August 20, 2014
August 20, 2014, Vancouver, BC — Starcore International Mines
Ltd. (“Starcore” or the “Company”) (TSX: SAM) is pleased to announce
that the Board of Directors has declared its first annual dividend in
the Company’s history. A dividend of $0.02 per share on the Common
Shares of the capital of the Company, payable on September 30, 2014 to
shareholders of record on August 29, 2014, has been declared for 2014.
Normal Course Issuer Bid
The Company further announces that it has allocated up to $1,000,000 for
a normal course issuer bid to purchase common shares of the Company.
Purchases will be made on the TSX at the market price at the time of
acquisition. The commencement of the bid is subject to the approval of
Acquisition of American Consolidated Minerals Corp.
Starcore is also pleased to announce the signing of a letter of intent
with American Consolidated Minerals Corp. (“AJC”) (TSXV: AJC) (the
“LOI”) that would see the Company acquire all of the outstanding
securities of AJC in an all-share transaction (the “Transaction”) to be
completed pursuant to a court approved Plan of Arrangement under the Business Corporations Act
(British Columbia). Under the terms of the planned acquisition, each
AJC shareholder would receive one Starcore common share for every three
AJC common shares held.
AJC is a Vancouver-based mineral exploration company with three exploration projects located in the United States and Mexico.
Highlights of the Acquisition
AJC Property Portfolio
Toiyabe Property: Nevada, USA
- AJC’s portfolio of exploration properties presents
Starcore with attractive low-risk/high reward exploration opportunities
in North America.
- AJC’s shareholders will be able to participate in a
larger, well capitalized Starcore, which has cash holdings of
approximately $9.5 million, a portion of which will be available to fund
advancement of the AJC properties.
- The AJC properties will provide SAM with the
potential to increase its resource base in North America utilizing the
current cash flow of the San Martin mine. There is the potential for any
of the AJC properties to have a significant discovery which would
greatly increase SAM’s resources and have a significant effect on the
valuation of SAM with a relatively small capital cost.
AJC is currently focused on the Toiyabe property. With an indicated mineral resource of over 173,000 ounces of gold (Summary Report and Mineral Resource Estimate on the Toiyabe Gold Property, Lander County, Nevada
, May 27, 2009 by Paul D. Noland, P. Geo., page 24)(1)
, the Toiyabe Property has demonstrated similar structural
characteristics to the Cortez, Cortez Hills and Pipeline deposits, all
located within 10 miles of the Toiyabe Property. A drill program
encompassing RC and select Core will be developed to target/expand the
deeper gold mineralization identified in previous exploration campaigns.
There are no property payments required on this property until 2018.
Sierra Rosario: Sinaloa, Mexico
Located within the historically productive Sierra Madre Occident
geological province in the northern Mexican state of Sinaloa, the Sierra
Rosario property consists of two large mineral exploration concessions
totalling 978.57 hectares. AJC has entered into a joint venture
agreement with International Northair Mines to explore the property and
currently owns an unencumbered 50% interest in the property.
Lone Ranch: Washington State, USA
Previous production and exploration work within and just adjacent to
this property demonstrate the opportunity for development through
exploration of the Lone Ranch property. A HEM survey was flown in 2007
which defined extensive areas of possible mineralized targets. The
property is readily accessible and located within 20 miles of the Kettle
River Processing facility operated by Kinross. There are no property
payments required on this property until 2018.
The LOI provides that AJC shareholders will be entitled to receive one
common share of Starcore (a “Starcore Share”) for three (3) common
shares of AJC (the “AJC Shares”) held by such AJC shareholder (the
“Exchange Ratio”), subject to adjustment, pursuant to a plan of
arrangement under the Business Corporations Act (British Columbia) (the
“Arrangement”). In addition, each holder of the outstanding stock
options and common share purchase warrants of AJC (the “AJC Options”)
will receive such number of replacement options or warrants of Starcore
(the “Starcore Options”) based upon the Exchange Ratio, and the exercise
price of the replacement Starcore Options will be adjusted based upon
the Exchange Ratio.
