Vanstar Mining Resources Inc.

Vanstar Mining Resources Inc.

November 17, 2014 08:30 ET

Vanstar Grants an Option on the Nelligan Project to IAMGOLD

LA PRAIRIE, QUEBEC--(Marketwired - Nov. 17, 2014) - Vanstar Mining Resources Inc. (TSX VENTURE:VSR) (« Vanstar ») is pleased to announce the execution of an Option and Joint Venture Agreement (the "Agreement") with IAMGOLD Corporation ("IAMGOLD") for the Nelligan gold project (the "Project"). Under the terms of the Agreement, Vanstar has granted IAMGOLD an option to earn up to an 80% interest in the Project, which is comprised of 92 mining claims and located 45 km south of the village of Chapais in the Province of Quebec.

Initially, IAMGOLD has a first option to earn a 50% undivided interest in the Nelligan Project in consideration for: (a) staged cash payments totalling $550,000, and (b) the completion of $4,000,000 in exploration expenditures (the "Expenditures") on the Project over a period of four and a half (4 1/2) years ending on May 12, 2019. The Agreement provides for a firm commitment to pay $200,000 in cash payments before November 12, 2015 and complete $900,000 in exploration expenditures before November 12, 2016.

Following the exercise of the first option, IAMGOLD can elect a second option to earn an additional 25% undivided interest, to hold a 75% interest in the Project, in consideration for the delivery of a pre-feasibility study and making further annual cash payments totalling $225,000, over a period of three and half (3 1/2) years following the exercise of the first option.

IAMGOLD can elect a third option to earn an additional 5% undivided interest, to hold a 80% interest in the Project, in consideration for the delivery of a feasibility study and a cash payment of $275,000, at the election of IAMGOLD to pursue and complete the feasibility study following the exercise of the second option.

Following this work, Vanstar will retain a 20% net interest, which will be free carried. However, IAMGOLD will have the right to acquire this interest based on an independent valuation once a feasibility study has been completed. Should Vanstar's interest be purchased, Vanstar would retain a 1.5% net smelter return royalty ("NSR") on the Project.

In addition to the cash payments outlined above, IAMGOLD will, from the time Vanstar holds a free carried interest, make annual cash payments of $50,000 to Vanstar until such time a production decision is made.

The agreement also provides for the formation of a joint venture should IAMGOLD elect not to proceed with either the second or third option which includes provisions related to operatorship, project funding, dilution, conversion of Vanstar's interest to a free carried interest at its election and an interest buyback of the IAMGOLD interest as subject to specified terms and conditions.

IAMGOLD is currently finalizing program planning and design for an initial exploration drilling program to be initiated before year end.

"We are very pleased to have reached an agreement with an experienced partner such as IAMGOLD. We are now assured, despite a difficult mining context, of the further development of the Nelligan project, and we all hope that it becomes a major project over the next few years" stated the President of the company Mr. Guy Morissette.

About Nelligan

The Nelligan property consists of 92 claims with an area of approximately 4,800 hectares and is located south of the town of Chapais, in northern Quebec. This property contains several interesting gold showings including Liam, Dan and Lake Eu.

Liam and Dan showings were discovered by drilling in 2013 and 2014. These new gold structures were intersected to date over a length of 400 meters at a depth of over 200 vertical meters. The presence of gold is constant throughout the drilling. These zones remain open along strike and at depth.

The area of Lake Eu was discovered in the 1990s It is located about 500 meters east of the Liam-Dan area. This gold occurence was intersected by drilling over 700 meters and remains open both at depth and laterally.

Liam, Dan and Lake Eu showings appear to fall within a corridor highlighted in the regional magnetic data identified over a potential strike length of several kilometres.

About Vanstar

Vanstar is an exploration company focused on the acquisition, exploration, and development of mineral exploration projects in Quebec.

Neither the TSX Venture Exchange nor its regulatory services provider accepts responsibility for the adequacy or accuracy of this press release.

This press release may contain forward-looking statements involve known and unknown risks and uncertainties that could cause actual results to differ materially from targeted results. These risks and uncertainties include those described in the periodic reports of Vanstar, including the annual report or document file Vanstar occasionally with securities regulatory authorities

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