NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION THROUGH U.S.
NEWSWIRE SERVICES
Raystar Capital Ltd. ("Raystar" or the "Company") (TSX VENTURE:RYA.H) is pleased
to announce that the Company has agreed to purchase a 100% interest in the Point
Leamington Zn-Au-Ag-Cu massive sulphide deposit (the "Project") located in
north-central Newfoundland, Canada from Calibre Mining Corp. ("Calibre") (TSX
VENTURE:CXB).
The purchase of the Project (the "Transaction") will form the basis for the
Company's reactivation from the NEX board of the TSX Venture Exchange (the
"Exchange") to Tier 2 on the Exchange. Completion of the Transaction is subject
to a number of conditions, including, without limitation, completion of the
Private Placement (as defined below) and receipt of all regulatory approvals,
including approval of the Exchange.
Transaction Terms
Raystar and Calibre have executed a Purchase and Sale Agreement dated June 20,
2013 which outlines the proposed terms by which Raystar will acquire the
Project. As consideration for the Project, Raystar has agreed to issue 1,000,000
common shares and pay $250,000 to Calibre on closing of the Transaction. Calibre
will also retain a 0.5% net smelter return royalty on production from the
Project, which can be purchased by Raystar at any time after closing for
$1,000,000.
Point Leamington Massive Sulphide Deposit, Newfoundland
The Project is comprised of a mining lease covering 263 hectares which contains
the Point Leamington Zn-Au-Ag-Cu massive sulphide deposit. The Point Leamington
deposit was discovered by Noranda in 1971 and is located 70 kms northwest of
Gander and 37 kms north of the town of Grand Falls in north-central
Newfoundland. The Project is situated in a low-lying swampy area and is
accessible via snowmobile in winter via an 8 km logging road connecting the
Project to Highway #1, or directly via helicopter from Gander. The Project is
well located with respect to access to tidewater.
Tetra Tech Inc. ("Tetra Tech") of Sudbury, Ontario, Canada has completed the
Point Leamington Inferred Resource Estimate at a cut-off grade of 4.0% ZnEq, of
14,100,000 tonnes grading 1.86 % Zn, 0.42% Cu, 0.02% Pb, 1.07 g/t Au and 17.12
g/t Ag (6.15% ZnEq) containing 577 million lb zinc, 130 million lb copper, 6.2
million lb lead, 484,000 oz Au and 7,755,000 oz Ag as outlined in the table
below:
Point Leamington Massive Sulphide Deposit, Newfoundland
2013 Inferred Mineral Resource Summary
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ZnEq % Tonnage Zn Cu Pb Au Ag ZnEq
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Cutoff t % % % g/t g/t %
----------------------------------------------------------------------------
4.0 14,100,000 1.86 0.42 0.02 1.07 17.12 6.15
----------------------------------------------------------------------------
1. CIM definition standards were followed for the resource estimate.
2. The 2013 resource models used Inverse Distance grade estimation within a
three-dimensional block model with mineralized zones defined by
wireframed solids.
3. A base cutoff grade of 4.0 % ZnEq was used for reporting resources.
4. Densities varied by rock type and ranged from 2.6 for the volcanics to
3.7 for the massive sulphides.
5. Numbers may not add exactly due to rounding.
6. Zinc Equivalent (ZnEq) calculated using $0.94/lb for Zinc, $1.00/lb for
Lead, $3.69/lb for Copper, $1380 /oz Au for gold and $22.73/oz Ag for
silver and metallurgical recoveries and net smelter returns are assumed
to be 100%.
7. Mineral Resources that are not mineral reserves do not have economic
viability.
8. The quantity and grade of reported inferred resources in this estimation
are uncertain in nature and there has been insufficient exploration to
define these inferred resources as an indicated or measured mineral
resource and it is uncertain if further exploration will result in
upgrading them to an indicated or measured mineral resource category.
The Resource Estimate was prepared by independent qualified person Todd
McCracken, P. Geo. of Tetra Tech. The mineral resource estimate is based on the
combination of geological modeling, geostatistics and conventional block
modeling using the Ordinary Krig methodology of grade interpolation. The mineral
resources were estimated using a block model with parent blocks of 10m X 10m X
10m. The geological model including mineralized intercepts was generated by
Tetra Tech.
