Creso Exploration Announces Closing of $4.6 Million Brokered Financing, Completion of Qualifying Transaction and Name Change

Welcome, Guest

Markets

Symbol

Name

Creso Exploration Announces Closing of $4.6 Million Brokered Financing, Completion of Qualifying Transaction and Name Change
Marketwire.com - Jun 3, 2010

MONTREAL, QUEBEC--(Marketwire - June 3, 2010) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

CRESO EXPLORATION INC. (formerly, "Willowstar Capital Inc.") ("Creso Exploration" or the "Corporation")(TSX VENTURE:WWM.H)(to become CXT) is pleased to announce the closing on June 1, 2010 of its previously announced Qualifying Transaction, consisting of the acquisition of all of the issued and outstanding securities of Creso Resources Inc. ("Creso Resources") (see the Corporation's press releases dated June 11, 2009 and December 23, 2009 and its Filing Statement dated March 31, 2010 for further details), and the completion of a concurrent brokered private placement by Creso Resources for aggregate gross proceeds of $4.6 million (the "Financing"). The Corporation has also appointed new directors and officers (as disclosed in the Filing Statement) and has changed its name to "Creso Exploration Inc."

The Financing consisted of the offering and issuance of an aggregate of 9,200,000 units of Creso Resources (each, a "Unit") at a price of $0.50 per Unit for gross proceeds of $4,600,000, with Canaccord Genuity Corp. (the "Agent") acting as agent. Each Unit was comprised of one common share of Creso Resources and one common share purchase warrant of Creso Resources, with each such warrant entitling the holder to subscribe for one additional common share at a price of $0.65 for a period of 24 months from the date of closing. In connection with the Financing, the Corporation paid the Agent a cash commission equal to 8% of the gross proceeds sold and issued to the Agent 736,000 non-transferable share purchase warrants (the "Agent's Warrants"), being an amount as is equal to 8% of the Units sold pursuant to the Financing, with each Agent's Warrant being exercisable into Unit at a price of $0.50 per Unit for a period of 24 months from the closing. The Corporation also reimbursed the Agent for reasonable fees and expenses incurred in connection with the Financing and paid the Agent a corporate finance fee of 60,000 Units. The proceeds of the Financing will be used for the purposes of exploration on Creso Resources' properties in the Shining Tree District of Ontario and for general working capital purposes. It should be noted that the terms of the Financing differ from the description provided thereof in the Corporation's Filing Statement dated March 31, 2010 in two material respects: (i) the total amount raised was $4,600,000, whereas the Filing Statement contemplated a maximum offering size of $4,000,000; and (ii) each Unit issued under the Financing was comprised of one common share and one whole warrant, whereas the Filing Statement contemplated that such units might be comprised of one common share and one-half of one warrant.

In connection with the completion of the Qualifying Transaction, the Corporation has completed its three-cornered amalgamation with its wholly-owned subsidiary and Creso Resources and has issued the following securities of Creso Exploration to holders of Creso Resources securities: an aggregate of 62,794,481 common shares (consisting of 53,534,481 shares to pre-Financing holders of Creso Resources shares; and 9,260,000 shares to holders of Creso Resources shares issued in connection with the Financing); an aggregate of 26,264,467 common share purchase warrants (consisting of 17,004,467 warrants to pre-Financing holders of Creso Resources warrants; and 9,260,000 warrants to holders of Creso Resources warrants issued in connection with the Financing); 300,000 broker warrants; 736,000 agent's warrants; 4,000,000 options to acquire common shares of Creso Exploration; and a debenture in the principal amount of $1,900,000 that is convertible into common shares of Creso Exploration at a conversion price of $0.50 per share. The Corporation also issued 1,500,000 common shares in payment of finder's fees upon completion of the Qualifying Transaction. It should be noted that the exchange ratio employed for the purposes of calculating the number of Creso Exploration securities issuable to former holders of Creso Resources securities is one (1) for one (1). All convertible securities maintain equivalent exercise terms as those of initial grant or issuance. For a complete summary of such securities and their principal terms, please refer to the Corporation's Filing Statement dated March 31, 2010, a copy of which can be accessed via the Corporation's corporate profile at www.sedar.com.

