VANCOUVER, BRITISH COLUMBIA (TSX: MSV) and Sterling Mining
Company ("Sterling") (TSX: SMQ)(OTCBB: SMRL)(FRANKFURT: SMX) are
pleased to announce that they have signed a letter of agreement
whereby Minco Silver will acquire 100% of the issued and
outstanding shares of Sterling (the "Transaction"). The transaction
will result in Minco Silver controlling two world class silver
deposits including the Fuwan Silver property in China and the
Sunshine Mine in Idaho, USA.
Transaction
Under the terms of the Transaction, Minco Silver has offered
0.51 of a share for each one Sterling share which equates to an
offer of US$1.58 per Sterling share based on Minco Silver's July
21, 2008 closing price. The offer values Sterling at US$62.3
million.
Upon completion of the Transaction, the combined company will
have approximately 52 million common shares issued and outstanding,
plus options and warrants. Minco Silver shareholders will own 61%
and former Sterling shareholders will own 39% of the combined
company.
Minco Silver has extended a US$15 million line of credit to
Sterling, of which US$5 million is to be funded immediately,
bearing 10% annual interest compounded monthly, to be used for
continued operations at the Sunshine Mine.
A management committee has been established to supervise the
day-to-day operations of Sterling during the transaction period. It
is comprised of seven members, four from Minco Silver and three
from Sterling.
The Transaction is subject to completion of confirmatory due
diligence, definitive documentation, regulatory approvals, and
obtaining shareholder approval at a special meeting of the
shareholders of Sterling. The letter agreement includes a
commitment by Sterling to not solicit alternative transactions to
the Transaction. A break fee of US$2 million is payable to Minco
Silver under certain conditions. The Transaction is expected to
close by December, 2008.
Subject to regulatory approval, Minco Silver will pay at closing
a finders' fee of 50,000 common shares to an arms-length third
party related to the Transaction.
Compelling Combination
The combination will bring significant benefits to each of the
companies and their shareholders. The Boards of Directors of each
company have supported the proposed combination and management of
the two companies believe that the Transaction will provide the
shareholders of each company an opportunity to participate in the
future growth of a larger and more established company with a
broader range of prospects, a more diversified asset base, and a
management team that has a proven ability to execute.
Upon completion of the Transaction, the combined company will
have:
- Two world-class silver deposits containing 418 million ounces
of silver resources;
- Potential annual silver production in excess of 10 million
ounces by 2011;
- Solid platform for profitable growth and increased shareholder
value; and
- Reduced risk profile.
Minco Silver's Chairman and CEO, Dr. Ken Cai, commented: "The
combination of these companies will bring together two world-class
silver deposits with significant exploration upside. The integrated
board and management team is well positioned to build one of the
world's leading primary silver producing companies through
synergies in China and North America. Further, this consolidation
should appeal to a broader investor audience and greater market
liquidity."
Sterling's Interim President, Ken Berscht, added: "This merger
represent the culmination of the strategic review process announced
on June 4 and completed with the assistance and advice of our
financial advisor TD Securities Inc. It provides the financial
resources to fund the immediate requirements of Sterling and
ensures that the Sunshine Mine will be a significant contributor
going forward. We are excited about the premium offer and the
opportunity for Sterling shareholders to participate in the new
silver focused entity."
Minco Silver Conference Call
Minco Silver will host a conference call on Wednesday, July 23,
at 9:00 AM Eastern or 6:00 AM Pacific Time. To participate, please
dial 1-888-300-0053 for North American callers and 1-647-427-3420
for international callers. The ID# for the conference call is
57248259.
To view the new corporate presentation concerning this
Transaction, please visit Minco Silver's website:
www.mincosilver.ca.
About Minco Silver
Minco Silver Corporation (TSX: MSV) is a TSX listed company
focusing on the acquisition and development of silver dominant
projects. Minco Silver owns 100% interest in the World Class Fuwan
Silver Deposit, situated along the northeast margin of the highly
prospective Fuwan Silver Belt. Minco Silver is the exclusive
vehicle for pursuing silver opportunities in China pursuant to a
strategic alliance agreement between Minco Gold Corporation (TSX:
MMM)(AMEX: MGH)(FRANKFURT: MI5) and Silver Standard Resources (TSX:
SSO).
About Sterling Mining Company
Sterling Mining controls the Sunshine Mine, which began initial
production in December 2007, and related exploration lands in the
prolific Silver Valley of northern Idaho. Sterling Mining also
holds several silver properties in Mexico, including the Barones
Tailings Project in the Zacatecas Silver District. Shares of
Sterling Mining Company trade on the TSX under the symbol "SMQ", on
the OTCBB under the symbol "SRLM", and also on the Frankfurt Stock
Exchange under the trading symbol "SMX".
ON BEHALF OF THE BOARD
Dr. Ken Z. Cai, Chairman & CEO
Minco Silver Corporation
ON BEHALF OF THE BOARD
Ken Berscht, Interim President
Sterling Mining Company
Certain terms or statements made that are not historical facts,
such as anticipated advancement of mineral properties or programs,
productions, sales of assets, exploration plans or results, costs,
prices, performance are "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995,
and involve a number of risks and uncertainties that could cause
actual results to differ materially from those projected,
anticipated, expected or implied. These risks and uncertainties
include, but are not limited to; metals price volatility,
volatility of metals production, project development risks and
ability to raise financing. The Company undertakes no obligation
and has no intention of updating forward-looking statements.
This press release may contain "forward-looking statements",
which are subject to various risks and uncertainties that could
cause actual results and future events to differ materially from
those expressed or implied by such statements. Investors are
cautioned that such statements are not guarantees of future
performance and results. Risks and uncertainties about the
Company's business are more fully discussed in the Company's
disclosure documents filed from time to time with the Canadian
securities authorities.
This press release does not constitute an offer to sell or a
solicitation to buy securities, and contains forward-looking
statements regarding the Company within the meaning of Section 27A
of the Securities Act and Section 21E of the Exchange Act. These
statements are based on assumptions that the Company believes are
reasonable but that are subject to uncertainties and business
risks. Actual results relating to any and all of these subjects may
differ materially from expected results. Factors that could cause
results to differ materially include economic and political events,
the ability to raise capital in the financial markets, and other
factors discussed in the Company's periodic filings with the
Securities and Exchange Commission, including its annual report on
Form 10-K for the year ended December 31, 2007 and subsequent 10-Q
and 8-K filings.
The Toronto Stock Exchange does not accept responsibility for
the accuracy of this news release.
Contacts: Minco Silver Corporation Ute Koessler Director
Investor Relations 1-888-288-8288 or (604) 688-8002 Email:
ir@mincomining.ca Website: www.mincosilver.ca Sterling Mining
Company Monique Hayes Investor Relations (208) 699-6097 Website:
www.SterlingMining.com
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