January 23, 2015
Vancouver, B.C. – Starcore International Mines Ltd.
(the “Company”) announces that it has entered into an agreement to
acquire all of the shares of Creston Moly Corp. (“Creston” or “Creston
Moly”) from Deloitte Restructuring Inc, in its capacity as trustee in
bankruptcy of Mercator Minerals Ltd. (the “Trustee”), at a purchase
price of Cdn$2 million (the “Transaction”).
The Transaction is subject to Creston being discharged from bankruptcy,
clearing the way for Starcore to complete the Transaction and to
continue with the development and further exploration of Creston’s
properties, free and clear from Creston’s liabilities as at the date of
bankruptcy. Creston Moly is a British Columbia company that owns,
through its subsidiaries, a 100% interest in three molybdenum-copper
projects in Mexico, British Columbia and Newfoundland.
All technical and non-technical information pertaining to Creston
and Mercator included in the news release has been obtained from the
SEDAR filings of those companies.
In June, 2011, Mercator Minerals Ltd. (“Mercator”), a TSX listed
company, acquired Creston Moly in a cash and shares deal valuing
Creston Moly at approximately Cdn$194 million. At that time,
the Board of Directors of Creston Moly, after receiving the
recommendation of its special committee and consultation with its
financial and legal advisors, unanimously supported the arrangement
whereby Mercator would acquire all of the issued and outstanding common
shares of Creston. BMO Capital Markets, financial advisor to Creston
Moly and its Board, provided a fairness opinion to the effect that the
consideration (of $194 million) was fair, from a financial point of
view, to the shareholders of Creston Moly 1.
Creston shareholders voted in favour of the transaction. The most
significant asset in this acquisition was the El Creston project in
Sonora, Mexico which has been advanced to a completed Preliminary
Economic Assessment (“PEA”).
On September 5, 2014, pursuant to the Bankruptcy and Insolvency Act (Canada), Mercator and Creston Moly were deemed to have filed assignments in bankruptcy.
Creston Moly is a British Columbia company that owns, through its subsidiaries, a 100% interest in the following properties:
El Creston Project, Sonora, Mexico: 2
- The El Creston Project in Sonora, Mexico;
- The Ajax Project in British Columbia; and
- The Molybrook Project in Newfoundland.
The El Creston molybdenum property is located in the State of Sonora,
Mexico, 175 kilometres south of the US Border and 145 kilometers
northeast of the city of Hermosillo. In 2010, a PEA was prepared on
the project by an independent consulting firm. The result of this study
indicated that the El Creston molybdenum-copper deposit had a US $561.9million net present value after tax
(using an 8% discount rate). The internal rate of return (after tax)
was calculated to be 22.3% and a capital cost payback was calculated to
be four years.
Other highlights of the report include:
- Large moly-copper deposit in a mining-friendly jurisdiction.
Total Measured and Indicated Resources of 215 million tonnes grading
0.071% Mo and 0.06% Cu, containing 336 Mlbs Mo and 281 Mlbs Cu. Mineral
resources that are not mineral reserves do not have demonstrated
- Initial Capital cost:
US$655.9million with payback of 4 years, based on metal prices of $15/lb
Mo and $2.60/lb Cu. Metal recoveries were estimated at 88% for Mo and
84% for Cu;
- Low Operating Cost:
operating cost of $US4.12/lb Mo, net of copper credits, 0.84:1 waste to
ore strip ratio within an optimized pit containing an additional 7.6
million tonnes of Inferred Resources responsible for $20M of the NPV;
- Excellent infrastructure: Road accessible with a 230kV power grid within 50 km;
- Apart from the PEA,
recommendations have been made to test known mineralization below the
current pit-limiting “Creston Fault” where results such as drill hole
EC08-54 returned 241.4m at 0.083% Mo and 0.059% Cu to a depth of 495m
in the Red Hill Deep zone.
David Gunning, P.Eng., a director of the Company and Chief Operating
Officer, is the Company’s qualified person under NI 43-101, and has
reviewed and approved the scientific and technical disclosure on the El
Creston Project disclosed in this news release.
Ajax, British Columbia: 3
Ajax Molybdenum Property is comprised of 11,718 hectares and is located
13 km north of Alice Arm, British Columbia. The Ajax Property, one of
North America’s largest undeveloped molybdenum deposits occupying a
surface area of approximately 600 by 650 metres, is a world class
primary molybdenum property in the advanced stage of exploration.
Molybrook, Newfoundland 4
Creston’s Molybrook molybdenum property located on the south coast of
Newfoundland is centred 2.5 km from the outport of Grey River less than 4
kilometres from a deep water, ice free navigable fjord. The property
hosts a 3 km long trend in which at least three zones of at surface
molybdenum mineralization occur: Molybrook, Wolf and Chimney Pond. To
date, almost all exploration has been completed on the Molybrook Zone
where a large porphyry molybdenum deposit has been outlined.
