Starcore International Mines Ltd. (TSX:SAM) announces that it has entered into an agreement to acquire all of the shares of Creston Moly Corp. from Deloitte Restructuring Inc, in its capacity as trustee in bankruptcy of Mercator Minerals Ltd. at a purchase price of Cdn$2 million.
 

The Transaction is subject to Creston being discharged from bankruptcy, clearing the way for Starcore to complete the Transaction and to continue with the development and further exploration of Creston’s properties, free and clear from Creston’s liabilities as at the date of bankruptcy. Creston Moly is a British Columbia company that owns, through its subsidiaries, a 100% interest in three molybdenum-copper projects in Mexico, British Columbia and Newfoundland.
 

Background
 

All technical and non-technical information pertaining to Creston and Mercator included in the news release has been obtained from the SEDAR filings of those companies.
 

In June, 2011, Mercator Minerals Ltd. a TSX listed company, acquired Creston Moly in a cash and shares deal valuing Creston Moly at approximately Cdn$194 million. At that time, the Board of Directors of Creston Moly, after receiving the recommendation of its special committee and consultation with its financial and legal advisors, unanimously supported the arrangement whereby Mercator would acquire all of the issued and outstanding common shares of Creston. BMO Capital Markets, financial advisor to Creston Moly and its Board, provided a fairness opinion to the effect that the consideration (of $194 million) was fair, from a financial point of view, to the shareholders of Creston Moly.(1) Creston shareholders voted in favour of the transaction. The most significant asset in this acquisition was the El Creston project in Sonora, Mexico which has been advanced to a completed Preliminary Economic Assessment.
 

On September 5, 2014, pursuant to the Bankruptcy and Insolvency Act (Canada), Mercator and Creston Moly were deemed to have filed assignments in bankruptcy.
 

Creston Moly is a British Columbia company that owns, through its subsidiaries, a 100% interest in the following properties:

--  The El Creston Project in Sonora, Mexico; 

--  The Ajax Project in British Columbia; and 

--  The Molybrook Project in Newfoundland.

El Creston Project, Sonora, Mexico:(2) The El Creston molybdenum property is located in the State of Sonora, Mexico, 175 kilometres south of the US Border and 145 kilometers northeast of the city of Hermosillo. In 2010, a PEA was prepared on the project by an independent consulting firm. The result of this study indicated that the El Creston molybdenum-copper deposit had a US $561.9 million net present value after tax (using an 8% discount rate). The internal rate of return (after tax) was calculated to be 22.3% and a capital cost payback was calculated to be four years.
 

Other highlights of the report include:

--  Large moly-copper deposit in a mining-friendly jurisdiction. Total

    Measured and Indicated Resources of 215 million tonnes grading 0.071% Mo

    and 0.06% Cu, containing 336 Mlbs Mo and 281 Mlbs Cu. Mineral resources

    that are not mineral reserves do not have demonstrated economic

    viability; 

--  Initial Capital cost: US$655.9million with payback of 4 years, based on

    metal prices of $15/lb Mo and $2.60/lb Cu. Metal recoveries were

    estimated at 88% for Mo and 84% for Cu; 

--  Low Operating Cost: operating cost of $US4.12/lb Mo, net of copper

    credits, 0.84:1 waste to ore strip ratio within an optimized pit

    containing an additional 7.6 million tonnes of Inferred Resources

    responsible for $20M of the NPV; 

--  Excellent infrastructure: Road accessible with a 230kV power grid within

    50 km; 

--  Apart from the PEA, recommendations have been made to test known

    mineralization below the current pit-limiting "Creston Fault" where

    results such as drill hole EC08-54 returned 241.4m at 0.083% Mo and

    0.059% Cu to a depth of 495m in the Red Hill Deep zone.

David Gunning, P.Eng., a director of the Company and Chief Operating Officer, is the Company’s qualified person under NI 43-101, and has reviewed and approved the scientific and technical disclosure on the El Creston Project disclosed in this news release.
 

Ajax, British Columbia:(3)
 

Ajax Molybdenum Property is comprised of 11,718 hectares and is located 13 km north of Alice Arm, British Columbia. The Ajax Property, one of North America’s largest undeveloped molybdenum deposits occupying a surface area of approximately 600 by 650 metres, is a world class primary molybdenum property in the advanced stage of exploration.
 

Molybrook, Newfoundland(4)
 

Creston’s Molybrook molybdenum property located on the south coast of Newfoundland is centred 2.5 km from the outport of Grey River less than 4 kilometres from a deep water, ice free navigable fjord. The property hosts a 3 km long trend in which at least three zones of at surface molybdenum mineralization occur: Molybrook, Wolf and Chimney Pond. To date, almost all exploration has been completed on the Molybrook Zone where a large porphyry molybdenum deposit has been outlined.
 

“We have taken the opportunity to acquire an undervalued project in Creston Moly, which comes with a Preliminary Economic Assessment on El Creston, along with two other high quality projects in Canada” said Robert Eadie, President & CEO of Starcore. “Despite the current state of moly and copper prices, we are looking at an asset that was acquired for $194 million over three years ago. We believe that the outlook for moly and copper will undoubtedly improve in the future, possibly making this a tremendous asset acquisition!”

About Starcore

Starcore is engaged in exploring, extracting and processing gold and silver through its wholly-owned subsidiary, Compania Minera Pena de Bernal, S.A. de C.V., which owns the San Martin mine in Queretaro, Mexico. The Company is a public reporting issuer on the Toronto Stock Exchange. The Company is also engaged in owning, acquiring, exploiting, exploring and evaluating mineral properties, and either joint venturing or developing these properties further. The Company has interests in properties located in Mexico, Canada and the United States.