Megastar Development Corp.
TSX VENTURE : MDV
FRANKFURT : M5Q

Megastar Development Corp.
Eloro Resources Ltd.
TSX VENTURE : ELO
FRANKFURT : P2Q

Eloro Resources Ltd.

October 06, 2010 14:54 ET

Megastar and Eloro Announce Megastar Annual and Special Meeting

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 6, 2010) - MEGASTAR DEVELOPMENT CORP. (TSX VENTURE:MDV)(FRANKFURT:M5Q) ("Megastar") and ELORO RESOURCES LTD. (TSX VENTURE:ELO)(FRANKFURT:P2Q) ("Eloro") announce today that Megastar has scheduled an Annual and Special Meeting (the "Meeting") of its shareholders to be held on December 7th, 2010, to consider for approval, among customary and general matters, a special resolution adopting an arrangement (the "Arrangement") related to the previously announced business combination with Eloro Resources Ltd. ("Eloro").

Eloro and Megastar propose to complete a business combination where shareholders of Megastar will receive seventy million (70,000,000) common shares of Eloro (the "Eloro Shares") on a pro-rata basis. The Eloro Shares will be issued to Megastar, either before in trust, or in conjunction with the Arrangement, in exchange for all of Megastar's right, title and interest in and to the Simkar Property, in either case for distribution to Megastar shareholders of record as of a date to be set by the Board of Directors of Megastar (the "Distribution Record Date"). The number of Eloro Shares to be distributed to Megastar shareholders will be based on the number of outstanding shares of Megastar on the Distribution Record Date. The details of the Arrangement, including the Distribution Record Date, will be announced in a separate news release once a plan of arrangement is approved by the directors of Megastar and an arrangement agreement is executed.

Megastar has set October 8, 2010 as the Record Date (the "Record Date") for the Meeting. All Megastar Shareholders of record will be entitled to consider and vote at the Meeting on a special resolution to adopt the proposed Arrangement described above. An information circular containing the details of the Arrangement will be distributed in connection with the Meeting once an arrangement agreement and plan of arrangement are finalized and approved.

Completion of the proposed reorganization is subject to receipt of all required consents and approvals, including without limitation, court approval, shareholder approval and TSX Venture Exchange approval.

About Megastar

Megastar is an emerging resource company engaged in the acquisition, exploration and development of mineral properties in Canada. Megastar owns gold and base metal properties in Quebec and British Columbia, including the Simkar Gold Project in Val d'Or, Quebec.

About Eloro

Eloro is a junior exploration company focused on discovering and developing precious metals in the Val-d'Or mining camp, as well as quality precious and base metal resources in the James Bay region of northern Quebec. In the James Bay region, Eloro has 11 gold-copper-silver properties (1,062 claims) covering 548 km2 in the La Grande and Eastmain Greenstone Belts, proximal to Goldcorp's Eleonore Gold Project. Eloro is currently working toward acquiring an undivided 50% interest in the Simkar property from Megastar pursuant to an option and joint venture agreement entered into between the two companies in 2009.

On Behalf of the Board of MEGASTAR DEVELOPMENT CORP. 

Dusan Berka, President and CEO 

On behalf of the Board of ELORO RESOURCES INC.

Thomas G. Larsen, President and CEO

Information in this news release respecting the transaction between Megastar and Eloro and the Arrangement constitutes forward-looking information. Statements containing forward-looking information express, as at the date of this news release, the companies' plans, estimates, forecasts, projections, expectations, or beliefs as to future events or results and are believed to be reasonable based on information currently available to the companies. Forward-looking statements and information are based on assumptions that financing and personnel will be available when required and on reasonable terms, and all necessary regulatory approvals and shareholder approval will be obtained, none of which are assured and each of which is subject to a number of other risks and uncertainties. There can be no assurance that forward-looking statements will prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements. Readers should not place undue reliance on forward-looking information.

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.

Contact Information

  • Megastar Development Corp.
    Dusan Berka, P. Eng.
    President and CEO
    (604) 683-6648
    (604) 683-1350 (FAX)
    www.megastardevelopment.com
    or
    Eloro Resources Ltd.
    Thomas G. Larsen
    President and CEO
    (416) 868-9168
    (416) 361-1333 (FAX)
    www.elororesources.com