“We have taken the opportunity to acquire an undervalued
project in Creston Moly, which comes with a Preliminary Economic
Assessment on El Creston, along with two other high quality projects in
Canada” said Robert Eadie, President & CEO of Starcore. “Despite
the current state of moly and copper prices, we are looking at an asset
that was acquired for $194 million over three years ago. We believe
that the outlook for moly and copper will undoubtedly improve in the
future, possibly making this a tremendous asset acquisition!”
Deloitte Corporate Finance Inc. acted as financial advisor and Gowling
Lafleur Henderson LLP acted as legal advisor to the Trustee. McMillan
LLP acted as legal advisor to Starcore.
Starcore is engaged in exploring, extracting and processing gold and
silver through its wholly-owned subsidiary, Compañia Minera Peña de
Bernal, S.A. de C.V., which owns the San Martin mine in Queretaro,
Mexico. The Company is a public reporting issuer on the Toronto Stock
Exchange. The Company is also engaged in owning, acquiring, exploiting,
exploring and evaluating mineral properties, and either joint venturing
or developing these properties further. The Company has interests in
properties located in Mexico, Canada and the United States.
ON BEHALF OF STARCORE INTERNATIONAL MINES LTD.
Signed “Robert Eadie”
Robert Eadie, President & Chief Executive Officer
FOR FURTHER INFORMATION PLEASE CONTACT:
Telephone: (416) 640-1936
Telephone: (416) 640-1936
Toll Free: 1-866-602-4935
The Toronto Stock Exchange has not
reviewed nor does it accept responsibility for the adequacy or accuracy
of this press release.
This press release contains data derived from SEDAR and published data
that have been filed on SEDAR. All data has been footnoted as to their
sources and the reader is cautioned as to their current applicability as
the information and reports are dated and reporting guidelines may have
changed due to regulatory changes in the reporting jurisdictions. The
reader is cautioned not to place undue reliance on the data presented
herein and the implications of such data. This press release also
contains forward-looking statements that involve risks and
uncertainties. The forward-looking statements relate to and imply
expectations, intentions and plans contained in this press release that
are not historical fact. They are subject to a number of risks and
uncertainties, including, but not limited to, changes in market
conditions and fluctuating metal prices. Factors that could cause future
events to differ from those anticipated in forward looking statements
include: discrepancies between actual and estimated mineral resources;
the success of exploration and permitting activities; and other factors
that could cause the Company’s actual results, performance or
achievements to be materially different from those expressed or implied
by such information. Although the Company has attempted to identify
important factors that could cause actual results, performance or
achievements to differ materially from those contained in
forward-looking information, there can be other factors that cause
results, performance or achievements not to be as anticipated, estimated
or intended. There can be no assurance that such information will prove
to be accurate or that management’s expectations or estimates of future
developments, circumstances or results will materialize. As a result of
these risks and uncertainties, any proposed transaction could be
modified, restricted or not completed, and the results or events
predicted in these forward looking statements may differ materially from
actual results or events. Accordingly, readers should not place undue
reliance on the implications of forward-looking information.
The information in this news release relating to the acquisition of
Creston Moly by Mercator has been drawn from documents filed under the
Creston Moly Corp. issuer profile on SEDAR, more specifically:
Creston’s Management Information Circular dated May 9, 2011 and filed on
SEDAR on May 16, 2011, and Creston’s news release of June 6, 2011 as
filed on SEDAR on June 7, 2011.
2 The technical information in this news release relating to
the El Creston Project is based on the technical report entitled
“Preliminary Economic Assessment, El Creston Project, Opodepe, Sonora,
Mexico”, dated December 16, 2010, filed under the Creston Moly Corp.
issuer profile on SEDAR.. Information regarding the effective date of
the mineral resources, key assumptions, parameters and methods used to
estimate the mineral resources, and known risks that materially affect
the mineral resources can be found in the technical report.
3 Technical information in this news release relating to the
Ajax Project is based on the NI 43-101 Resource Estimate Press Release
entitled “Tenajon Announces 75% Increase in Indicated Molybdenum
Resources at Ajax Project”, dated May 15, 2008 and the technical report
entitled “Update of Resource Estimation, Ajax Property, Alice Arm,
British Columbia”, dated April 18, 2007, both of which are filed under
the Tenajon Resources Corp. issuer profile on SEDAR.
4 Technical information in this news release relating to the
Moly Brook property is based on the technical report entitled “Technical
Report, Moly Brook Property, Grey River Area, Newfoundland, Canada”,
dated June 15, 2009, filed under the Tenajon Resources Corp. issuer
profile on SEDAR.
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