SMRS Approaching Mineral Production following Completion of Balmat Zinc Mine Acquisition
In October, Star Mountain Resources announced that it had entered into three-way definitive agreements with Northern Zinc, LLC and HudBay Minerals, Inc. (NYSE: HBM) to acquire Balmat Holding Corporation – including St. Lawrence Zinc Company, LLC and its mining operations in the Balmat mining district of St. Lawrence County, New York. This morning, SMRS provided an update on this transaction, announcing that it had met all of the closing conditions in the purchase agreements, and, as a result, the acquisition has now closed.
“We are delighted to have closed this transaction with Northern Zinc and HudBay and thank the teams at both companies for their help in making this transaction happen,” Joe Marchal, chief executive officer of SMRS, stated in a news release. “The team we have assembled has world class financial and mining experience that we believe will enable the company to grow into a successful global base and precious metals mining group.”
In total, the Balmat mining complex encompasses a permitted and equipped zinc mine, a floatation mill, an office structure and necessary infrastructure related to the operation of the mine. Additionally, SMRS will acquire just under 2,700 acres of fee simple real estate and more than 50,000 acres of mineral rights as part of the transaction.
Although operations at the Balmat mine were suspended in 2008 as a result of low commodity prices, there are no legal or regulatory hurdles preventing the immediate commencement of mining operations following SMRS’s acquisition. The complex’s care and maintenance team has kept mining permits current, MSHA inspections up-to-date and environmental controls and conditions in regulatory compliance throughout the seven-year period.
With the Balmat acquisition now complete, SMRS is in a strong position to move forward with its ongoing transformation from a junior mining company to a producer. The company will also look to benefit from a potentially long-term relationship with Northern Zinc, which employs a full roster of mining industry professionals with decades of valuable technical and managerial experience.
SMRS has previously announced intentions to build on the momentum provided by this acquisition in order to improve its cash flows and initiate efforts to uplist to a national stock exchange. For prospective shareholders, this upside makes SMRS an intriguing investment opportunity.
“Based on data provided to us during our due diligence on this… acquisition, we believe that the [Balmat] base metal mine opportunity presents to us the possibility of outstanding cash flows in the near term,” continued Marchal. “We intend to upgrade and modernize certain infrastructure systems, develop additional access to existing mining areas and restart production at this mine within six to nine months.”
For more information, visit www.starmountainresources.com