Memorandum of Understanding signed for the establishment and financing of a joint venture company to undertake Tri-Star Resources' roaster project

Tri-Star Resources Plc ("Tri-Star Resources" or "the Company")

LONDON, Oct. 9, 2013 /CNW/ - Tri-Star Resources (AIM: TSTR), the integrated antimony development company, is pleased to announce that it has entered into a non-binding Memorandum of Understanding ("MOU") with Oman Investment Fund ("OIF"), a Sovereign Wealth Fund of the Sultanate of Oman, and Castell Investments Ltd ("Castell") whose ultimate parent company is Dubai Transport Company to establish a joint venture company to construct and operate an antimony roasting facility (the "Roaster") in Oman. As previously announced, the Roaster, a 20,000 tonne per annum nameplate capacity antimony metal and tri-oxide manufacturing facility, has a total estimated cost of US$60 million.

The joint venture company, to be called Strategic & Precious Metals Processing LLC ("SPMP"), will be incorporated in the Sohar Free Trade Zone ("Sohar FTZ") in Oman, which is managed by Sohar Industrial Port Company SAOC ("Port of Sohar"), itself a joint venture between the Port of Rotterdam and the Sultanate of Oman. The Sohar FTZ is being developed into a major regional and international hub for the downstream processing of metals and minerals. It is served with excellent logistical nodes, including its close proximity to the Port of Sohar, and low energy costs. The fiscal regime for Sohar FTZ companies is also attractive with a zero corporation tax rate provided that certain Oman national employment levels are achieved. SPMP is expected to enter into a land lease over a 22 hectare plot in Sohar FTZ.

The MOU is non binding and remains subject to certain conditions including the completion of ongoing due diligence, securing banking finance and obtaining the necessary permits to operate the Roaster including environmental approvals. Tri-Star Resources, OIF and Castell (together the "Joint Venture Parties") are working towards the preparation of final binding joint venture agreements which are expected to be completed in November 2013.

Under the MOU, the Joint Venture Parties will own and control SPMP in the ratio 40% by Tri-Star Resources, 40% by OIF and 20% by Castell. Key strategic and operational decisions of the joint venture, as will be defined in a shareholders' agreement, will require the unanimous approval of all Joint Venture Parties.

The funding structure for the total capital cost of US$60 million is expected to include US$30 million of project finance to be raised from local and regional banks. A number of banks in Oman have been contacted by the Joint Venture Parties and indicative loan financing terms have been received and are under consideration.

The balance of the capital cost of US$30 million is expected to include a mezzanine loan of US$10 million from OIF with the balance of US$20 million to be provided as equity by the Joint Venture Parties, pro rata to their ownership interests, over the construction phase of the project.

Tri-Star Resources has already invested a considerable amount in developing the proprietary intellectual property and engineering design work for the environmentally compliant roasting of refractory ores to be used in the Roaster and also in other potential mineral processing operations (as discussed further below). As part of the overall commercial arrangements, the MOU anticipates that OIF and Castell will be invited to become co-owners of this intellectual property via investment in a separate company set up by Tri-Star Resources to own the rights to it.

The project has received a preliminary Green Light Statement from the Ministry of Environment and Climate Affairs, Sultanate of Oman ("MICA"), confirming that it has no objection to the Company proceeding with the environmental permit procedure for the antimony processing facility. A full environmental impact assessment ("EIA") is now being prepared by the Joint Venture Parties for the Roaster. The EIA is expected to be completed and submitted to MICA by the end of December 2013. Tri-Star Resources has revised the original project site plan and general site assembly (prepared for the former site in Ras al-Khaimah) to be compatible with the proposed 22 hectare site in the Sohar FTZ.

The Joint Venture Parties are progressing towards completing the final documentation, approvals and financing package so that site preparation work and construction can commence in the first quarter of 2014. The Roaster construction is expected to take 12 months with a further three months of commissioning. The first full year of operation is expected to be 2016.

Greenstone Equity Partners, a Dubai based investment and advisory firm, has advised Tri-Star Resources on the establishment of the joint venture and is advising the Joint Venture Parties on the debt financing for SPMP.

The Roaster is the first phase of the Company's proposed metal processing activities. The Joint Venture Parties anticipate the extension of their partnership to a second phase processing facility ("Phase 2"), which envisages using Tri-Star Resources' clean roasting technology to treat refractory gold sulfide concentrates. The Phase 2 project also expected to be located in the Sohar FTZ. Having completed a preliminary engineering design plant layout and general site assembly, the Company is negotiating an option to lease a further 76 hectare site adjoining the Roaster site. A preliminary technical report on the potential feasibility of the roasting technology developed by Tri-Star Resources to treat refractory gold concentrates has been commissioned from an independent engineering firm and is expected to be completed by the end of October 2013.

Tri-Star Resources' existing site in the Al Ghail free trade zone in Ras al Khaimah ("RAK") some 120km west of Sohar, is under review to assess its suitability to host a second refractory gold plant, a gold refining facility or an antimony tri-oxide based additives facility. The site is also being considered for utilisation of solid waste products from the processing facilities, such as gypsum for the growing plasterboard market in the Gulf.

