant exploration potential of the Victorian land package offers a counter-cyclical and news flow opportunity to its highly prospective but northern hemisphere Alaskan project at Red Mountain.

- White Rock will join the league of Australian gold producers, the goal for many a small Junior exploration company.

- The merged group will have a larger and more diverse asset portfolio, covering two first world jurisdictions (the USA and Australia), and gold, silver and zinc, all with JORC Resources.

- The merged group is expected to have enhanced access to new investment and other opportunities through its increased size, stronger financial capability and diversified share holder base.

About White Rock Minerals Ltd:

White Rock Minerals Ltd. (ASX:WRM) is a diversified explorer and near-stage producer, headquartered in Ballarat, Victoria. The Company's flagship exploration project is Red Mountain in central Alaska. At Red Mountain, there are already two high grade zinc - silver - gold - lead VMS deposits, with an Inferred Mineral Resource of 9.1 million tonnes @ 12.9% ZnEq for 1.1 million tonnes of contained zinc equivalent. The Company is also exploring its recently discovered large intrusion related gold anomaly at Last Chance, also located in the Tintina gold belt of Alaska, home to multi-million gold ounce deposits like Pogo, Fort Knox and the Donlin Project. The Company also has the Mt Carrington project, located near Drake, in Northern NSW, which is a near-production precious metals asset with a resource of 341,000 ounces of gold and 23.2 million ounces of silver on an approved mining lease, and with a Gold First PFS and JORC Reserve. White Rock Minerals is listed on the Australian Stock Exchange.

Source: White Rock Minerals Ltd.



Contact:

Paul McNally Director
AuStar Gold Ltd.
Paul.mcnally@austargold.com

Matt Gill MD&CEO
White Rock Limited
mgill@whiterockminerals.com.au