AuStar Gold Limited (ASX:AUL) announced that it has entered into convertible note agreement for a private placement of 14,000 convertible notes at a par price of AUD 100 per note for gross proceeds of AUD 1,400,000 on April 3, 2020. Each investor will also receive 200 options for each note issued to them, exercisable at AUD 0.2 per share on or before June 30, 2021. The transaction will include participation from sophisticated, professional and other investors, including new investors Amery Partners Pty. Ltd., a related party of director Philip Amery, for AUD 50,505, 101,010 options, and maximum number of 270,202 shares upon conversion, McNally Clan Super, an associate of director Paul McNally, for AUD 265,000, 530,000 options, and maximum number of 1,417,749 shares upon conversion, and M&C Gill SMSF, an associate of director Matthew Gill, for AUD 9,000, 18,000 options, and maximum number of 48,150 shares upon conversion. The notes are unsecured, have a face value of AUD 100 per note, bear fixed interest at 7% per annum, payable quarterly in arrears commencing on and from 30 June 2020, will mature on March 31, 2021, may be converted into common shares, at the election of the investor, prior to the maturity date at a conversion price of AUD 0.2 per share, and is repayable in cash at 105% face value, at the election of the investor, or convertible into shares on the maturity date at 80% of the average daily volume-weighted-average-price during the 30 trading days prior to that date. The company will incur issuance expenses of AUD 20,000 in the transaction. The transaction is expected to close on or before April 7, 2020, and is subject to shareholders' approval in its general meeting to be held on June 26, 2020. On the same date, the company issued 10,755 notes for proceeds of AUD 1,075,500 in its first tranche.