Commenting on the signing of the MOU, Emin Eyi, Managing Director of Tri-Star Resources, said:

"We welcome our partners to the project in Sohar Free Trade Zone. Oman Investment Fund is a leading Sovereign Fund in the Gulf and Castell Investments Ltd is part of a diversified regional conglomerate based in Dubai. Both parties provide valuable skills and contributions to the Roaster project, which provides Tri-Star Resources with confidence on the deliverability of this and future projects in the GCC region.

We are impressed with the progress made by Sohar FTZ in becoming a metals and minerals processing hub in the Middle East. Our proposed projects, both Phase 1 in antimony tri-oxide processing and Phase 2 in refractory gold processing, are well suited to the future strategy of Sohar FTZ. Once fully operational they will be significant contributors to local employment and the economic development of the metals processing sector in Oman. The Sohar FTZ offers exceptional logistics and infrastructure nodes, delivers low energy costs and brings experience in minerals handling together with valuable fiscal incentives. The Joint Venture Parties recognise the importance of developing a strategic and precious metal focused, EU environmentally compliant processing facility to provide flame retardant ingredients to the global plastics and chemicals industry. Antimony tri-oxide is a critical additive for many vital manufacturing processes in Europe, USA and Japan. Hence, we believe that the plant in Sohar FTZ will be of strategic importance and a uniquely important project for Oman.

Phase 2 is a natural progression of the key processing technology developed by our team in roasting other high value sulfide concentrates. Many antimony deposits around the world contain significant gold and many gold deposits are refractory in nature due to the inclusion of sulfide minerals. We believe that our technology will provide an environmentally compliant means of reintroducing clean roasting as an alternative to other technologies deployed for refractory gold processing, such as; pressure oxidation, bacteria leaching or fine grinding. Geological estimates suggest that between 30% and 50% of the remaining gold resources in the world are refractory in nature to some degree. Further details on the engineering, market opportunity and possible economics of Phase 2 will be provided in the near future. We strongly believe that a 'renaissance of clean roasting' for gold and other strategic minerals is now timely both technically and economically."

About Tri-Star Resources

Tri-Star Resources is a focused antimony company whose management has many years experience in trading and mining this critical mineral. The Company's objective is to become the leading integrated antimony metal and products manufacturer to western economy consumers utilising an environmentally advanced 20,000 tonnes per annum name plate capacity antimony metal and tri-oxide production facility in the Gulf, with raw material supplied from its upstream resource projects in Turkey and Canada and from third party producers.
www.tri-starresources.com

About Oman Investment Fund

Oman Investment Fund is a Sovereign Wealth Fund of the Sultanate of Oman. It was established in 2006 to invest in long- and medium-term projects within and outside Oman. The OIF's aim is to achieve the best possible returns. Over the years the OIF has built a globally diversified investment portfolio including Real Estate and Private Equity assets across various sectors, covering Travel & Leisure, Financial Services, Utilities, Media & Entertainment, Telecom Infrastructure, Industrial Goods & Services, Industrial Transportation and Engineering sectors.
www.oif.om

About Castell Investments Ltd

Castell Investments Ltd is a private company which has been formed by Dubai Transport Company LLC, a diversified regional conglomerate based in Dubai.
www.dutco.com

This news release may contain "forward-looking information", as defined under applicable Canadian securities laws. Forward-looking information typically contains statements that relate to future, not past, events and often contains words such as "anticipate", "believe", "plan", "estimate", "expect", and "intend", statements that an action or event "may", "might", "could", "should", or "will" be taken or occur, or other similar expressions. There can be no assurance that the forward-looking information contained in this release will prove to be accurate, and actual results and future events could differ materially from those anticipated in such information.

All statements, other than statements of historical fact, included in this release including, without limitation, relating to the incorporation of SPMP, the proposed land lease in Sohar FTZ, the expected funding structure for the capital cost of the Roaster project, the expected timing for completion of the EIA and commencement of site preparation work and construction, and the plans and expected impact of the Roaster project, constitute forward-looking information. Forward-looking information is based on a number of factors and assumptions which have been used to develop such information but which may prove to be incorrect, including, but not limited to, assumptions in connection with the ability to satisfy all conditions to the MOU, the ability to obtain the EIA and to complete construction of the Roaster project, the availability of financing for the cost of the Roaster project on acceptable terms and general economic and market conditions. Forward-looking information involves known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. Such factors include, among others, risks associated with changes in laws applicable to the Roaster project, the volatility of commodity prices, currency exchange rates and interest rates, and global economic conditions, and the additional risks identified in the Company's Annual Report and Financial Statements for the year ended 31 December 2012 or other reports and filings with applicable securities regulators. Forward-looking information in this release is based on the Directors' beliefs, estimates and opinions on the date of this release and the Company does not undertake to update publicly or revise the forward-looking information contained in this release, except as required by applicable securities laws.

Any financial outlook or future-oriented financial information in this release, as defined by applicable Canadian securities laws, has been approved by the Directors as of the date of this release. Such financial outlook or future oriented financial information is provided for the purpose of providing information about the Company's current expectations and plans relating to the future. Readers are cautioned that such outlook or information should not be used for purposes other than for which it is disclosed in this release.

SOURCE Tri-Star Resources Plc