Trading Symbol: TSX-V: FS
VANCOUVER, March 25 /CNW/ - First Star Resources (FS - TSX:V) announced today it has signed Letters of Intent with International Tower Hill Mines Ltd. (ITH - TSX, NYSE-A - THM) and its subsidiary Raven Gold Alaska Inc. for the exploration and development of each of the LMS gold prospect and the WP gold prospect, both located in the Goodpaster Mining District. The LOI's give First Star the right to earn a 100% interest in each of the projects.
LMS Gold Project
First Star President & CEO Bill Wishart noted, "Acquisition of this gold project marks the return of First Star to its mining roots. Our intention is to form a gold exploration and development company around these projects. In the coming weeks we will be building our technical staff and preparing for an active season of drilling."
The LMS claim block is located in the Goodpaster Mining District and consists of 92 State of Alaska mining claims covering 61 square kilometres. The prospect is believed to be an intrusion-related vein system, with similarities to the Pogo deposit operated by Sumitomo Metal Mining Pogo LLC that was discovered in the mid 1990's. The gold mineralization in the LMS claim block occurs with strongly silicified and brecciated zones that are associated with a low-angle shear zone within, and marginal to schist units. The outcrop exposure of this zone has produced samples up to 6.2 g/t Au and the zone has been defined through drilling to a down-plunge depth of 500m.
Under the terms of the agreement, First Star has the ability to earn an initial 55% interest, and a second option to earn a further 45% for a total 100% interest. To earn the 55% interest First Star will pay US$280,000 and expend US$3.5 million on exploration. To acquire a 100% ownership, First Star will fund the project through to an advanced exploration stage by spending a further $3 million prior to December 31, 2015, or by producing, filing and having accepted by the TSX Venture Exchange a NI43-101 compliant inferred resource of two million ounces of gold using a 0.3 g/t cutoff grade, whichever costs less. An NSR royalty of 3% or 4% on gold/silver and 1% on all other products will be payable to Raven. The royalty can be reduced by 1% by paying Raven US$3 million.
West Pogo Gold Project
The West Pogo prospect is located in the Goodpaster mining district, Alaska, and represents a high-grade intrusion-related vein system gold target. The West Pogo claim block consists of 96 State of Alaska Mining Claims covering 18.9 square kilometres. The claims are immediately to the west of the Pogo Mine and can be accessed from the mine road. The gold mineralization discovered to date is related to high-temperature quartz veins like those at the Pogo mine with similar trace-element values (high rock sample 11 g/t Au with high Bi and Te). Dominant structures on the property are east-west shear zones related to northwest and northeast trending fault zones. New gold discoveries along the west margin of the Pogo mine property are encouraging for the WP project's potential.
Under the terms of the agreement, First Star has the ability to earn an initial 55% interest, and a second option to earn a further 45% for a total 100% interest. To earn the 55% interest First Star will pay US$250,000 and expend US$2.8 million on exploration. To acquire a 100% ownership, First Star will fund the project through to an advanced exploration stage by spending a further $2 million prior to December 31, 2015, or by producing, filing and having accepted by the TSX Venture Exchange a NI43-101 compliant inferred resource of one million ounces of gold using a 0.3 g/t cutoff grade, whichever costs less. An NSR royalty of 3% or 4% on gold/silver and 1% on all other products will be payable to Raven. The royalty can be reduced by 1% by paying Raven Gold US$3 million.
Up to the maximum finder's fee allowable may be payable in any combination of the cash or shares in connection with the foregoing transactions. Completion of the transaction contemplated in this news release is subject to certain conditions including, without limitation, the signing of a definitive agreement and approval of the TSX Venture Exchange.
Completion of the transactions contemplated in this news release are subject to certain conditions including, without limitation, satisfactory due diligence by First Star, the signing of definitive agreements and acceptance for filing by the TSX Venture Exchange on behalf of First Star.
