Canstar Resources Inc. (TSXV: ROX) has entered into definitive agreements for a C$500,000 revolving bridge credit facility with BQS Systematic Equities LP, an entity controlled by director J. Paul Austin III. The facility, dated September 14, 2026, replaces and cancels a prior promissory note under which approximately C$339,600 was outstanding. Secured solely by Canstar's shareholding in Churchill Resources Inc., the facility contains no convertibility into company securities and carries limited recourse to lender BQS. Investors may be watching how the company deploys the facility ahead of its planned permanent financing.

Key Points

  • Canstar Resources Inc. (TSXV: ROX | OTCID: CSRNF) announced the facility on September 17, 2026
  • A C$500,000 revolving bridge facility with BQS replaced and cancelled the prior promissory note dated July 17, 2026
  • The facility matures nine months from the initial advance date of September 16, 2026; interest accrues at 12% per annum, payable in Churchill Resources shares
  • Investors should watch for Canstar's progress toward its stated permanent financing and any mutual agreement to expand the commitment

Facility Structure and Interest Mechanics for Canstar's BQS Bridge

The revolving facility provides up to C$500,000 in advances, fully available from closing with no borrowing-base test and amounts repaid may be re-borrowed. Interest accrues at 12% per annum on drawn principal and is payable monthly in common shares of Churchill Resources Inc., valued using a 10-trading-day volume-weighted average price. On each advance, the first three months' interest is prepaid in Churchill shares, and a minimum of six months' interest is fixed as a set number of Churchill shares regardless of when the advance is repaid. Principal remains payable in cash.

Limited-Recourse Security Tied to Canstar's Churchill Resources Stake

The facility is secured solely by a pledge of 15,834,097 Churchill Resources Inc. shares held by Canstar, together with any further shares receivable under the Golden Baie Project option agreement. BQS has no recourse to any other Canstar asset and no deficiency claim exists. Should the market value of pledged shares fall below 1.10 times the outstanding amount, BQS may direct an orderly broker sale of freely tradeable pledged shares, subject to daily volume limits. A coverage shortfall is not classified as a default and does not accelerate the facility.

Related Party Exemptions and Independent Director Approval Process

Because BQS is controlled by director J. Paul Austin III, the transaction constitutes a related party transaction under Multilateral Instrument 61-101. Mr. Austin declared his interest and abstained from all board deliberations and voting. Independent directors approved the facility, determining it reflects reasonable commercial terms no less advantageous than an arm's-length arrangement. Canstar is relying on MI 61-101 exemptions from both formal valuation and minority approval requirements, citing the facility's non-convertible, non-equity nature. A material change report was first filed on July 24, 2026, more than 21 days before the definitive agreements were executed.