Canstar Closes on Acquisition of Freeport-McMoRan's Option on the Mary March Property; Completes Earn-In for 50% of Property
Toronto, Ontario - July 30, 2012. The directors of Canstar Resources Inc. (Canstar) (TSX.V: ROX) wish to announce that the Company has completed the purchase of Freeport-McMoRan of Canada Limited’s (formerly Phelps Dodge Corporation of Canada Limited) (FMCL) 50% joint venture interest in the Mary March mineral properties (Properties) located in the Buchans area of Newfoundland and Labrador pursuant to a definitive purchase agreement between FMCL and Canstar, as disclosed in a prior news release.
Canstar also confirms that the option to earn a 50% interest in the Mary March joint venture and the Properties pursuant to the Exploration Option and Operating Joint Venture Agreement (the JV Agreement) between FMCL and Noranda Mining and Exploration Inc. (part of the Xstrata group of companies) (Xstrata) dated June 2, 1998, as amended, has been exercised as a result of $1.5 million in expenditures being incurred on the Properties. Canstar is now a 50% joint venture partner with Xstrata in the Mary March joint venture and the owner of a 50% interest in the Properties. On closing FMCL provided registerable documents to transfer title to the Properties to Canstar. The transfer of a portion of the Properties is conditional on certain filings being processed with the Department of Natural Resources in Newfoundland.
Pursuant to the JV Agreement, Canstar is the operator of the joint venture, and each party has a pre-emptive right with respect to the joint venture interest of the other party. Canstar is currently in discussion with Xstrata regarding the details of the upcoming exploration program.
The Mary March property is located in the Buchans area of Newfoundland and Labrador, 20 kilometers northeast of the formerly producing Buchans mine. Discovery holes drilled by the previous operator in 1999 and 2000 produced high grade base and precious metal intersections. The Buchans mine produced 16.2 million tonnes averaging 14.50 per cent Zn, 7.56 per cent Pb, 1.33 per cent Cu, 126 grams per tonne (g/t) Ag and 1.37 g/t Au over its 56-year mine life. No exploration has been carried out on this zone since 2000.
“This acquisition of a 50% interest in the Mary March joint venture is a major step forward in our long delayed plans to explore this most highly prospective property,” said Harry J. Hodge, Chairman of Canstar. “Following up-coming discussions with Xstrata, we anticipate commencement of exploration, including drilling.”
On behalf of the Board of Directors
Harry J. Hodge, P. Eng.
Harry J. Hodge, P. Eng.
Manager, Corporate Affairs
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