The Tetra Tech Resource Estimate also evaluated the Point Leamington Deposit at
a range of cut off grades between 3.0 % and 8.0 % ZnEq. Results are as follows;
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ZnEq % Tonnage Zn Cu Pb Au Ag ZnEq
----------------------------------------------------------------------------
Cutoff T % % % g/t g/t %
----------------------------------------------------------------------------
3 19,367,000 1.63 0.37 0.02 0.95 15.42 5.42
----------------------------------------------------------------------------
4 14,093,000 1.86 0.42 0.02 1.07 17.12 6.15
----------------------------------------------------------------------------
5 9,669,000 2.11 0.46 0.02 1.22 18.55 6.91
----------------------------------------------------------------------------
6 6,184,000 2.36 0.50 0.02 1.41 19.76 7.72
----------------------------------------------------------------------------
7 3,460,000 2.69 0.52 0.02 1.68 21.32 8.70
----------------------------------------------------------------------------
8 2,038,000 3.02 0.51 0.02 1.95 23.09 9.58
----------------------------------------------------------------------------
Tetra Tech 's resource estimate for Point Leamington is based on drill core
assay results from a total of 77 holes totaling 24,152 metres of drilling
completed by Noranda (1971-1997), Rubicon Minerals Corporation (1999-2000) and
Calibre (then TLC Ventures - 2004). Statistical and geostatistical analysis was
completed on the total database to assess the characteristics and distribution
of zinc, gold, copper lead, and silver values across the deposit. Variograms
were generated for zinc, gold, copper and silver and search parameters
established for grade interpolation using kriging.
The Point Leamington mineralized zone is a volcanogenic massive sulphide system
consisting of a series of massive sulphide bodies and associated sulphide
stringer hanging wall zones. The model has also incorporated a set of post
mineral faults and porphyry dykes.
A two phase, $2.5 million success contingent work program has been recommended
by Tetra Tech. The first phase consists of 1,400 metres of additional diamond
drilling, metallurgical testing, and surveying at a cost of $400,000. The second
phase, contingent on the success of phase 1, consists of 12,000 metres of
additional drilling, metallurgical testing, additional technical studies, and
surveying at a cost of $2,100,000. A National Instrument 43-101 technical report
is being prepared and will be filed in the next 45 days.
The Point Leamington resource estimate data in this news release was read and
approved by Todd McCracken, P.Geo. of Tetra Tech, who is independent of Raystar
and a Qualified Person ("QP") as defined by Section 1.5 of National Instrument
43-101.
Private Placement
Concurrently with the Transaction, Raystar will undertake a non-brokered private
placement (the "Private Placement") of 23,333,334 units (the "Units") at a price
of $0.15 per Unit for gross proceeds of $3,500,000. Each Unit will consist of
one common share and one-half of a transferable share purchase warrant (the
"Warrants"). Each full Warrant is exercisable for a period of two years at a
price of $0.30. There is no finder's fee payable in connection with the Private
Placement.
All securities issued in the Private Placement will be subject to a statutory
hold period expiring four months and one day after closing of the Private
Placement. Completion of the Private Placement is subject to a number of
conditions, including, without limitation, receipt of all regulatory approvals,
including approval of the Exchange.
The Company intends to use the proceeds of the Private Placement to advance the
Point Leamington Project and for general working capital purposes.
Upon completion of the Transaction and the Private Placement, Raystar will have
50,190,374 common shares issued and outstanding and a working capital position
of approximately $4,000,000.
None of the securities sold in connection with the Private Placement will be
registered under the U.S. Securities Act of 1933, as amended, and may not be
offered or sold in the United States absent registration or an applicable
exemption from the registration requirements. This press release shall not
constitute an offer to sell or the solicitation of an offer to buy nor shall
there be any sale of the securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful.
New Management and Board of Directors
Also concurrently with the Transaction, Mr. Edward Farrauto will resign as
President, Chief Executive Officer and Chief Financial Officer and Mr. Danny Lee
and Mr. Crea Garrett will resign as directors of the Company.
Upon completion of the Transaction, Mr. Douglas Forster, M.Sc., P.Geo. will be
appointed President and Chief Executive Officer, Mr. Blayne Johnson will be
appointed Senior Vice President, Business Development, and Mr. Paulo Santos, CA
will be appointed Chief Financial Officer and Corporate Secretary of the
Company. The board of directors of the Company will be comprised of Mssrs.
Forster and Johnson as well as Lukas Lundin, Randall Oliphant, Douglas Hurst and
Edward Farrauto.
Raystar would like to thank Mssrs. Farrauto, Lee and Garrett for their
contributions to the Company.
