Sterling Group Ventures Inc.
FRANKFURT : GD7
OTC Bulletin Board : SGGV

Sterling Group Ventures Inc.

July 15, 2008 09:20 ET

Zhong Chuan to Acquire Control of Sterling and Accelerate the Development of Lithium and Potash Salt Lake Deposit in China

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 15, 2008) - Sterling Group Ventures Inc. ("Sterling" or the "Company") (OTCBB:SGGV)(FRANKFURT:GD7) has recently signed an agreement (the "Agreement") with Zhong Chuan International Mining Holding Co., Ltd. ("Zhong Chuan") of China to complete an equity financing, to accelerate the development of the lithium and potash salt lake deposits in China and to restructure the transactions contemplated under an earlier agreement (the "Initial Agreement") entered into between Sterling (through its subsidiary) and the Beijing Mianping Salt Lake Research Institute ("Mianping").

Zhong Chuan, a private company was founded by its current chairman, Mr. Sun Ximing. It has eighteen domestic and overseas direct subsidiaries exploring and developing precious, non ferrous and ferrous metals and energy resources. Zhong Chuan is now a leading private Chinese mining company expanding internationally.

Zhong Chuan has considerable experience and success in developing mines in China. It owns 4 large mines and will work with Sterling to develop lithium and potash projects in China. Under the terms of the Agreement, Zhong Chuan will, through a related private Hong Kong company, Monte Sea Holdings Ltd. ("Monte Sea"), acquire control of Sterling and focus on the development of lithium and potash projects in China, including Dangxiongcuo Salt Lake (the "Property" or the "DXC project") and other salt lakes which have been acquired by Zhong Chuan. The Agreement contemplates the following:

- Zhong Chuan will assume Mianping's rights and obligations under the Initial Agreement;

- Upon the coming into effect of the Agreement and the termination of the Initial Agreement, Zhong Chuan will cause Mianping to repay 6,000,000 RMB to Sterling (by way of Sterling's wholly owned subsidiary);

- Zhong Chuan will cause an operating company to be established in China which shall have a registered capital of 100,000,000 RMB. All interest in the Property under the Initial Agreement will be transferred to the operating company;

- The operating company will be converted into a joint venture company ("CJV") with Monte Sea acquiring up to a 65% interest in the CJV in consideration of the registered capital;

- Monte Sea shareholders will subscribe for 5,000,000 units to be issued by Sterling at $0.15 per unit. Each unit is comprised of one common share and one two-year warrant to purchase another common share at $0.16 per share. This subscription may be increased at the mutual discretion of Sterling and Monte Sea;

- Monte Sea shareholder will be issued up to 287,910,000 common shares in Sterling upon completion of certain milestones specified in the Agreement, such that the CJV shall have exploration and mining licenses permitting it to develop the Property. All such issuances shall be subject to regulatory approvals where required.

As a result of the Agreement, Mr. Ximing Sun and Mr. Charles Yan or their nominees have been invited to join the Board of Directors of Sterling. Mr. Sun has received numerous awards in China, including being named one of the Top 10 China Mining Leaders in 2007 and Excellent Entrepreneur in China.

The Ministry of Land and Resources of the People's Republic of China has certified the following audit and examination of mineral reserves relating to the Dangxiongcuo Surface lithium brine - the DXC project:



Constituent Tonnes Grade, g/l
----------- ------ ----------

Lithium Chloride (LiCl) 858,800 2.43

Potash (KCl) 7,706,600 20.00

Boron Oxide (B2O3) 1,039,200 2.94

Bromine (Br) 95,300 0.27

Rubidium (Rb) 7,400 0.02


Current plans are to put the DXC project into production as soon as possible initially by producing up to 5000 tonnes of lithium carbonate and potash in stages. Interest to purchase in excess of all of Sterling's planned production has been received. Our lithium carbonate is estimated to be recoverable at less than US$800 per ton as compared with the current commodity price of 60,000 RMB per ton or about US$8,000 per ton (up recently from $5,500 per ton) with about 100,000 tonnes of potash initially per year as a byproduct which will require further processing, worth an estimated $66 million in additional revenue per year based on a price of US$660 per ton that Chinese fertilizer importers signed in April, 2008 with Canadian potash suppliers. Based on current prices and the audit and examination of mineral reserves by the Ministry of Land and Resources of China, the value of the lithium carbonate and potash that could be recovered through evaporation, flotation and precipitation is about US$12 billion.

It is the intention and priority of Sterling to procure expeditiously all the required regulatory approvals in China with the help of Zhong Chuan for the purpose of commencing development of the Property, and other lithium and potash resources in China. "The transactions contemplated in the Agreement will enable Zhong Chuan to expand internationally, and help to accelerate the development of the Property by Sterling", commented Mr. Raoul Tsakok, Chairman of Sterling.

ON BEHALF OF THE BOARD OF DIRECTORS

Richard Shao, PhD, President

CAUTION REGARDING FORWARD LOOKING STATEMENTS

Cautionary note to U.S. investors-The United States Securities and Exchange Commission permits U.S. mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We use certain terms in this press release based on audits conducted under Chinese methods of calculation, which the SEC guidelines strictly prohibit U.S. registered companies from including in their filings with the SEC. U.S. investors are urged to consider closely the disclosure on our Form 10-KSB which may be secured from us, or from the SEC website at http://www.sec.gov/edgar.shtml.

Safe Harbor Statement under the United States Private Securities Litigation Reform Act of 1995: Except for the statements of historical fact contained herein, the information constitutes "forward-looking statements" within the meaning of the Private Securities Litigation reform Act of 1995. Such forward looking statements, including but not limited to those with respect to the price of lithium, lithium carbonate, potash, other metals and chemicals, the timing and amount of estimated production, costs of production, reserve determination and reserve conversion rates, involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievement of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. Such factors include, among others, risks relating to the integration of the acquisition, risks that the company may not be able to raise the necessary capital, risks relating to international operations, risks relating to joint venture operations, the actual results of current exploration activities, the actual results of current reclamation activities, conclusions of economic evaluations, changes in project parameters as plans continue to be refined, future prices of lithium, lithium carbonate, potash, and other metals and chemicals, as well as those factors affecting the mineral industry. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

Security Code: A0B9TQ

Contact Information

  • Sterling Group Ventures Inc.
    Richard Shao
    President
    (604) 893-8891
    (604) 408-8515 (FAX)
    or
    Sterling Group Ventures Inc.
    Christopher Tsakok, MBA
    (604) 893-8891
    (604) 408-8515 (FAX)
    Website: www.sterlinggroupventures.com