Geostar Metals Inc.

Geostar Metals Inc.

November 01, 2006 14:53 ET

Geostar Continues Negotiations for MMM Investment

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Nov. 1, 2006) - Geostar Metals Inc. (the "Corporation") (TSX VENTURE:GOS), a Vancouver-based merchant banking company, announces that further to its news release dated October 13, 2006 it has, in consultation with CIS Energy Inc. ("CIS"), allowed the Main Agreement and Agency Agreements between CIS and MontazhMalikMunai LLP ("MMM") to lapse by not seeking an extension to the closing date of October 30, 2006. The Corporation's decision is based upon ongoing negotiations with the current participants of MMM to represent the agreed business terms in a more relevant structural agreement that better conforms to the Corporation's acquisition standards. These negotiations, in part, are based on the principle that all consideration related to the investment in MMM be paid inside Kazakhstan and therefore the Cdn$15 million escrow funds provided pursuant to the Agency Agreement have been returned to Quest Capital Corp. as of October 31, 2006. The Corporation intends to complete its acquisition of the issued and outstanding shares of CIS for nominal consideration to its shareholders. Payment of any material consideration under the Corporation's agreement with CIS and its shareholders requires, among other things, that the agreements between CIS, MMM and its participants for the acquisition of MMM be amended on terms satisfactory to the Corporation.

The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved or disapproved the contents of this press release. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

This news release contains certain statements that may be deemed "forward-looking statements". All statements, other than statements of historical fact, that address events or developments that Geostar expects to occur, are forward-looking statements. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Although Geostar believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in the forward-looking statements. Factors that could cause the actual results to differ materially from those in forward-looking statements include market prices, exploration and production successes or failures, continued availability of capital and financing, inability to obtain required shareholder or regulatory approvals, and general economic market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. Forward-looking statements are based on the beliefs, estimates and opinions of Geostar's management on the date the statements are made.

Contact Information

  • Geostar Metals Inc.
    Neil Halldorson
    President and CEO
    (604) 669-4899
    (604) 685-2345 (FAX)