Biographies of the new management team and board of directors of Raystar are as
follows:
Lukas Lundin, Director: Mr. Lundin graduated from the New Mexico Institute of
Mining and Technology (Engineering). Throughout his career he has been
responsible for various resource discoveries, including the multi-million ounce
Veladero gold deposit in Argentina that was subject to a $300 million takeover
by Homestake in 1999. Mr. Lundin has also led numerous companies through very
profitable business acquisitions and mergers including the $7.1 billion sale of
Red Back Mining Inc. in 2010. Mr. Lundin sits on the board of a number of
publicly traded companies and is currently Chairman of Lundin Mining
Corporation, a base metal producer, and Denison Mines Corp, a uranium
exploration and development company.
Randall Oliphant, Director: Mr. Oliphant has been involved as senior management
and/or founder of many successful, rapidly growing gold mining companies. From
1999 to 2003 he was President and Chief Executive Officer of Barrick Gold
Corporation, the largest gold producer in the world. In 2009, as Chairman of
Western Goldfields Inc., he oversaw the successful $315 million sale of the
company to New Gold Inc. Since 2009 Mr. Oliphant has been Executive Chairman of
New Gold Inc. where he has rapidly grown the company into a mid-tier gold
producer through the acquisition of producing mines as well as a pipeline of
high quality development stage gold projects. Mr. Oliphant is a Chartered
Accountant and is currently on the Advisory Board of Metalmark Capital LLC and
serves on the boards of WesternZagros Resources Ltd. and Franco-Nevada
Corporation.
Douglas Hurst, Director: Mr. Hurst has over 25 years' experience in the
mining/resource sector having acted as geologist, mining analyst and senior
executive since 1987. Mr. Hurst holds a Bachelor of Science in geology from
McMaster University (1986). During the 1990's Mr. Hurst was a mining analyst
with McDermid St. Lawrence and Sprott Securities and later as a contract analyst
with Pacific International and Octagon Capital. From 1995 to 2003, Mr. Hurst was
a mining consultant offering corporate, evaluation and financing services to the
mining sector. Mr. Hurst was a founding Executive/Director with International
Royalty Corporation which was sold to Royal Gold Inc. in 2010 in a transaction
valued at approximately $700 million. Doug currently serves as the Chairman of
Selkirk Power Company Ltd., a private hydro development company.
Blayne Johnson, Senior Vice President Business Development and Director: Mr.
Johnson has been involved in the investment community for the past 27 years. As
a Vice President of First Marathon Securities he played a key role in providing
institutional financing to junior resource companies. During his tenure at the
firm, First Marathon participated in over $5 billion of equity financings for
natural resource companies. His work at First Marathon involved equity and debt
financings as well as mergers and acquisitions. Since 1996 he has managed his
own investment and real estate portfolios and has been as active investor in the
mining sector. He is currently Chairman of Featherstone Capital Inc.
Douglas Forster, President, Chief Executive Officer and Director: Mr. Forster
has been associated with the mining industry for over 30 years as a geologist,
senior executive, director and company founder. He holds a B.Sc. (1981) in
geology and a M.Sc. (1984) in economic geology from the University of British
Columbia, Canada. Mr. Forster has extensive experience in resource project
development, mergers and acquisitions, equity finance and public company
management and has founded numerous companies listed on North American Stock
Exchanges. Mr. Forster was a founder of Terrane Metals Corp. that was acquired
by Thompson Creek Metals Co. Inc. in 2010 for $700 million and a director of
Potash One Inc. that was acquired by K+S Aktiengesellschaft in 2011 for $434
million. He is a registered member of the Association of Professional Engineers
and Geoscientists of British Columbia. Mr. Forster sits on the board of a number
of publicly traded companies and is currently President and CEO of Featherstone
Capital Inc. a private, natural resource investment company.
Edward Farrauto, Director: Mr. Farrauto is a Certified General Accountant and
has 20 years' experience as a senior financial officer in private and public
companies. His experience encompasses financial and regulatory compliance and
public company management. Mr. Farrauto has been directly responsible for
overseeing private placement financings, prospectus filings, reverse takeovers
and merger and acquisition transactions. He has extensive experience with U.S.
filings including SEC clearance and reporting issuers.
Mr. Paulo Santos, Chief Financial Officer, Corporate Secretary: Mr. Santos is a
Chartered Accountant with over 10 years' experience in accounting, auditing and
regulatory compliance. Mr. Santos has worked in public practice as an auditor,
focusing his area of interest in public companies in the junior resource and
technology sectors. He is currently CFO of Calibre Mining Corp. where he
previously held the position of corporate controller.
Name Change
On completion of the Transaction, Raystar proposes to change its name to
Newmarket Gold Inc.
Stock Options
Concurrent with the closing of the Transaction, the Company will grant up to
2,000,000 stock options to new directors, officers and employees of Raystar at
$0.20 per share, or such greater price as may be required by the Exchange, with
an expiry date of five years.
