Doublestar eyes Standard Mining (July 06, 2001)

Vancouver — With its market capitalization falling below the listing requirements of the Toronto Stock Exchange, Standard Mining (SDM-T) has agreed to be acquired by junior Doublestar Resources (DRS-V).

The parties reached an agreement in principal for a share-swap deal. Standard shareholders will receive one share of Doublestar for each five shares held. Once the deal is complete, Standard will be a wholly owned subsidiary of Doublestar.

Prompting the deal is the combined synergies of the two companies. Both feel that the potential of sequenced mine development of their projects may attract the financing required to move forward.

The new entity would also reduce costs by combining accounting, legal and audit expenses.

Standard Mining is under review by the Toronto Stock Exchange because of its low market capitalization. The company is hopeful that the combined entity may solve this problem — if Canada’s major bourse accepts Doublestar for listing.

Standard Mining holds the Damoti Lake gold property in the Northwest Territories and the Zopilote gold property in Honduras.

Doublestar holds 31 properties in British Columbia, including the advanced Sustut copper-silver deposit.

The companies plan to develop Sustut first. Damoti Lake and Zopilote will be next.

Located 33 km south of the Kemess gold-copper mine in north-central B.C., the Southeast zone on the Sustut property hosts a total resource of 5.9 million tonnes averaging 1.87% copper and 6.11 grams silver per tonne. Of this, 4.2 million tonnes, grading 1.94% copper and 6.35 grams silver, fall into the measured category. Some 1.7 million tonnes, averaging 1.68% copper and 5.4 grams silver, are in the indicated and inferred categories.

The project was discovered in the early 1970s. Previous drilling consisted of 56,400 ft. It resulted in an indicated mineral resource of 23 million tons grading 1.11% copper in three deposits.

The Southeast deposit contains the highest grade and was therefore the company’s first drill target. According to Doublestar, the deposit is relatively shallow and environmental base line testing has been positive.

Doublestar acquired the property and 10 others last year in a deal with Falconbridge (FL-T).

The two companies have hired an accounting firm to determine that the valuation of the deal is fair to both parties.