Red Rock Resources plc Proposed Sale of Interest in NAMA Greenland Ltd. (2192S)
28 November 2012 - 11:01PM
UK Regulatory
TIDMRRR
RNS Number : 2192S
Red Rock Resources plc
28 November 2012
Red Rock Resources Plc
("Red Rock" or the "Company")
Proposed Sale of Interest in NAMA Greenland Ltd.
28 November 2012
Red Rock Resources plc ("Red Rock" or the "Company) is pleased
to report that it has received an offer (subject to due diligence
and contract, and any necessary Red Rock shareholder consent) from
International Media Projects Ltd. ("IMP"), a private British Virgin
Island based company, on behalf of its industrial partner ("the
Investor"), to acquire 51% of the outstanding share capital ("the
Offer") of NAMA Greenland Ltd. ("NGL"), which holds direct
ownership of the Melville Bugt Iron Ore project ("the Project") in
Greenland.
The total consideration of the Offer is a $17.75M USD cash
payment, and is being made on the same terms to Red Rock and all
shareholders of NGL, so that on completion, the Investor would
directly and indirectly own a 51% interest in the shares of
NGL.
The Investor also agrees to carry the first $2M USD of further
capital required by NGL for completion of the proposed 2013 work
programme, after which shareholders in NGL may elect to finance
additional work pro rata to their shareholdings. A mine mouth
royalty of 2% of the value of the ore produced will be payable to
the selling shareholders pro rata to their acceptance of the Offer.
Further, a commission of 5% of consideration received under the
Offer will be payable by accepting shareholders to IMP.
The Offer letter which was accepted by Red Rock on 27 November
2012, defines the main contractual terms. The law firm representing
the Investor has provided a letter stating that the Investor has
the financial capacity and expertise to fund the Offer and develop
the Project.
A condition precedent of the Offer requires that Red Rock
exercises the option ("Option") (as announced by Red Rock on 6
January 2012 and originally on dated 3 March 2011) upon completion
of the Project's 2012 exploration programme and the announcement of
a mineral resource estimate, for the Company to be issued an
additional 35% of NGL to bring its total holding to 60%. This
mineral resource estimate is currently being finalized by SRK
Consulting UK, and is estimated to be delivered by the end of
December 2012.
Under the terms of the Offer, it is proposed that shareholders
of NGL transfer such amount of their interest in NGL so as to
provide the Investor with a 51% interest in NGL. Depending on
acceptance levels by its fellow shareholders in NGL, Red Rock will
transfer a minimum of 31% or a maximum of 46% of its shareholding
in NGL to the Investor. Should other shareholders of NGL chose not
to accept the Offer, the consideration receivable by Red Rock will
increase and Red Rock shareholder consent will be required for Red
Rock to accept the Offer.
Post Offer, Red Rock would retain an interest in the Project of
between 14% and 29% (dependent on NGL shareholder acceptance
levels) and would receive a cash consideration payment (gross of
any commission payable to IMP) that could vary between $10.7M and
$16.1M USD dependent on ultimate NGL shareholder acceptance
levels.
The Offer is subject to geological and legal due diligence
proceedings, which are currently being carried out, as well as to
completion of final documentation including the sale and purchase
agreement and as highlighted above, acceptance may be subject to
Red Rock shareholder consent. Closing is currently scheduled to
take place on 10 January 2013 or, if earlier, on the conclusion of
due diligence.
At this stage there can be no assurance that the parties will
enter into a definitive agreement nor guarantee that the terms of
the Offer will remain the same should a definitive agreement be
entered into.
The Company will make further announcements in due course.
Enquiries:
Andrew Bell 020 7402 4580 Red Rock Resources Chairman
or plc
07766 474849
Sandra Spencer 020 7402 4580 Red Rock Resources Press Relations
or plc
07757 660
798
Gerry Beaney 020 7383 5100 Grant Thornton Nominated Adviser
Daniela Amihood Corporate Finance
Nick Emerson 01483 413500 Simple Investments Broker
Ltd
This information is provided by RNS
The company news service from the London Stock Exchange
END
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