Currently, there are 17,569,191 AJC Shares, 660,000 AJC Options and
1,671,416 common share purchase warrants outstanding. In connection
with the Transaction, Starcore will issue approximately 5,856,397
Starcore Shares, 220,000 Starcore Options and 557,139 common share
purchase warrants. Following completion of the Transaction, former AJC
shareholders would hold approximately 4% of the outstanding Starcore
The Transaction is subject to the execution of a definitive Arrangement
Agreement. The definitive agreement will include covenants,
representations and warranties customary for transactions such as the
Transaction, as well as deal protection measures and provisions for
exclusive dealing similar to those contained in the LOI. Starcore
expects to execute a definitive agreement in respect of the Transaction
within 30 days.
The Transaction will be subject to the approval of the Supreme Court of
British Columbia, the TSX and the TSX Venture Exchange. Completion of
the Transaction is further subject to the approval by two-thirds of the
votes cast by the holders of AJC Shares and AJC Options voting together
as a class and who are present and voting at a special meeting of AJC
shareholders to be called to consider the Transaction.
Deal Protection Measures
The Letter of Intent includes deal-protection provisions in favour of
Starcore, including a non-solicitation covenant from AJC (except for
certain unsolicited approaches) and a break fee upon signing the
definitive agreement of C$200,000 if, following an unsolicited superior
proposal, AJC wishes to pursue that proposal.
Voting lock-up agreements
Pursuant to the Letter of Intent, AJC has agreed to seek voting
agreements from directors, officers and shareholders holding in
aggregate a minimum of 25% of the outstanding shares of AJC as a
condition to the execution of the definitive Arrangement Agreement.
The Board of Directors of each company has approved the terms of the Transaction.
Officers and Directors of Starcore hold in aggregate 2,246,791 AJC
Shares and 555,000 AJC Options, and have agreed to participate in the
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 which are exclusively located in Mexico.
About American Consolidated
American Consolidated is dedicated to the principles of environmentally
sound mining practices and believes that environmental stewardship and
mining can co-exist.
For details on the Company and its properties, visit the Company’s website at www.americanconsolidatedminerals.com
(1) This estimate was prepared as at May 27, 2009. Indicated
Resources consist 173,562 ounces of gold in 4,975,000 tons of rock, for a
calculated average grade of 0.0349 ounces per ton (opt) at a 0.01 opt
cut-off. See technical report entitled “Summary Report and Mineral
Resource Estimate on the Toiyabe Gold Property Lander County, Nevada for
American Consolidated Minerals Corporation” dated May 27, 2009 filed by
American Consolidated Minerals Corporation on its SEDAR profile at www.sedar.com
prepared by Paul Noland, P. Geo., for information regarding the key
assumptions, parameters and methods used to estimate the mineral
resources. The technical report was reviewed by Mr. David Gunning, P.
Eng, on behalf of the Company. To the Company’s knowledge, information
and belief, there is no new scientific or technical information that
would make disclosure of the mineral resources inaccurate or misleading.
This press release contains forward-looking statements that involve
risks and uncertainties. These forward-looking statements relate to,
among other things, receipt of approval from the TSX for the normal
course issuer bid, completion of the acquisition of AJC, expectations
with respect to the AJC properties, payment of the dividend to
shareholders of Starcore and other expectations, intentions and plans
contained in this press release that are not historical fact. When used
in this press release, the words “plan,” “expect,” “believe,” and
similar expressions generally identify forward-looking statements. These
statements reflect our current expectations. They are subject to a
number of risks and uncertainties, including, but not limited to,
changes in market conditions. Factors that could cause future events to
differ from those anticipated in forward looking statements include:
inability to negotiate a definitive agreement for the AJC transaction;
delays in obtaining, or inability to obtain, required approvals,
including the approval of the TSX Venture Exchange, TSX or shareholders
of AJC; 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 forward-looking information.
ON BEHALF OF STARCORE INTERNATIONAL
Signed “Robert Eadie”
Robert Eadie, Executive Chairman, President & CEO
FOR FURTHER INFORMATION PLEASE CONTACT: Telephone: 1-604-602-4935
Toll Free: 1-866-602-4935 / Facsimile: 1-604-602-4936
The Toronto Stock Exchange has not reviewed nor does it
accept responsibility for the adequacy or accuracy of this press
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