Megastar to Acquire 100% of Rama de Oro Epithermal Au-Ag Project in Oaxaca, Mexico
MEGASTAR DEVELOPMENT CORP. #1450 - 789 W. Pender Street, Vancouver, BC, Canada V6C 1H2
Tel.: (604) 681-1568, Fax: (604) 681-8240
Toll Free: 1-877-377-6222
www.megastardevelopment.com
TSX-V: MDV Frankfurt: M5QN
Megastar to Acquire 100% of Rama de Oro Epithermal Au-Ag Project in Oaxaca, Mexico
Vancouver, BC, Canada, May 10 2018 - Megastar Development Corporation (“Megastar”, the
“Company” or “MDV”) (TSX-V: MDV; Frankfurt: M5QN) is pleased to announce that it has signed a
Definitive Option Agreement (the “Agreement”) with Paradex Inc. (”Paradex”), a private Arizona, USA
mining exploration company, and Minera Zalamera, S.A. DE C.V. (“ Minera Zalamera”), a private
Chihuahua, Mexico mining exploration company, to acquire 100% undivided interest (the “Rama de
Oro Option”) in certain mineral concessions (the “Concessions”) known as the Rama de Oro project
(the “Project”) located in the state of Oaxaca, Mexico.
“We are very excited to have concluded on this agreement ,” said Dusan Berka, CEO of Megastar
Development. “The project has been on our radar for some time and brings with it two important
ingredients for early stage exploration; location and expertise. On location, the property sits on the
trend between two producing mines; the Switchback mine owned by Gold Resource Corp. to the north
and the San Jose mine owned by Fortuna Silver Mines to the south. From a technical perspective, the
property is being vended in by David Jones, a geologist with extensive experie nce and success in
Mexico having been part of the finds of several , now-producing mines. David will also be an
instrumental part of the exploration team, allowing us to benefit from his historical understanding of the
property and its surrounding geology.”
In connection with the Option, upon receipt of the required regulatory approvals, Mr. David Jones,
President of Paradex and Minera Zalamera, will be appointed to the Board of Directors of Megastar and
shall also become a technical advisor/consultant to the Company in relation to its exploration activities
in Mexico. Mr. Jones is a graduate of Dartmouth College and the University of Arizona with 40 years
experience in mineral exploration and project development in the U.S. and Latin America. As the
foremost expert in the Guerrero Gold Belt, Mr. Jones discovered the Los Filos gold deposit in 1995
(Teck), was the leader of the technical team that won the bid for the Morelos reserve in 1998 (El Limon-
Guajes deposits) and served as the principal geologic advisor in the start-up of Torex Gold Resources
Inc. For the past 16 years he has worked extensively in epithermal precious metals system in Oaxaca
and was responsible for targeting the recent discovery of Gold Resource Corporation’s (NYSE: GORO)
polymetallic Switchback mine. Mr. Jones was a board member of Cayden Resources Inc. at the time of
its $205 million sale to Agnico Eagle, and is currently a director of both Minaurum Gold Inc. (TSX -v:
MGG) and the private concern Acapulco Gold.
Rama de Oro Project:
The Project lies to the northwest of and borders the La Calavera and Cobre Grande copper -gold
porphyry-skarn projects in east-central Oaxaca. It also lies to the north of the WNW -ESE San José
structural zone defined by Gold Resource Corporation
(http://www.goldresourcecorp.com/exploration.php). The Project is hosted by caldera-related Tertiary
volcanic rocks (e.g. El Aguila model) crosscut by hydrothermal veining inferred to be related to late -
stage granitic magmatism locally exposed as dikes and underl ying the adjacent ‘Nueve Puntos’
mountain. Similar intrusions are associated with a 43 -101 inferred resource of 49.8 MT containing
0.5% Cu, 0.04% Mo, 0.22% Zn and 12.9 g/t Ag at the Cobre Grande skarn system, which lies 6 km to
the east, along the same structural trend (Source: TECHNICAL REPORT ON THE COBRE GRANDE
PROJECT, OAXACA STATE, MEXICO prepared for Linear Metals Corporation (now Stockport
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Exploration Inc.), David A. Ross, M.Sc., P.Geo. and Paul Chamois, M.Sc. (Applied), P.Geo., May 6,
2008 - available on SEDAR on the issuer profile of Stockport Exploration Inc.).
Access to the Project is by two-lane paved highway from Oaxaca followed by improved dirt roads from
Santiago Matatlán to the western side of the project area. Numerous dirt farm roads and pat hs afford
access to majority of the project area. Oaxaca City, Santiago Matatlán, and San Pablo Villa de Mitla
are local sources of skilled workers, water, and power for the project.
