Letter to Shareholders

Dear Shareholders,

During the past year Canstar has focused primarily on the restoration of the Mary March property to the Company's portfolio. The legal process of reclamation has been unreasonably long but we expect a positive resolution by year end or early 2009 following the upcoming hearing by the Adjudication Board on November 24th. Although the dispute is between Vinland Resources and the Newfoundland and Labrador Claim Recorder's office, and Canstar is not actually a direct disputant, we have been very proactive in trying to accelerate the process and preserve this potentially highly valuable asset for our shareholders.

We believe that the Mary March property provides an excellent stepping stone for Canstar to move to a new level as a successful mining exploration company. To that end we have acquired a new base-precious metals project, The Conception Bay South ( CBS ) property, which, though at an earlier exploration stage than Mary March, also has excellent potential for discovery of a number of commercial copper, lead, zinc, gold and silver mineral deposits. Following a recent airborne geophysical survey over this property and adjacent areas, which was successful in defining a number of highly prospective anomalies, we are planning a diamond drilling program to test selected targets before year end.

During the year we have also been active in exploration on other properties. We completed a third phase drilling program on our Slate Bay copper-gold property in the Red Lake area of Ontario. The wide skarn type mineralization encountered in previous drilling was shown to continue at depth and along strike. On our McFauld’s Lake property joint venture partner United Reef Limited, completed a three-hole drill program to test geophysical targets, with minimal results.

Recent and continuing turmoil in financial markets has had an extremely negative effect on mineral resource companies as evidenced by depressed share prices, but also on their ability to raise much needed exploration funds. Fortunately, Canstar is well established in the industry in terms of funding and, with high quality projects such as Mary March and CBS, well positioned to not only weather the storm until financial markets stabilize, but also to generate more value for shareholders in our exploration efforts.

On behalf of the Board of Directors I would like to thank shareholders for their support and patience. We look forward to a much more productive and successful year in 2009 as we continue to advance our properties and add value for our shareholders.

Sincerely,

David Palmer, Ph.D., P.Geo

President & CEO