TORONTO, ONTARIO--(Marketwire - March 10, 2010) -
(All dollar amounts are expressed in United States currency unless otherwise stated.)
GlobeStar Mining Corporation ("GlobeStar") (TSX:GMI) today announced an increase in cash balances and a reduction in debt as at December 31, 2009 and provided production, operating and exploration guidance for 2010.
Cash and Debt Balances
The unaudited cash and restricted cash totalled approximately $16.3 million at December 31, 2009, an increase of $3.6 million during the fourth quarter of 2009. The amount outstanding on GlobeStar's senior debt facility with Nedbank totalled an unaudited $37.5 million at the end of the fourth quarter, after making the scheduled quarterly repayment of $2.7 million, including accrued interest, on December 31, 2009.
Guidance for 2010
Production guidance for 2010 reflects the continuation of the operating levels achieved in the second half of 2009. Total production from the Cerro de Maimon Mine in 2010 is forecast at approximately 24 million pounds of copper, 15,000 ounces of gold and 480,000 ounces of silver.
The sulphide plant is forecast to produce approximately 24 million pounds of copper, 6,000 ounces of gold and 380,000 ounces of silver in concentrate during 2010. The oxide plant is expected to produce approximately 9,000 ounces of gold and 100,000 ounces of silver in precipitate which will be smelted and refined into dore bars.
Production costs, including treatment, refining and shipment charges to market are forecast to be approximately $0.95 per pound of payable copper after byproduct credits. Treatment and refining charges are expected to be in line with the 2010 industry wide marketing charges. The operating costs include a provision for the treating of discharged water which is expected to commence in the second quarter of 2010.
Capital costs during 2010 are forecast to include approximately $4.2 million in tailings pond construction, approximately $1.4 million for the purchase of additional critical spares and $1.0 million of expenditures on plant and equipment.
Scheduled principal repayments during 2010 under the Nedbank senior debt facility total approximately $9.4 million. Additional principal prepayments, mandatory and voluntary, may be made during 2010.
Copper and Gold Exploration Programs in the Dominican Republic
During 2010, GlobeStar intends to continue intensive exploration of its 328 square kilometre land package in the Dominican Republic with particular emphasis on copper and gold exploration targets within 5 kilometres of the Cerro de Maimon Mine which may result in discoveries that would extend the nine year life of the mine.
Additionally, GlobeStar expects to continue exploration in the Bayaguana District located approximately 60 kilometres east of the Cerro de Maimon Mine. The primary target area is Cerro Kiosko where a Canadian National Instrument ("NI") 43-101 compliant estimated inferred resource has been defined of 4.9 million tonnes grading 0.98% copper, 2.0 grams gold per tonne and 5.1 grams of silver per tonne at a cut-off grade of 0.35 grams of gold per tonne. Cerro Kiosko hosts approximately 300,000 ounces of gold in this resource.
Total exploration expenditures in the Dominican Republic are budgeted at approximately $3.5 million for 2010.
Moblan Lithium Exploration
GlobeStar (60% ownership) and its joint venture partner SOQUEM Inc. (40% ownership) have commenced a drill program at the Moblan Lithium Project using two drill rigs which are expected to drill approximately 15,000 metres in an estimated 100 holes. The objective of the program is to significantly expand the NI 43-101 compliant estimated inferred resource of 5.3 million tonnes grading 1.5% Li2O at a cut-off grade of 0.43% Li2O. The total approved budget for 2010 at Moblan is $3.2 million.
GlobeStar will likely examine its strategic alternatives with respect to Moblan during 2010 as the value of this significant lithium asset is probably not being appropriately reflected in GlobeStar's market capitalization.
Cumpie Hill Nickel Laterite Deposit
GlobeStar continues to evaluate the options available to reinitiate the development of the Cumpie Hill nickel laterite deposit located four kilometres from the Cerro de Maimon Mine and within 10 kilometres of Xstrata's nickel smelter. Cumpie Hill has a NI 43-101-compliant estimated indicated and inferred mineral resource of 6.2 million tonnes grading 1.5% nickel at a cut-off grade of 1% nickel containing an estimated 200 million pounds of nickel.
About GlobeStar
GlobeStar Mining Corporation is a Canadian-based mining and exploration company producing copper, gold and silver at its Cerro de Maimon Mine in the Dominican Republic. GlobeStar is exploring for copper and gold on its extensive mineral concessions in the Dominican Republic, and also holds significant interests in the Moblan Lithium Project in Quebec, Canada, and the Cumpie Hill lateritic nickel deposit in the Dominican Republic. GlobeStar maintains a listing on the Toronto Stock Exchange (symbol: GMI).
A.E. Olson, M AusIMM, GlobeStar's Senior Vice President and COO and a Qualified Person as defined under NI 43-101, supervised the preparation of and verified the technical information contained in this release, other than that related to the Moblan Lithium Project, which was verified by Gary H. K. Pearse, P.Eng., of Equapolar Resource Consultants, who is also a Qualified Person under NI 43-101.
Cautionary Statements Concerning Forward-Looking Statements
This news release contains certain forward-looking information and forward-looking statements, as defined in applicable securities laws (collectively referred to as ''forward-looking statements''). Forward-looking statements include, but are not limited to, possible events and statements with respect to possible events. The words "plans," "expects," "is expected," "scheduled," "estimates," "forecasts," "projects," "intends," "anticipates," or "believes," or variations of such words and phrases or statements that certain actions, events or results "may," "could," "would," "might," or "will be taken," "occur," and similar expressions identify forward-looking statements.
Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable to GlobeStar as of the date of such statements, are inherently subject to significant risks and uncertainties and may not be appropriate for use other than as used herein. These estimates and assumptions include, but are not limited to: (a) the ability of the sulphide and oxide plants at the Cerro de Maimon Mine to operate at their design capacities and meeting operating and other estimated costs and expenses; (b) certain assumptions relating to the market price for copper, gold and silver and the expected levels of supply and demand for copper, gold and silver and quantities hedged; (c) there being no significant disruptions affecting operations at the Cerro de Maimon Mine, whether due to labour disruptions, supply disruptions, power disruptions, damage to equipment, naturally occurring events or otherwise; (d) production at the Cerro de Maimon Mine for 2010 being consistent with GlobeStar's plans; (e) the continued operation of the Cerro de Maimon Mine (f) the ability to control exploration and capital expenditures at budgeted levels and (f) counterparties to all hedges and call options meet their contractual obligations. 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, implied or indicated by these forward-looking statements. Although GlobeStar believes that the expectations reflected in its forward-looking statements are reasonable, we can give no assurances that the expectations of any forward-looking statements will prove to be correct. All of the forward-looking statements made in this news release are qualified by these cautionary statements and those made in the "Risk Factors" section of GlobeStar's most recently filed Annual Information Form and GlobeStar's other filings with the securities regulators of Canada. These factors are not intended to represent a complete list of the factors that could affect GlobeStar. 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 forward-looking statements or otherwise, or to explain any material difference between actual events and such forward-looking statements, except as required pursuant to applicable securities laws.