TORONTO, ONTARIO--(Marketwire - July 30, 2012) - The directors of Canstar Resources Inc. (Canstar) (TSX VENTURE: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., Chairman
This News Release includes certain "forward-looking statements". These statements are based on information currently available to the Company and the Company provides no assurance that actual results will meet management's expectations. Forward-looking statements include estimates and statements that describe the Company's future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Forward-looking statements may be identified by such terms as "believes", "anticipates", "expects", "estimates", "may", "could", "would", "will", or "plan". Since forward-looking statements are based on assumptions and address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results relating to, among other things, results of exploration, project development, reclamation and capital costs of the Company's mineral properties, and the Company's financial condition and prospects, could differ materially from those currently anticipated in such statements for many reasons such as: changes in general economic conditions and conditions in the financial markets; changes in demand and prices for minerals; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; technological and operational difficulties encountered in connection with the activities of the Company; and other matters discussed in this news release. This list is not exhaustive of the factors that may affect any of the Company's forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on the Company's forward-looking statements. The Company does not undertake to update any forward-looking statement that may be made from time to time by the Company or on its behalf, except in accordance with applicable securities laws.
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.