TORONTO, Oct. 17, 2013 /CNW/ - Search Minerals Inc. ("Search" or the "Company") (TSXV: SMY) is pleased to provide the following corporate and strategic
update.
To date, Search has been focused on two lines of business: mineral
exploration and development of rare earth element ("REE") projects in Newfoundland and Labrador; and research and development
of the Starved Acid Leach Technology ("SALT"). It is the strong belief of the management and Board of Search that,
considering both current market conditions and Search's own core
strengths, a strategic refocusing of the Company is required.
Search has realigned its corporate strategy to focus on critical
metals—which includes REE—with strong market fundamentals and with
increasing use in innovative technologies. The Company's new corporate
strategy centers on creating value through finding and developing metal
assets with strong growing demand and constrained or restricted
supply. As such, the Company is currently actively pursuing
opportunities and partnerships in critical metals, including, but not
limited to, tin, tungsten, dysprosium and neodymium, prioritizing
projects that can be partnered, funded and developed in a relatively
short period of time, in strategic, friendly jurisdictions.
Due to its strong market fundamentals, Search has selected tin to be its
first critical metal to focus upon. Tin prices have risen from US$4,000
per tonne in 2002 to US$22,000 per tonne in 2013, on the back of strong
new demand and supply constraints from existing mines, and a limited
pipeline of upcoming projects.
Search's first priority over the next several months is to add assets
that are in the development stage and at or near cash flow. On August
20, 2013, the Company announced that it had signed two non-binding
letters of intent ("LOIs"), with Mineração São Francisco de Assis Ltd. ("MSFA") and Carlos Mena Resources Ltd. ("CMR"), two privately held companies, each dedicated to the development and
operation of tin assets in Brazil. The LOIs outline the general terms
and conditions pursuant to which Search, MSFA and CMR would be willing
to complete one or more transactions resulting in a combination of
their respective business operations (the "Transactions") (see "Search Minerals Announces Non-Binding Letters of Intent for Business
Combinations with Two Tin Companies in Brazil"). Upon completion of one or more of these Transactions, Search expects
to move from pure exploration to development and production.
Negotiations amongst all parties regarding the aforementioned
Transactions are ongoing and final commercial terms will be disclosed
in due course.
In addition, Search continues to maintain and evaluate its REE
properties in the Port Hope Simpson REE District, which includes the
Fox Harbour volcanic belt and the Company's flagship property, the
Foxtrot Project.
STARVED ACID LEACHING TECHNOLOGY (SALT)
The Company is also pleased to announce that it has signed an LOI with
InCoR Holdings Plc.'s ("InCoR") wholly owned subsidiary InCoR Technologies Limited ("ICRT"), whereby ICRT plans to purchase the intellectual property rights to
the starved acid leaching technology ("SALT"), developed by Search's own Dr. David Dreisinger and Mr. James Clucas.
The LOI contemplates that ICRT would purchase SALT for a total purchase
price of C$2.2 million, comprised of the following:
-
C$50,000 at closing, expected not later than October 31, 2013;
-
C$50,000 upon delivery of a positive economic scoping study, anticipated
in early 2014;
-
C$100,000 upon completion of a positive bankable feasibility study; and
-
C$2,000,000 repayable from 25 percent of the net cash flow from a
commercial application of the technology.
Stephen Keith, President & Chief Executive Officer, added, "As Search
refocuses on other opportunities, we elected to transfer SALT to a
company dedicated to developing technology for the mineral extraction
industry, with plans to move ahead with the economic scoping study and
subsequent pilot plant test work. The sale of SALT to InCoR, if
completed, will allow Search to focus on its new strategic direction in
order to deliver value to shareholders. It will also allow InCoR to
further develop this innovative technology developed by Dr. Dreisinger
and Mr. Clucas which does not align with Search's new strategic
direction."
Completion of the transaction is subject to the receipt of all necessary
regulatory and other approvals, including the approval of the TSX
Venture Exchange.
INFORMATION REGARDING TRADE HALT
On August 20, 2013, Search issued voluntary disclosure in the form of a
news release (the "Release") regarding two non-binding LOIs with MSFA and CMR (see "Search Minerals Announces Non-Binding Letters of Intent for Business
Combinations with Two Tin Companies in Brazil").
Following the issuance of the Release, the Investment Industry
Regulatory Organization of Canada ("IIROC") determined to halt the stock until such time that the Company could
disclose proposed consideration and method of payment in relation to
the two proposed Transactions, as per TSX Venture Exchange Policy 5.3,
sections 5.3 and 5.6(d). Until there is certainty that either or both
Transactions will be consummated, the Company has not been able to
issue any public statement regarding valuation of MSFA or CMR. Both
Transactions are subject to legal, technical and financial due
diligence.
Search continues to communicate with the TSX Venture Exchange and to
work diligently with all parties involved in order to expedite
negotiations regarding the Transactions to allow for a lift of the
trade halt and return of liquidity for the Company's investors as soon
as is practicable.
About Search Minerals:
Search Minerals Inc. (TSXV: SMY) is a TSX Venture Exchange listed
company. Search is the discoverer of the Port Hope Simpson REE
District, a highly prospective light and heavy REE belt located in
southeast Labrador, where the Company controls a dominant land position
in a belt 135 km long and up to 12 km wide. In addition, Search holds
a number of additional mineral prospects in Newfoundland and Labrador
in its portfolio, including claims in the Strange Lake Complex (where
Quest Rare Minerals has a Joint Venture with Search); and at the Red
Wine Complex (where Great Western Minerals Group has a Joint Venture
with Search).
Furthermore, Search Minerals is the owner of patents relating to the
Starved Acid Leaching Technology ("SALT"), a process with the potential
to economically recover nickel and cobalt from known deposits currently
considered sub economic.
Search Minerals is led by a management team and Board of Directors with
proven track records in the mining industry, with geological and
metallurgical teams led by Dr. Randy Miller and Dr. David Dreisinger,
respectively.
All material information on the Company may be found on its website at
www.searchminerals.ca and on SEDAR at sedar.com.
About InCoR Holdings Plc.:
InCoR Holdings Plc. ("InCoR") is a venture capital and holding company
in the natural resource sector. InCoR acquires and develops projects
and distressed assets identified by management focusing primarily in
the mineral resource, energy and food/agriculture sectors. InCoR acts
as a worldwide project incubator with a "barbell" approach to
investment. By adopting this approach, InCoR targets projects that are
either near term cash flow positive or with world class blue sky
potential.
Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility of the adequacy or accuracy of this release.
Cautionary Statement:
This news release contains forward-looking statements that are not
historical facts. Forward-looking statements involve risks,
uncertainties, and other factors that could cause actual results,
performance, prospects, and opportunities to differ materially from
those expressed or implied by such forward-looking statements. Factors
that could cause actual results to differ materially from these
forward-looking statements include those risks set out in Search's
public documents filed on SEDAR at www.sedar.com. Although Search
believes that the assumptions and factors used in preparing the
forward-looking statements are reasonable, undue reliance should not be
placed on these statements, which only apply as of the date this news
release, and no assurance can be given that such events will occur in
the disclosed time frames or at all. Except where required by law,
Search disclaims any intention or obligation to update or revise any
forward-looking statement, whether as a result of new information,
future events, or otherwise.
SOURCE Search Minerals Inc.
