VANCOUVER, BRITISH COLUMBIA, Nov. 2, 2009 (Marketwire) -- Alberta Star Development Corp. (the "Company") (TSX VENTURE:ASX)(OTCBB:ASXSF)(FRANKFURT:QLD) is pleased to announce that it has entered into a binding term sheet (the "Agreement") with Sterling Mining Company ("Sterling") whereby the Company has entered into a binding agreement to acquire a controlling interest in Sterling and its assets and provide for financing of Sterling's ongoing operations.
STERLING MINING COMPANY
Sterling is currently a debtor-in-possession in Chapter 11 Bankruptcy in the District of Idaho, U.S.A. Sterling is engaged in the business of acquiring, exploring, developing and mining mineral properties primarily those containing silver and associated base and precious metals. Sterling operates the Sunshine Silver Mine in Idaho and has exploration projects in Idaho, U.S.A. Sterling was incorporated under the laws of the State of Idaho on February 3, 1903 and its common shares are currently listed on the OTCBB: SRLMQ and Frankfurt Stock Exchange: SMX.
THE SUNSHINE SILVER MINE
The Sunshine Mine located near Coeur d'Alene, Idaho, U.S.A. has been one of the world's largest producers of silver, having recorded production of over 360,000,000 ounces of silver since 1904. A 2007 Canadian "National Instrument 43-101 - Standards of Disclosure for Mineral Projects" report by Behre Dolbear & Company estimated remaining resources as follows: 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. The Behre Dolbear & Co. National Instrument 43-101 report is considered historic in nature and is used to illustrate the ongoing resource potential of the Sunshine Mine. The Report can be found on file under Sterling's profile with the U.S. Securities and Exchange Commission and available in Canada at www.sedar.com.
TERMS OF ACQUISITION OF STERLING
As previously announced by the Company (see Press Release dated June 10, 2009), the Company filed a "Notice of Appearance and Request for Special Notice" with the United States Bankruptcy Court for the District of Idaho, U.S.A. (the "Court") regarding Sterling. Since the filing of the Notice, the Company has monitored the bankruptcy proceedings of Sterling and pursued various financing options with Sterling, which has resulted in the Agreement which would allow the Corporation to gain control of Sterling and its assets. The Agreement contains a number of conditions precedent to the obligations of the parties. Unless all of such conditions are satisfied or waived by the party for whose benefit such conditions exist, to the extent that they may be capable of waiver, the proposed transaction will not proceed. There is no assurance that the conditions will be satisfied or waived on a timely basis, or at all. Such conditions include: an order ("Order") of the Court approving the Plan of reorganization of Sterling; all claims of all the creditors of Sterling are paid, satisfied, settled or compromised under the Plan of reorganization and that all other consents and approvals, including regulatory approvals, are obtained. The proposed transaction has not been approved by the TSX Venture Exchange (the "Exchange") and remains subject to Exchange approval.
There can be no assurance that the proposed transaction will be completed as proposed or at all. The proposed transaction is an "arms length transaction" as defined in Exchange Policy 1.1.
The Agreement provides that Sterling must make an application for reorganization to the Court on or before December 15, 2009 and receive an Order confirming the Plan on or before February 28, 2010, staying all claims and actions against Sterling and its assets and whereby the Company will acquire not less than 90% of the issued and outstanding common shares of Sterling, on a fully diluted basis, in exchange for $10.5 million USD.
