TORONTO, May 1, 2014 /CNW/ - Search Minerals Inc. ("Search" or the "Company") (TSXV: SMY) is pleased to provide a corporate update on the Company's
activities during the first quarter of 2014 and on the proposed
acquisition by the Company of Mineração São Francisco de Assis Ltda. ("MSFA").
Search's activities over the past several months have focused on the
following critical activities:
The proposed acquisition (the "Acquisition") of MSFA, to allow Search to become a producing mining company with
cash flow in 2014;
Metallurgical testwork on the Foxtrot Rare Earth Element ("REE") project; and
Seeking alternatives for financing of the MSFA Acquisition and the
Company as a whole.
Stephen Keith, President and CEO of Search, commented on progress made
in the last quarter: "Although this process has taken longer than
anticipated, Search remains optimistic about the MSFA Acquisition and
the new strategic direction the Company is taking. As a shareholder, I
recognize the inconvenience of the halt, but, that being said, Search
operates in the public markets, and the time required to properly
complete this sort of Acquisition and to fund a Company of our size is
not entirely within our control.
"We are pleased to be able to announce that the Information Circular for
the shareholder vote is nearing completion and that the MSFA
Acquisition remains on track. We have been actively marketing a
financing in order to allow the Company to grow. In the meantime, and
in addition to the MSFA Acquisition, Search has now developed a
pipeline of projects and assets that we are reviewing in order to
become a significant tin developer and producer, with over ten assets
being currently considered.
"Finally, we are pleased with the progress made in the past few months
with the metallurgical work on the Foxtrot REE minerals. Results are
encouraging, and we anticipate being able to publish updates on these
tests in the near future. We strongly believe that, when the Company
starts trading once again, Search will be much stronger and poised for
As the Acquisition may result in a reverse take-over of Search by
Brasilis Kaduna Consultoria e Participações Ltda. and MS Marpin
Consultoria e Participações Ltda., the current owners of MSFA
(together, the "Vendors"), trading of Search shares remain halted in accordance with TSX
Venture Exchange Policy 5.2. The halt will remain in place until the
TSX Venture Exchange (the "TSXV") is able to complete a review of certain documentation relating to the
proposed Acquisition (see "Search Minerals Announces Reverse Takeover Acquisition of Mineração São
Francisco de Assis Ltda.," January 27, 2014). Search and the Vendors are working diligently to
provide the required documentation and complete the steps necessary to
permit a resumption of trading. Although Search's management
acknowledges the inconvenience to shareholders of the Company,
management strongly believes that the Acquisition, if completed, will
deliver great value to Search shareholders.
A special meeting of the holders of Search Shares (the "Shareholder Meeting") is expected to be called in the coming weeks to approve, among other
matters, the Acquisition. Additional information concerning the
Shareholder Meeting will be included in the management information
circular (the "Information Circular") to be delivered to holders of Search Shares setting forth the
business to be conducted at the Shareholder Meeting. The Information
Circular will include information including, but not limited to,
audited financial statements of MSFA for the last three years; the
terms of the definitive agreement providing the terms and conditions of
the Acquisition; and the terms of the concurrent financing to be
conducted in connection with the Acquisition.
It is a condition to the completion of the Acquisition that a financing
be completed to raise aggregate gross proceeds of at least C$10,000,000
(the "Financing"). Terms of the Financing are currently being negotiated by Search and
potential investors. The Company has been actively marketing the
Financing in North America, Brazil and Europe. Lead orders are in
place, and the Company expects that the terms of the financing will be
announced soon with the Financing to be completed concurrently with the
closing of the Acquisition.
The net proceeds from the Financing will be used to fund an exploration
program and plant expansion at the Mocambo Mine, as well as for
maintenance of the Company's REE projects and for general working
REE METALLURGICAL TESTING UPDATE
In early 2014, the Company commenced work on its project, the Development of Innovative Technologies for the Recovery and Refining of
Rare Earth Elements ("REE") from Ore Mined in Labrador (the "Project"). As previously announced (see "Search Minerals Announces C$225,000 in R&D Funding for Metallurgical
Testing in Labrador," January 21, 2014), Search is receiving research and development
investments C$112,500 towards the project from each of the Research &
Development Corporation ("RDC") and from the Atlantic Canada Opportunities Agency ("ACOA"), and the Company is contributing an additional C$75,000 in working
The objective of the Project is to evaluate the effectiveness and
compare the commercial feasibility of a variety of innovative
metallurgical processes to separate and refine rare earth elements ("REE") from minerals with the specific characteristics of that identified at
the Company's Foxtrot Project ("Foxtrot") in the Port Hope Simpson Rare Earth Element District in SE Labrador.
Search intends to maximize refining and processing in Labrador with
minimal environmental impact.