After giving effect to the foregoing issuances of securities (and having regard to the previously outstanding securities of the Corporation, being an aggregate of 5,033,249 common shares and 299,999 options to acquire common shares), the total issued and outstanding capital of Creso Exploration consists of the following: 69,327,730 common shares; 26,264,467 common share purchase warrants; 300,000 broker warrants; 736,000 agent's warrants; 4,299,999 options to acquire common shares of Creso Exploration; and a debenture in the principal amount of $1,900,000 that is convertible into common shares of Creso Exploration at a conversion price of $0.50 per share.

An aggregate of 3,918,334 of the foregoing shares, 400,000 of the foregoing warrants and 3,100,000 of the foregoing stock options will be subject to a surplus security escrow agreement, whereby a 36-month escrow period will apply, with five percent (5%) being releasable on receipt of final approval of the TSX Venture Exchange (the "Exchange"), five percent (5%) being releasable on the date that is 6 months from final Exchange approval, ten percent (10%) being releasable on the dates that are 12 months and 18 months from final Exchange approval, fifteen percent (15%) being releasable on the dates that are 24 months and 30 months from final Exchange approval and forty percent (40%) being releasable on the date that is 36 months from final Exchange approval. In addition, an aggregate of 15,104,467 shares and 15,104,467 warrants are subject to a four-month hold period imposed under the rules of the Exchange, with 20% of the foregoing securities having been released upon closing of the Qualifying Transaction and 20% of the remaining securities being released each month thereafter and an aggregate of 3,475,000 shares are subject to a one-year hold period imposed under the rules of the Exchange, with 20% of the foregoing shares having been released upon closing of the Qualifying Transaction and 20% of the remaining shares being released every three months thereafter.

The foregoing escrow agreement and legended securities are in addition to the escrowed securities that were deposited under a CPC escrow agreement at the time of completion of the Corporation's initial public offering. A further 1,019,999 common shares are held under that agreement, with ten percent (10%) being releasable on receipt of final Exchange approval and a further fifteen percent (15%) being releasable on each of the six-month, twelve-month, eighteen-month, twenty-four month, thirty-month and thirty-six-month anniversaries of such approval.

Effective upon closing of the Qualifying Transaction, the following individuals have been appointed as directors and officers of the Corporation: Pierre Gauthier (Chairman and a Director); André Thibault (Director); Barry Coughlan (Director); Richard Groome (Director); Mark Raguz (Director); Marc Filion (President and Chief Executive Officer); Vatché Tchakmakian (Chief Financial Officer); and Luce Saint-Pierre (Corporate Secretary).

The TSX Venture Exchange has previously granted conditional approval to the listing of the common shares of the Corporation resulting from the Qualifying Transaction, subject to receipt of final submission documents, which have now been delivered to the Exchange. Pending satisfactory review of such final materials by the Exchange, it is expected that the Corporation will graduate from the NEX, where it is currently listed, to the TSX Venture Exchange as a Tier 2 issuer and that trading of the Creso Exploration shares under the new symbol, "CXT" will commence one day after the publication by the TSX Venture Exchange of its final listing Bulletin.

Immediately prior to completion of the Qualifying Transaction, the Corporation has changed its transfer agent and registrar to Computershare Trust Company of Canada ("Computershare"). All future inquiries regarding share certificates should be directed to Computershare at: 1500 University Street, Suite 700, Montréal, Québec H3A 3S8; Phone: (514)982-7613; Fax: (514)982-7580; www.computershare.com.

For further details regarding the Qualifying Transaction, including detailed profiles of the individuals that have been appointed officers and directors of the Corporation, readers are encouraged to make reference to the Filing Statement of the Corporation that was filed on March 31, 2010 and is available under the Corporation's profile at www.sedar.com.

The Corporation's principal mining exploration holdings are located in the Shining Tree mining camp of Northern Ontario within 100 kilometres of the Timmins and Kirkland mining camps and additional interests are held in base metal properties in Guatemala. The Corporation is engaged in the identification and acquisition of early stage gold and base metals properties with demonstrable potential of hosting high grade ore deposits.

Forward Looking Statements

Except for statements of historical fact relating to the Corporation, certain information contained herein constitutes forward-looking statements. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. The Corporation undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking statements.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of the release.

For more information, please contact
Creso Exploration Inc.
Pierre R. Gauthier
Chairman
514-866-6001 x 239
514-866-6193 (FAX)