To date, exploration work at Rama de Oro has consisted of reconnaissanc e geological mapping and
rock-chip sampling. This work has outlined a 4 square-kilometre zone of quartz veining, silicification,
and clay alteration of volcanic rocks inside and near the eastern margin of a Miocene caldera. Several
rock samples assayed anomalous values of gold, silver, arsenic, mercury, and antimony, suggesting
that the present-day surface represents high structural levels of a precious metal system.
In connection with the Option, Megastar has commissioned the preparation of a technical report (the
“Report”) prepared in accordance with the requirements of National Instrument 43-101 (“NI 43-101”).
Stephen R. Maynard, M.S., C.P.G. Consulting Geologist, and an independent qualified person under NI
43-101 prepared the Report. The Report has been submitted to the Exchange for review and approval.
The Report will be filed on SEDAR (www.sedar.com) in the Company’s SEDAR profile shortly following
the issuance of this news release.
The author of the Report recommends a 2-phase exploration program. The first phase consists of
detailed geological mapping, rock- and soil-geochemical sampling, and an induced polarization -
resistivity survey to define drill targets. The cost of the first phase is estimated at USD $167,750. A
second phase, consisting of a 6-hole, 3,600-metre diamond-drilling program, would be dependent on
results of the first part of the program. The cost of the second phase is estimated at USD $972,000.
Terms of the Rama de Oro Option:
In accordance with the Agreement, Minera Zalamera has granted Megastar the sole and exclusive right
to acquire a 100% interest over a period of two (2) years following the execution of the Agreement in
exchange for a cash payment of USD $35,000, the issuance of a total 2.9 million common shares of
Megastar (the “Common Shares”) and total work expenditures of USD $350,000. As such, within a
delay of fifteen (15) days following the execution of the Agreement, subject to the approval of the TSX
Venture Exchange (the “Exchange”), Megastar shall pay to Minera Zalamera the sum of USD $35,000
and issue to Minera Zalamera 1,100,000 Common Shares. Thereafter, over a 2-year period, Megastar
shall issue the following Common Shares to Minera Zalamera and incur the following work
expenditures:
MILESTONE SHARES WORK EXPENDITURES
1st Anniversary 600,000 USD $150,000
2nd Anniversary 1,200,000 USD $200,000
Upon the successful completion of the Option by Megastar, Minera Zalamera shall retain a royalty
equal to 2% net smelter return (the “NSR”). Megastar shall have the right to purchase 1% of the NSR,
at any time and at its sole discretion, for a purchase price of USD $1,650,000.
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All securities to be issued in connection with the transactions will be subject to a hold period of 4
months and one day from their date of issuan ce. Furthermore, the Transaction remains subject to
regulatory approval.
Stephen R. Maynard, M.S., C.P.G. Consulting Geologist, a qualified person in accordance with NI 43 -
101, has reviewed and accepted the technical information in this news release.
ABOUT MEGASTAR DEVELOPMENT CORP.
Megastar Development Corp. is an emerging resource company engaged in the evaluation, acquisition
and exploration of mineral properties. Megastar currently owns mineral property in Quebec. For further
information, investors and shareholders are invited to visit the Company’s website at
www.megastardevelopment.com or call the office at 604-681-1568, or toll free at 1-877-377-6222.
ON BEHALF OF THE BOARD OF DIRECTORS
”DUSAN BERKA”
Dusan Berka, P. Eng.
President & CEO
Neither the 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 news release.
FORWARD LOOKING STATEMENTS AND DISCLAIMER
Some statements in this release may contain forward-looking information. All statements, other than of historical
fact, that address activities, events or developments that the Corporation believes, expects or anticipates will or
may occur in the future (including, without limitation, statements regarding potential mineralization) are forward -
looking statements. Forward-looking statements are generally identifiable by use of the words “may”, “will”,
“should”, “continue”, “expect”, “anticipate”, “estimate”, “believe”, “intend”, “plan” or “project” or the negative of
these words or other variations on these words or comparable terminology. Forward -looking statements are
subject to a number of risks and uncertainties, many of which are beyond the Corporation’s ability to control or
predict, that may cause the actual results of the Corporation to differ materially from those discussed in the
forward-looking statements. Factors that could cause actual results or eve nts to differ materially from current
expectations include, among other things, without limitation, failure by the parties to complete the Transaction,
failure to establish estimated mineral resources, the possibility that future exploration results will not be consistent
with the Corporation's expectations, changes in world markets for precious metals or markets for other
commodities, and other risks disclosed in the Corporations’ public disclosure record on file with the relevant
securities regulatory authorities. Any forward-looking statement speaks only as of the date on which it is made
and except as may be required by applicable securities laws, the Corporation disclaims any intent or obligation to
update any forward-looking statement