The Company also wishes to announce that it has entered into private placements for the sale of 7,000,000 units at $0.35 per unit for a total of $2,450,000, where each unit consists of one common share of the Company and a share purchase warrant having an 18 month exercise term, where one whole warrant may be exercised for the purchase of one further common share of the Company at the exercise price of $0.55 per common share, subject to the following acceleration provision: if the closing trading price for the common shares of the Issuer as traded on the TSX Venture Exchange is equal to or greater than CDN$0.90 per common share for 10 consecutive trading days (the "Threshold Period"), then the Company shall issue a press release announcing the occurrence of the Threshold Period. The Subscriber shall have until 4:00 pm (Vancouver, BC Time) of the 30th calendar day after the date of dissemination of the press release to exercise the share purchase warrants (the "Accelerated Expiry Date"). The share purchase warrants shall expire on the earlier of the last day of the 18 month exercise term or the Accelerated Expiry Date. The proceeds of the private placement shall be used for working capital. Up to the maximum finder's fee comprising of any combination of cash, shares and/or warrants will be paid to eligible finders in relation to this financing.
The Company intends to conduct a drilling program on each of the LMS gold prospect and the WP gold prospect during 2010.
The technical information in this news release was reviewed by Dr. Karsten Eden, a consulting geologist, and a Qualified Person as defined in NI 43-101.
ON BEHALF OF THE BOARD
Bill Wishart, President & CEO
"NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE."
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 27E of the Exchange Act. All statements, other than statements of historical fact, included herein including, without limitation, statements regarding the anticipated content, commencement and cost of exploration programs, anticipated exploration program results, the discovery and delineation of mineral deposits/resources/reserves, business and financing plans and business trends, are forward-looking statements. Information concerning mineral resource estimates also may be deemed to be forward-looking statements in that it reflects a prediction of the mineralization that would be encountered if a mineral deposit were developed and mined. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions, or are those, which, by their nature, refer to future events. The Company cautions investors that any forward-looking statements by the Company are not guarantees of future results or performance, and that actual results may differ materially from those in forward looking statements as a result of various factors, including, but not limited to, variations in the nature, quality and quantity of any mineral deposits that may be located, the Company's inability to obtain any necessary permits, consents or authorizations required for its activities, the Company's inability to produce minerals from its properties successfully or profitably, to continue its projected growth, to raise the necessary capital or to be fully able to implement its business strategies, and other risks and uncertainties disclosed in the Company's management discussion and analysis and other information released by the Company and filed with the appropriate regulatory agencies. All of the Company's Canadian public disclosure filings may be accessed via www.sedar.com, and readers are urged to review these materials, including the technical reports filed with respect to the Company's mineral properties, carefully.
Cautionary Note Concerning Reserve and Resource Estimates
This press release uses the terms "resources", and "inferred resources". United States investors are advised that, while such terms are recognized and required by Canadian securities laws, the SEC does not recognize them. Under United States standards, mineralization may not be classified as a "reserve" unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. Mineral resources that are not mineral reserves do not have demonstrated economic viability. United States investors are cautioned not to assume that all or any part of inferred resources will ever be converted into reserves. Inferred resources have a great amount of uncertainty as to their existence and as to whether they can be mined legally or economically. It cannot be assumed that all or any part of the inferred resources will ever be upgraded to a higher category. Therefore, United States investors are also cautioned not to assume that all or any part of the inferred resources exist, or that they can be mined legally or economically.
National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101") is a rule developed by the Canadian Securities Administrators which established standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. Unless otherwise indicated, all reserve and resource estimates contained in this press release or released by ITH in the future, have been or will be prepared in accordance with NI 43-101 and the Canadian Institute of Mining, Metallurgy and Petroleum (the "CIM") Standards on Mineral Resource and Mineral Reserves, adopted by the CIM Council on November 14, 2004 (the "CIM Standards") as they may be amended from time to time by the CIM. United States shareholders are cautioned that the requirements and terminology of NI 43-101 and the CIM Standards differ significantly from the requirements and terminology of the SEC set forth Industry Guide 7. Accordingly, the Company's disclosures regarding mineralization may not be comparable to similar information disclosed by companies subject to the SEC's Industry Guide 7.
Cautionary Note Concerning Reference to Adjacent or Similar Properties
This press release contains information with respect to adjacent or similar mineral properties in respect of which the Company has no interest or rights to explore or mine. The Company advises US investors that the US Securities and Exchange Commission's mining guidelines strictly prohibit information of this type in documents filed with the SEC. Readers are cautioned that the Company has no interest in or right to acquire any interest in any such properties, and that mineral deposits on adjacent or similar properties are not indicative of mineral deposits on the Company's properties.
This press release is not, and is not to be construed in any way as, an offer to buy or sell securities in the United States.
SOURCE FIRST STAR RESOURCES INC.
For further information: For further information: Bill Wishart at (604) 609-0555 or toll free at 1-877-609-0555