No stock options will be granted to Mssrs. Lundin, Oliphant, Johnson or Forster
at this time.
ON BEHALF OF THE BOARD
Edward Farrauto, President, Chief Executive Officer and Chief Financial Officer
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.
Completion of the Transaction is subject to a number of conditions including
Exchange acceptance. There can be no assurance that the Transaction will be
completed as proposed or at all. Investors are cautioned that any information
released or received with respect to the Transaction may not be accurate or
complete and should not be relied upon. Trading in the securities of Raystar
Capital Ltd. should be considered highly speculative.
The TSX Venture Exchange has in no way passed upon the merits of the proposed
Transaction and has neither approved nor disapproved the contents of this press
release.
Cautionary Note Regarding Mineral Resource Estimates
Investors should not assume that any of the inferred resource disclosed herein
will ever be upgraded to a higher category of mineral resource or to mineral
reserves and that any or all of the inferred mineral resource exist or is or
will be economically or legally feasible to mine.
The disclosure herein uses mineral resource classification terms that comply
with reporting standards in Canada and the disclosure of mineral resource
estimates are made in accordance with National Instrument 43-101 - Standards of
Disclosure for Mineral Projects. NI 43-101 is a rule developed by the Canadian
Securities Administrators that establishes standards for all public disclosure
an issuer makes of scientific and technical information concerning mineral
projects that are considered material to the issuer.
All resource estimates contained herein are based on the definitions adopted by
CIM and recognized under NI 43-101. These standards differ significantly from
the mineral reserve disclosure requirements of the U.S. Securities and Exchange
Commission set out in Industry Guide 7. Consequently, resource information
contained in this press release is not comparable to similar information that
would generally be disclosed by U.S. companies in accordance with the rules of
the SEC. The SEC's Industry Guide 7 does not recognize mineral resources and US.
companies are generally not permitted to disclose mineral resources in documents
they file with the SEC. Investors are specifically cautioned not to assume that
any part or all of the mineral resources disclosed above will ever be converted
into SEC defined mineral reserves. Further, "inferred mineral resources" have a
great amount of uncertainty as to their existence and as to whether they can be
mined legally or economically. In accordance with Canadian rules estimates of
inferred mineral resources generally cannot form the basis of an economic
analysis.
Forward-Looking Statements
Certain statements herein may contain forward-looking statements and
forward-looking information within the meaning of applicable securities laws.
Forward-looking statements or information appear in a number of places and can
be identified by the use of words such as "plans", "expects" or "does not
expect", "is expected", "budget", "scheduled", "estimates", "forecasts",
"intends", "anticipates" or "does not anticipate" or "believes" or variations of
such words and phrases or statements that certain actions, events or results
"may", "could", "would", "might" or "will" be taken, occur or be achieved.
Forward-looking statements and information include statements regarding the
Transaction, the Private Placement, the Resource Estimate, the timing of
exploration programs and filing of technical reports and the Company's
exploration plans and exploration results with respect to the Project. With
respect to forward looking statements and information contained herein, we have
made numerous assumptions, including assumptions about mineral prices, cut-off
grades, metallurgical recoveries, operating and other costs and technical
assumptions used in the estimate. Such forward-looking statements and
information are subject to risks, uncertainties and other factors which may
cause the Company's actual results, performance or achievements, or industry
results, to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statement or
information. Such risks include discrepancies between actual and estimated
mineral resources, subjectivity of estimating mineral resources and the reliance
on available data and assumptions and judgments used in the interpretation of
such data, speculative and uncertain nature of gold exploration, exploration
costs, capital requirements and the ability to obtain financing, volatility of
global and local economic climate, share price volatility, estimate gold price
volatility, changes in equity markets, increases in costs, exchange rate
fluctuations and other risks involved in the mineral exploration industry. There
can be no assurance that a forward-looking statement or information referenced
herein will prove to be accurate, as actual results and future events could
differ materially from those anticipated in such statements or information.
Also, many of the factors are beyond the control of the Company. Accordingly,
readers should not assume that any of the inferred resource will ever be
upgraded to a higher category or to mineral reserves and any or all exist or is
economically or legally feasible to mine or place undue reliance on
forward-looking statements or information. We undertake no obligation to reissue
or update any forward-looking statements or information except as required by
law. All forward-looking statements and information herein are qualified by this
cautionary statement.
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.
FOR FURTHER INFORMATION PLEASE CONTACT:
Raystar Capital Ltd.
Edward Farrauto, President,
Chief Executive Officer and Chief Financial Officer
604-687-3992
efarrauto@bayridgecapital.com
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