SGS Canada Inc. ("SGS") has been engaged to perform testing on mineral samples containing REE
taken from the Company's Foxtrot Project located near Port Hope
Simpson, Labrador. SGS is examining innovative methods to isolate REE
from the specific matrix of minerals. The current separation process
involves crushing and grinding of minerals, followed by gravity
separation, flotation and magnetic separation to produce a concentrate
containing the REE materials. The concentrate is then subjected to acid
baking at 200 degrees Celsius, water leaching, purification of the
leachate, and precipitation of REE oxalate. The process options under
investigation with SGS Canada will be designed to reduce complexity and
cost of REE recovery from Foxtrot mineralization.
Work on the Project has been progressing well, with favourable results.
The Company anticipates being able to publicly release preliminary
results in the coming weeks.
REE EXPLORATION UPDATE
Pending successful completion of the Financing, Search is planning an
exploration program for the 2014 field season to further map and sample
Foxtrot-like mineralization throughout the Fox Harbour volcanic belt
(see "Search Minerals Announces Ten New Foxtrot-like REE Prospects in 64
km-long Mineralized Belt in SE Labrador", October, 30, 2013) and to prioritize targets for a small exploration
drilling program. The aim of this program is to discover/document
additional Foxtrot-like deposits in close proximity to the Foxtrot
Deposit, and to add to the Foxtrot resource (currently 9.3 million
tonnes Indicated at 189 ppm Dy, and 5.2 million tonnes Inferred at 176
ppm Dy (see "Search Minerals Phase III Drilling Increases Foxtrot REE Project
Resource Estimate by 55% of Similar Grade," November 1, 2012).
Completion of the Acquisition is subject to a number of conditions,
including TSXV acceptance and shareholder approval. The Acquisition
cannot close until the required shareholder approval is obtained. There
can be no assurance that the Acquisition will be completed as proposed
or at all.
Investors are cautioned that, except as disclosed in the Information
Circular to be prepared in connection with the Shareholder Meeting, any
information released or received with respect to the Acquisition may
not be accurate or complete and should not be relied upon. Trading in
the securities of Search should be considered highly speculative.
The TSX Venture Exchange has in no way passed upon the merits of the
proposed Acquisition and has neither approved nor disapproved the
contents of this press release.
About Search Minerals:
Search Minerals Inc. (TSXV: SMY) is a TSX Venture Exchange listed
company focused on creating value through finding and developing
mineral assets with growing demand and constrained or restricted
supply, and with increasing use in innovative technologies. The Company
is actively pursuing opportunities and partnerships in critical metals,
including, but not limited to, tin, tungsten, dysprosium and neodymium,
prioritizing projects that can be partnered, funded and developed in a
relatively short period of time, in strategic, friendly jurisdictions.
Search is the discoverer of the Port Hope Simpson REE District, a highly
prospective light and heavy REE belt located in southeast Labrador,
where the Company controls a dominant land position in a belt 70 km
long and up to 8 km wide. In addition, Search holds a number of
additional mineral prospects in Newfoundland and Labrador in its
portfolio, including claims in the Strange Lake Complex (where Quest
Rare Minerals has a Joint Venture with Search); and at the Red Wine
Complex (where Great Western Minerals Group has a Joint Venture with
All material information on the Company may be found on its website at www.searchminerals.ca and on SEDAR at sedar.com.
Dr. Randy Miller, Ph.D., P.Geo, is the Company's Vice President,
Exploration, and is the Qualified Person (as defined by National
Instrument 43-101) who has supervised the preparation of and approved
the technical information reported herein.
Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility of the adequacy or accuracy of this release.
Cautionary Statement Regarding Forward-Looking Information:
This news release includes certain "forward-looking statements" under
applicable Canadian securities legislation that are not historical
facts. Forward-looking statements involve risks, uncertainties, and
other factors that could cause actual results, performance, prospects,
and opportunities to differ materially from those expressed or implied
by such forward-looking statements. Forward-looking statements in this
news release include, but are not limited to, statements with respect
to the terms and conditions of the proposed Acquisition; the Company's
objectives, goals or future plans; the receipt of the requisite
approvals with respect to the Acquisition; the completion of the
Financing; and the business and operations of the Company following the
completion of the Acquisition. Forward-looking statements are
necessarily based on a number of estimates and assumptions that, while
considered reasonable, are subject to known and unknown risks,
uncertainties and other factors which may cause actual results and
future events to differ materially from those expressed or implied by
such forward-looking statements. Such factors include, but are not
limited to: general business, economic and social uncertainties;
litigation, legislative, environmental and other judicial, regulatory,
political and competitive developments; delay or failure to receive
board, shareholder or regulatory approvals; those additional risks set
out in Search's public documents filed on SEDAR at www.sedar.com; and other matters discussed in this news release. Although Search
believes that the assumptions and factors used in preparing the
forward-looking statements are reasonable, undue reliance should not be
placed on these statements, which only apply as of the date this news
release, and no assurance can be given that such events will occur in
the disclosed time frames or at all. Except where required by law,
Search, MSFA and the Vendors disclaim any intention or obligation to
update or revise any forward-looking statement, whether as a result of
new information, future events, or otherwise.
SOURCE Search Minerals Inc.