Idaho silver deal applauded by forum posters
Alberta Star (TSX: V.ASX, Stock Forum) announced on Monday that it had entered into a binding agreement to acquire a controlling interest in Sterling Mining, the owner of the Sunshine silver Mine near Coeur d’Alene, Idaho.
Sterling Mining filed for chapter 11 bankruptcy protection last June.
Alberta Star will acquire not less than 90% of the issued and outstanding common shares of Sterling for $10.5 million US dollars, and has also agreed to make up to $1.25 million (or $250,000 USD per month) in interim debtor-in-possession financing available to Sterling.
The market liked the deal, and Alberta Star shares rose 3 cents to 17.5 cents. Alberta Star is a mineral exploration company that focuses on identifying and acquiring advanced stage mining and exploration projects.
For the most part, posters to the company’s Bullboard were also heavily in favour of the transaction.
Slingshot17 wrote: “On the surface it appears to be a reasonable deal. However, there is still a lot more startup costs to get the mine producing, which will probably entail another round of share dilution for financing. I am cautiously optimistic, but would like to see more information on projected cost per ton, as well as the projected costs to get the mine running.
“It will be interesting to see how the market views the deal. If we start to steadily move north of $.15 then I guess the market will indicate approval. If it doesn't do much, then I guess the market feels we are trading cash for a big hole in the ground.”
“If successful,” opined Pretender47. “This is what can only be called a paradigm shift in ASX's buisiness [sic] profile.
“Instead of raising money through increasing share dilution [sic], they will have an Income from the mine with which to finance further exploration projects.
“At the risk of sounding like a pumper, if the bid is accepted, they could in time start buying back some of those outstanding shares to further increase thier [sic] value.”
A historic 43-101 compliant mineral estimate compiled by Behre Dolbear & Company said there was measured and indicated resources of 31.51 million ounces of silver in 1.43 million tons at 21.8 ounces of silver per ton; inferred resources of 231.5 million ounces of silver in 2.28 million tons at 101.6 ounces of silver per ton.
Goldmember1 wrote about Sterling Mining’s efforts to refurbish the Sunshine Mine since 2004, as posters tried to understand how much work and capital would be involved in bringing the mine back online.
Other posters felt that owning a producing mine would help fund development of other projects. “This is great! Infrastructure in place at a property that has produced a lot of silver in the past and has a lot of silver to go, to say the least. This is a BIG deal......... Then when they have cash flow they could use it to drill the Uranium projects in the north. This stock will have a big run once the news gets around and the possibilities become apparent,” according to SigmaLamaque.
