MSV Acquiring Stirling MiningMinco Silver and Sterling Mining Announce Proposed Business Combination
21:07 EDT Tuesday, July 22, 2008
VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 22, 2008) - MincoSilver Corporation ("Minco Silver") (TSX:MSV) and Sterling MiningCompany ("Sterling") (TSX:SMQ)(OTCBB:SMRL)(FRANKFURT:SMX) are pleasedto announce that they have signed a letter of agreement whereby MincoSilver will acquire 100% of the issued and outstanding shares ofSterling (the "Transaction"). The transaction will result in MincoSilver controlling two world class silver deposits including the FuwanSilver property in China and the Sunshine Mine in Idaho, USA.
Transaction
Under the terms of the Transaction, Minco Silver has offered 0.51 ofa share for each one Sterling share which equates to an offer ofUS$1.58 per Sterling share based on Minco Silver's July 21, 2008closing price. The offer values Sterling at US$62.3 million.
Upon completion of the Transaction, the combined company will haveapproximately 52 million common shares issued and outstanding, plusoptions and warrants. Minco Silver shareholders will own 61% and formerSterling shareholders will own 39% of the combined company.
Minco Silver has extended a US$15 million line of credit toSterling, of which US$5 million is to be funded immediately, bearing10% annual interest compounded monthly, to be used for continuedoperations at the Sunshine Mine.
A management committee has been established to supervise theday-to-day operations of Sterling during the transaction period. It iscomprised of seven members, four from Minco Silver and three fromSterling.
The Transaction is subject to completion of confirmatory duediligence, definitive documentation, regulatory approvals, andobtaining shareholder approval at a special meeting of the shareholdersof Sterling. The letter agreement includes a commitment by Sterling tonot solicit alternative transactions to the Transaction. A break fee ofUS$2 million is payable to Minco Silver under certain conditions. TheTransaction is expected to close by December, 2008.
Subject to regulatory approval, Minco Silver will pay at closing afinders' fee of 50,000 common shares to an arms-length third partyrelated to the Transaction.
Compelling Combination
The combination will bring significant benefits to each of thecompanies and their shareholders. The Boards of Directors of eachcompany have supported the proposed combination and management of thetwo companies believe that the Transaction will provide theshareholders of each company an opportunity to participate in thefuture growth of a larger and more established company with a broaderrange of prospects, a more diversified asset base, and a managementteam 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: "Thecombination of these companies will bring together two world-classsilver deposits with significant exploration upside. The integratedboard and management team is well positioned to build one of theworld's leading primary silver producing companies through synergies inChina and North America. Further, this consolidation should appeal to abroader investor audience and greater market liquidity."
Sterling's Interim President, Ken Berscht, added: "This mergerrepresent the culmination of the strategic review process announced onJune 4 and completed with the assistance and advice of our financialadvisor TD Securities Inc. It provides the financial resources to fundthe immediate requirements of Sterling and ensures that the SunshineMine will be a significant contributor going forward. We are excitedabout the premium offer and the opportunity for Sterling shareholdersto participate in the new silver focused entity."
Minco Silver Conference Call
Minco Silver will host a conference call on Wednesday, July 23, at9:00 AM Eastern or 6:00 AM Pacific Time. To participate, please dial1-888-300-0053 for North American callers and 1-647-427-3420 forinternational 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 focusingon the acquisition and development of silver dominant projects. MincoSilver owns 100% interest in the World Class Fuwan Silver Deposit,situated along the northeast margin of the highly prospective FuwanSilver Belt. Minco Silver is the exclusive vehicle for pursuing silveropportunities in China pursuant to a strategic alliance agreementbetween Minco Gold Corporation (TSX:MMM)(AMEX:MGH)(FRANKFURT:MI5) andSilver Standard Resources (TSX:SSO).
About Sterling Mining Company
Sterling Mining controls the Sunshine Mine, which began initialproduction in December 2007, and related exploration lands in theprolific Silver Valley of northern Idaho. Sterling Mining also holdsseveral silver properties in Mexico, including the Barones TailingsProject in the Zacatecas Silver District. Shares of Sterling MiningCompany trade on the TSX under the symbol "SMQ", on the OTCBB under thesymbol "SRLM", and also on the Frankfurt Stock Exchange under thetrading 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, suchas anticipated advancement of mineral properties or programs,productions, sales of assets, exploration plans or results, costs,prices, performance are "forward-looking statements" within the meaningof the Private Securities Litigation Reform Act of 1995, and involve anumber of risks and uncertainties that could cause actual results todiffer materially from those projected, anticipated, expected orimplied. These risks and uncertainties include, but are not limited to;metals price volatility, volatility of metals production, projectdevelopment risks and ability to raise financing. The Companyundertakes no obligation and has no intention of updatingforward-looking statements.
This press release may contain "forward-looking statements", whichare subject to various risks and uncertainties that could cause actualresults and future events to differ materially from those expressed orimplied by such statements. Investors are cautioned that suchstatements are not guarantees of future performance and results. Risksand uncertainties about the Company's business are more fully discussedin the Company's disclosure documents filed from time to time with theCanadian securities authorities.
This press release does not constitute an offer to sell or asolicitation to buy securities, and contains forward-looking statementsregarding the Company within the meaning of Section 27A of theSecurities Act and Section 21E of the Exchange Act. These statementsare based on assumptions that the Company believes are reasonable butthat are subject to uncertainties and business risks. Actual resultsrelating to any and all of these subjects may differ materially fromexpected results. Factors that could cause results to differ materiallyinclude economic and political events, the ability to raise capital inthe financial markets, and other factors discussed in the Company'speriodic filings with the Securities and Exchange Commission, includingits annual report on Form 10-K for the year ended December 31, 2007 andsubsequent 10-Q and 8-K filings.
FOR FURTHER INFORMATION PLEASE CONTACT:
Minco Silver Corporation
Ute Koessler
Director Investor Relations
1-888-288-8288 or (604) 688-8002
Email: ir@mincomining.ca
Website: www.mincosilver.ca
or
Sterling Mining Company
Monique Hayes
Investor Relations
(208) 699-6097
Website: www.SterlingMining.com
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