GlobeStar Closes US$45 Million Debt Facility For Cerro De Maimon
Project:
Gold And Silver Hedges Initiated
TORONTO,
Ontario -- August 9th, 2007 -- GlobeStar Mining Corporation (TSX: GMI) is
pleased to announce the closing of its US$45 million debt
financing facility with NEDBANK Capital of South Africa. The amount of the facility represents an
increase of US$7 million from the amount of this facility previously announced
in the Company's press release of May 9, 2006. The increase is intended to provide the
Company with additional flexibility to cover any unanticipated increases in
capital cost of the Cerro de Maim?n copper/gold
project in
the Dominican Republic.
GlobeStar
expects to use proceeds of this facility to partially fund the continued development of its 100% owned Cerro
de Maim?n project.
The
term of the facility will run through December 31, 2013 or 5 years after commissioning the Cerro de Maim?n plant, whichever is earlier. The facility carries an interest rate
based on LIBOR plus 300 basis points during operations and LIBOR plus 350 basis
points during the construction of the project. Mandatory prepayments are required at 25% of the project's excess available cash flow, as defined under
the facility. The facility requires
certain commodity hedging during the first three years of production and contains a number of customary terms and conditions applicable to a facility
like this one.
"Together
with the previous equity financings completed in the last 12 months, this debt
facility provides the Company access to over US$90 million to develop it's Cerro
de Maim?n project and continue its copper, nickel and gold exploration program."
commented Dave Massola, GlobeStar's Vice President of Finance and Chief
Financial Officer, "The funding available to the Company allows it to pursue its
growth strategy beyond the mine commissioning scheduled for summer
2008".
In
August 2006, the Company raised Cdn$30 million in equity and in May 2007 the
Company raised a further Cdn$31.8 million (see releases of June 21, 2006 and May
29, 2007).
Hedging
Program
As
required under the NEDBANK debt facility, the Company has
entered into hedging contracts for 90% of its gold and silver production from
the Cerro de Maim?n project during the initial three years of production, at an
average floor price of US$650 and US$11.50 per ounce, respectively. A small percentage of the project's
first year copper production was also recently hedged. The Company also purchased call options
in order to limit the mark to market risk of these contracts and also to enable
the Company to participate in future copper, gold and silver price increases
above specified levels. Auramet Trading LLC of Fort Lee, New
Jersey acted as advisors on both the hedging and debt transactions.
Technical
Update on Operations
At
the Cerro de Maim?n project mine site, work on both the sulphide and oxide
processing plant buildings is progressing well. Work has begun on ancillary buildings
and these are expected to be completed shortly. Haul roads construction and site
clearance of the open pit have also commenced. Micon International Limited have
been engaged to complete a National Instrument 43-101 ("NI 43-101") compliant
technical report which will describe an update of the Company's estimated
mineral reserves and resources, incorporating the results of the recent drilling
program (see press release of May 3, 2007), and providing updated
estimates on capital costs, operating costs and anticipated mine life. The
report is expected to be released by mid-August 2007.
Sococo
de Costa Rica has been selected as the mining contractor for the project. Sococo
is currently mobilizing their equipment and is planning to start the
pre-stripping of the ore body, anticipated to begin in August
2007.
The
Company's 207 hole nickel drilling program is progressing on schedule with the
67 infill drill holes at Cumpi? Hill completed. Some 11 of these holes have been
reported, and half core from the remaining 56 holes is at Lakefield Research in
Canada, who have been contracted to provide assays and preliminary metallurgical
testing. Snowden and Associates of Vancouver have been contracted to prepare an
independent NI 43-101 compliant estimated mineral resource calculation for
Cumpi? Hill, expected to be published in the of fall 2007. Drilling has begun on
the next target, Loma Mala.
For
the Company's copper exploration program, the data processing and target selection from the Company's Cdn$300,000 airborne Electro Magnetic program is
due to be completed at the end of August. The campaign for the 2007 7,500 metre
drilling program is expected to start later this month, at the Cuance, Bayaguana
and Loma Pesada drilling targets, followed sequentially by any targets generated
by the EM survey. This drilling program has been delayed due to mine drilling
for the Micon NI 43-101 technical report, and longer than anticipated delays in
both securing drill rigs and target selection. The budgeted program is currently
planned to be completed in the 4th quarter of
2007.
About
GlobeStar
GlobeStar
Mining Corp. is a well funded mine development Company, moving forward with its
Cerro de Maim?n copper/gold project, currently anticipated to be due for
commissioning and start-up in the summer of 2008. The Company is also
aggressively exploring an extensive base and precious metals exploration portfolio in the Dominican Republic with a US$4 million exploration budget,
including its 207-hole nickel drilling program and a 7,500 metre copper/gold
drilling program.
Contact:
GlobeStar
Mining Corporation
William
Fisher
or JP
Chauvin
CEO President
and COO
Email:
wfisher@globestarmining.com
Email:
jp.chauvin@globestarmining.com
Tel.:
(416) 868-6678 Tel.: (416) 868-6678
Bay
Street Connect
Coal Harbor
Communications
Gus
Garisto
Dale Paruk
Email:
gus@baystreetconnect.com
Email: dale@coal-harbor.com
Tel.: (416) 607 6023
Tel.:
(604) 662-4505
Fax: (604) 662-4547
Reader
Advisory
The
information in this news release may include certain information and statements
about management's view of future events, expectations, plans and prospects that
constitute forward-looking statements. Assumptions that are subject to
significant risks and uncertainties are the basis for these statements. Because
of these risks and uncertainties and, as a result of a variety of factors, the
actual results, expectations, achievements or performance may differ materially
from those anticipated and indicated by these forward looking statements.
Although GlobeStar believes that the expectations reflected in forward looking
statements are reasonable, we can give no assurances that the expectations of
any forward-looking statements will prove to be correct. GlobeStar disclaims any
intention, and assumes no obligation, to update or revise any forward-looking
statements to reflect actual results, whether as a result of new information,
future events, changes in assumptions, changes in factors affecting such