VANCOUVER, BRITISH COLUMBIA--(Marketwired - Jan. 23, 2015) - Starcore International Mines Ltd. (SAM.TO) (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.
Background
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:
- The El Creston Project in Sonora, Mexico;
- The Ajax Project in British Columbia; and
- The Molybrook Project in Newfoundland.
To view the accompanying chart, visit the following link: http://media3.marketwire.com/docs/CrestonMolyProperties_Chart.jpg
El Creston Project, Sonora, Mexico:2 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 $561.9 million 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.
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