Jun. 28, 2010 (Filing Services Canada) -- Coltstar Ventures Inc. (CTR - TSX Venture), ("Coltstar") announces that it has reached agreement to acquire two large iron ore exploration projects by purchasing a portfolio of licences and licence applications for iron/titanium properties in Queensland, Australia, and that it has staked the geologic extension of one of the largest undeveloped iron deposits in the world, located in the Northwest Territories, Canada.
Purchase of Ridge Exploration Pty Ltd.
Coltstar has entered into an agreement with D'Aguilar Gold Limited ("D'Aguilar") respecting the acquisition by Coltstar of all of the outstanding shares of Ridge Exploration Pty Ltd. ("Ridge"), an Australian company which holds exploration licences and has made exploration licence applications covering approximately 3,200 square kilometres in Queensland, Australia. The land package covers substantially all of a new iron-ore and titanium province in an area of excellent infrastructure. Prospects include Cadarga, covering up to 300 km2, which has yielded samples from 33.7% to 55.2% iron, and Monogorilby, which has yielded samples from 4.4%% to 31.0% TiO2 at surface, contained within an area of extensive mineralization over 6 km2. Preliminary metallurgical testwork indicates low impurities and the potential for excellent titanium recoveries.
An NI 43-101 compliant technical report is currently being prepared in respect of the Ridge properties. Readers are cautioned that until Coltstar has received this technical report, it has insufficient information regarding the properties to assess the potential quantity and grade of any mineralization on the properties, and they should be regarded as exploration targets only.
D'Aguilar holds 86% of the issued and outstanding shares of Ridge, and has represented to Coltstar that it can require the holders of the remaining 14% of the Ridge shares to sell their Ridge shares to Coltstar on the same terms. The aggregate consideration for the purchase of all the Ridge shares 10,000,000 common shares of Coltstar, which are to be issued at a price of $0.35 per share, representing approximately 27% of Coltstar's outstanding shares on a post-closing basis. D'Aguilar will hold approximately 23% of Coltstar's outstanding shares on closing. The Ridge acquisition agreement also provides for the appointment of a nominee D'Aguilar to Coltstar's board of Directors. D'Aguilar has agreed as part of the share purchase agreement to direct certain future iron ore opportunities to Coltstar and refrain from competing with Coltstar in respect of iron-ore focussed projects for a period of five years. In return, in the event that Ridge or its assets are disposed of by Coltstar within this period, it must be a term of such disposition that D'Aguilar and Coltstar be granted a 1.25% NSR, and D'Aguilar is entitled to 2 million shares of any acquiring entity which acquires Ridge or its assets, and warrants to purchase 10% of such acquiring entity. A finder's fee of $245,000 will be paid to a third party upon completion of the acquisition, which will be paid in common shares of Coltstar issued at a price of $0.35 per share.
Completion of the acquisition of Ridge is subject to a number of conditions, including satisfactory completion of mutual due diligence, the delivery to Coltstar of an NI 43-101 compliant technical report concerning the Ridge properties, and TSX Venture Exchange approval, each of which conditions must be satisfied on or prior to September 30, 2010. It is a further condition to the agreement that either each of the Ridge shareholders join D'Aguilar in signing the definitive agreement respecting the sale of their Ridge shares on or before July 22, 2010 or that D'Aguilar otherwise satisfies Coltstar that the other Ridge shareholders are legally obligated to sell their shares to Coltstar on the same terms as D'Aguilar. Under applicable TSX Venture rules, the approval of the transaction by Coltstar's shareholders is also required, as a new control person will be created as a result of issuance of the Coltstar shares to be issued as consideration to the Ridge shareholders.
Staking of Big Iron, Canada
Coltstar has also staked the 120 km-long eastern extension of the Rapitan Group which hosts Chevron Canada Limited's Crest iron deposit. Chevron's 60,000 ha property straddles the Yukon - Northwest Territories border in Northern Canada. Coltstar has staked over 95,805 ha (958 sq km) that is contiguous with Chevron's property. This staking was based on geochemical results and existing geological maps prepared by the Geological Survey of Canada.
In 2006, Hatch Consulting Ltd. concluded that "the Crest iron ore deposit is believed to be the second largest iron ore deposit in the world with an estimated 20 to 30 billion tonne 'resource', of which 50% is reportedly suitable for open-pit mining." Hatch estimates that the Iron Creek area of the Crest Deposit has an historical (non NI-43-101 compliant) resource of more than 11 billion tonnes containing between 41% and 45% iron; six billion tonnes of which can be processed with a stripping ratio of less than 1:1 (per Chevron Canada Resources Snake River Iron Ore report, Hatch Consulting July 17, 2006). Past Chevron reports show "promise of an iron ore deposit with capacity for 400 years of production." Chevron's evaluation studies carried out between 1961 and 1965 indicated that, the resource material could be beneficiated with an 85% iron recovery rate.
The Coltstar Property also covers the underlying Neoproterozoic Coates Lake Group which hosts numerous copper prospects over a 300 km strike length to the south of Crest. Copper mineralization occurs within the Coates Lake Group and Rapitan Group but the most economically significant occurrences are found in eight copper-bearing beds of the Transition Zone. Western Copper Corporation has reported that their Redstone deposit in this region has a NI 43-101 compliant Inferred resource estimate of 34 million tonnes of 3.92% copper and 9.0 g/t gold (per company public reports). There is no certainty that similar copper or iron deposits will be found or developed on the Company's properties.
Conclusion
Damien Reynolds, Chairman and CEO of Coltstar, noted, "We are pleased to have made these significant acquisitions in two of the better jurisdictions for iron-ore mining - Australia and Canada. In the last decade China has undergone unprecedented industrialization and this relentless growth will be maintained in the next decade by a government-led urbanization initiative. To support this urbanization there must be continued fixed asset investment in infrastructure and buildings, by government and the private sector. The continuing demand for steel, resulting from this positive trend, suggests that potentially large iron-ore projects may drive significant value for Coltstar investors."
Coltstar plans to undertake detailed sampling and mapping on both the Ridge prospects and the Big Iron project, in conjunction with geophysical studies, prior to developing a drilling program for each property. Maps for both projects will shortly be available on the Company's website at www.coltstarventures.com.
Coltstar Ventures Inc. is a mineral exploration company that is currently exploring for base and precious metals in Europe and Canada. Mr. David DuPre, a director of Coltstar, is a Qualified Person under the guidelines of National Instrument 43-101 and has reviewed and approved the geological information contained in this news release.
On behalf of the Board of Directors
"Damien Reynolds"
Chairman, President and CEO of Coltstar Ventures Inc.
For further information please contact:
Garry Stock
Telephone: (604) 683-8236
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Coltstar Ventures Inc.
Suite 1680, 200 Burrard Street
Vancouver, BC
Canada V6C 3L6
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