SMRS Subsidiary Issues Promissory Note to New York Public Benefit Trust
Before the opening bell, Star Mountain Resources, Inc. (OTC: SMRS) announced that its wholly-owned subsidiary, St. Lawrence Zinc Company, LLC, has issued a promissory note in the aggregate principal amount of $500,000 to the Development Authority of the North Country, a New York public benefit trust. Per the terms of the note, payments of accrued interest associated with the loan commenced on April 1, 2016, with full repayment of the principal amount, in addition to all accrued and unpaid interest, due on or before April 1, 2017. The loan has been guaranteed by both Star Mountain and wholly-owned subsidiaries Northern Zinc, LLC and Balmat Holding Corp.
“We are appreciative to the Development Authority of the North Country for this financing,” Joe Marchal, chief executive officer of Star Mountain, stated in this morning’s news release. “We consider this one of many partnerships in our plan to re-commence operations at the Balmat Mine.”
Since closing on its acquisition of the Balmat zinc mine last November, the company has remained focused on recommencing mining operations at the complex. In recent months, this focus has intensified as global mine depletion and severe production cutbacks have led to a strong rebound for zinc prices. Year to date, zinc has climbed more than 23 percent since bottoming in early January (http://dtn.fm/8E7hd
), prompting analysts with Goldman Sachs to state that zinc currently has “the strongest bull case” of the metals market (http://dtn.fm/5Bg0O
“The recent rebound in zinc prices along with a strengthening world-wide economy validates our decision in November 2015 to acquire the Balmat zinc mine at a deeply discounted price and its 585,000 tons of proven and probable reserves of 9.2% grade zinc plus the mineralized material adjacent to the current reserves that in all likelihood will be reclassified to reserve status as the mine progresses,” continued Marchal. “These factors are enabling us to continue to prepare the mine for operations and start putting it back into production while we seek funding.”
Last month, Star Mountain gave prospective shareholders a preview of the potential upside offered by the Balmat zinc mine when it announced the reception of an Industry Guide 7 (IG7) Mineral Reserve Report for the asset. In addition to reaffirming the company’s initial reserve estimate for the property, the IG7 Report outlined the potential for the company to generate roughly $80.8 million in revenue over its initial 2.5-year mine plan. The report also confirmed that the long production history of the Balmat mining operation could be sustained well into the future, beyond this initial mining period.
With the recent rise of zinc prices and confirmation of the viability of the Balmat zinc mine through an IG7 Report, Star Mountain is strategically positioned to promote strong growth moving forward. Look for the company to leverage the expertise of its management team and its newly-strengthened cash position in order to expedite the recommencement of mining operations at the Balmat mine in the coming months.
For more information, visit www.starmountainresources.com