MINNEAPOLIS, July 3, 2014 /CNW/ - Reliance Resources
Limited (TSXV: RI) ("Reliance") or ("the Company") is pleased to
announce an expansion to its iron exploration and development
business activities and a related interim private placement, as
well as to provide this shareholder update.
Application submitted to lease 24 additional iron
properties.
The Company has recently submitted to the Minnesota Department
of Natural Resources ("DNR") applications to lease an additional 24
iron stockpile and tailings properties (the "properties") in the
vicinity of Hibbing, Minnesota.
Terms for leases on the properties have been negotiated
between the Company and the DNR, and execution of the leases is
expected within one week. A Technical Report on Form NI
43-101 has been completed by a Qualified Person retained by the
Company on three of the first property areas. Additional
Technical Reports will be prepared on many of the other properties
during the next few months.
In addition, the Company is negotiating for the services of the
Natural Resource Research Institute ("NRRI"), a department of the
University of Minnesota at Duluth, at
its metallurgical and laboratory facilities at Coleraine, Minnesota, and for its cooperation
and assistance in the evaluation of the processing technologies
that could potentially be used in the properties in the future.
Interim private placement, roll back of shares on a five for
one basis, and lifting of the trading halt.
The Company also announced on April
7 a pending five for one consolidation of its common
shares. The Company has filed the necessary forms with the
TSX Venture Exchange for the consolidation of the Company's common
shares on a five for one basis as previously announced and for the
lifting of the trading halt. Completion of these
matters is now awaiting final approval by the Exchange.
The Company is pleased to announce that it has also filed for
conditional approval of an interim private placement financing of
$200,000. Proceeds from this
financing will be used to finance the acquisition of leases on the
properties, preparation of Technical Reports on Form 43-101,
systematic sampling and assaying, and ongoing metallurgical test
work, as well as administrative and general costs and expenses of
the Company, pending the closing of the acquisition
transaction. The issue price of the private placement will be
the greater of $0.05 per share, on a
post-consolidation basis, or the 5-day volume weighted average
price of the Company's shares in the market for the 5-day period
immediately following the lifting of the trading halt. The
interim financing will carry a full warrant at an exercise price
equal to the issue price, exercisable over a 12-month period
following closing of the financing.
Update on Indonesian property rights – Kapa-Kapa and Roko
properties
The Company recently received letters from an Indonesian law
firm representing PT. Hibualamo Jaya ("Jaya") dated March 24, 2014 and April
2, 2014 (the "letters") purporting to inform the Company
that the Joint Cooperation for the Exploration and Exploitation of
Precious Metal (the "agreement") dated January 14, 2008 between Jaya and the Company's
wholly-owned subsidiary, PT Champion Halmahera Mining, does not
have force. The agreement relates to the the Kapa-Kapa and
Roko properties (the "properties") in Indonesia. The letters further informed the
Company of a decision by the District Court of Central Jakarta, dated May 21, 2013, purporting to declare that the
agreement 'does not have force' as it concerns the
properties. The court decision appears to have been the
result of an ex parte proceeding in which the Company was not
present to represent its rights and interests.
The Company is reviewing the decision of the court and believes
it is improper and invalid. The Company is commencing a
counter suit in the Jakarta courts
to have the court decision annulled. The Company will
vigorously pursue its rights in this matter.
While Reliance is working to complete the acquisition
transaction, it is also actively investigating options to obtain
maximum benefit from its existing Indonesian assets.
Shareholders will be notified at an appropriate time on the
outcome of these efforts.
On behalf of the Board of Directors of Reliance
George S. Young
Chairman, CEO and Director
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 release.
Forward-Looking Information
This news release contains "forward-looking information" and
"forward-looking statements" (collectively, "forward-looking
information") within the meaning of applicable securities
laws. Forward-looking information is generally identifiable
by use of the words "believes," "may," "plans," "will,"
"anticipates," "intends," "could", "estimates", "expects",
"forecasts", "projects" and similar expressions, and the negative
of such expressions. Forward-looking information in this news
release include statements about the proposed Transaction, proposed
management restructuring, American Iron's proposed acquisition of
its Mineral Properties and the Company's future plans, objectives
and business strategy.
In connection with the forward-looking information contained
in this news release, the Company has made numerous assumptions,
regarding, among other things, the assumption that the parties will
complete the principal conditions for completion of the
Transaction, including but not limited to the Company's completion
of the Financing and acquisition of the Mineral Properties;
the receipt of necessary shareholder and regulatory approvals; and
the assumption the Company will continue as a going concern and
will continue to be able to access the capital required to advance
its projects and continue operations. While the Company
considers these assumptions to be reasonable, these assumptions are
inherently subject to significant uncertainties and
contingencies. In addition, there are known and unknown risk
factors which could cause the Company's actual results, performance
or achievements to be materially different from any future results,
performance or achievements expressed or implied by the
forward-looking information contained herein. Known risk
factors include, among others: the inability of American Iron to
acquire the Mineral Properties; the possibility that the Financing
will not be completed; and the possibility that the Company may not
be able to continue as a going concern in the near term.
All forward-looking information herein is qualified in its
entirety by this cautionary statement, and the Company disclaims
any obligation to revise or update any such forward-looking
information or to publicly announce the result of any revisions to
any of the forward-looking information contained herein to reflect
future results, events or developments, except as required by
law.
SOURCE Reliance Resources Ltd.