Arizona Star Resource Corp. ("Arizona Star") (TSX VENTURE: AZS)(AMEX: AZS) is pleased to announce that it has entered into definitive agreements with Barrick Gold Corporation ("Barrick") and Bema Gold Corporation ("Bema") and that Arizona Star and Bema are proceeding to complete the acquisition of Barrick's (formerly Placer Dome Inc.'s) 51% of the shares of Compania Minera Casale ("CMC"), the owner of the Aldebaran Property in northern Chile. The definitive agreements are pursuant to the agreement in principle with Placer Dome to sell its interest in CMC announced on October 26, 2005. The transfer of Barrick's interest is expected to occur in the next week upon completion of closing requirements in Chile.
Under the terms of these agreements, Arizona Star and Bema will jointly pay to Barrick US$10 million upon a decision to construct a mine at Cerro Casale and either (a) a gold payment beginning 12 months after commencement of production consisting of 10,000 ounces of gold per year for five years and 20,000 ounces of gold per year for a subsequent seven years; or (b) a cash payment of US$70 million payable when a construction decision is made, at the election of Arizona Star and Bema.
Cerro Casale, discovered by Arizona Star and Bema, in 1996, is one of the world's largest undeveloped gold and copper deposits, with an estimated mineral reserve (100%) of 1.035 billion tonnes containing 23 million ounces of gold and 6 billion pounds of copper with an average grade of 0.69 g/t gold and a copper grade of 0.26%. According to the feasibility study updated by Placer Dome Inc. in March 2004, the mine was projected to produce approximately 975,000 ounces of gold and 280 million pounds of copper annually for 18 years.
Arizona Star and Bema are in the process of completing a project development appraisal for Cerro Casale which has evaluated and modified ore processing concepts and updated the operating and capital costs. The results of this study will be announced shortly.
All resource estimates reported by the Company were calculated in accordance with the Canadian National Instrument 43-101 and the Canadian Institute of Mining and Metallurgy Classification system. These standards differ significantly from the requirements of the U.S. Securities and Exchange Commission. Mineral resources which are not mineral reserves do not have demonstrated economic viability.
Statements relating to the estimated or expected future production and operating results and costs and financial condition of Arizona Star, planned work at the Company's projects and the expected results of such work are forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by words such as the following: expects, plans, anticipates, believes, intends, estimates, projects, assumes, potential and similar expressions. Forward-looking statements also include reference to events or conditions that will, would, may, could or should occur. Information concerning exploration results and mineral reserve and resource estimates may also be deemed to be forward-looking statements, as it constitutes a prediction of what might be found to be present when and if a project is actually developed. These forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable at the time they are made, are inherently subject to a variety of risks and uncertainties which could cause actual events or results to differ materially from those reflected in the forward-looking statements, including, without limitation: uncertainties related to raising sufficient financing to fund the planned work in a timely manner and on acceptable terms; changes in planned work resulting from logistical, technical or other factors; the possibility that results of work will not fulfill projections/expectations and realize the perceived potential of the Company's projects; uncertainties involved in the interpretation of drilling results and other tests and the estimation of gold reserves and resources; risk of accidents, equipment breakdowns and labour disputes or other unanticipated difficulties or interruptions; the possibility of environmental issues at the Company's projects; the possibility of cost overruns or unanticipated expenses in work programs; the need to obtain permits and comply with environmental laws and regulations and other government requirements; fluctuations in the price of gold and other risks and uncertainties, including those described in the Company's Annual Information Form filed with SEDAR in Canada (available at www.sedar.com) for the year ended April 30, 2005, and in the Company's 40-F filed with the U.S. Securities and Exchange Commission available at EDGAR).
Forward-looking statements are based on the beliefs, estimates and opinions of the Company's management or its independent professional consultants on the date the statements are made.
ON BEHALF OF THE BOARD
"Paul A. Parisotto"
President & CEO
The TSX Venture Exchange neither approves nor disapproves the information contained in this News Release.
Arizona Star Resource Corp.
President and CEO