Red Rock Resources RRR Proposed Sale of Interest in NAMA Greenland Ltd.

  Red Rock Resources (RRR) - Proposed Sale of Interest in NAMA Greenland Ltd.

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 or Red Rock Resources plc      Chairman

                07766 474849

                
Sandra Spencer  020 7402 4580 or Red Rock Resources plc      Press Relations

                07757 660 798

                
Gerry Beaney    020 7383 5100    Grant Thornton Corporate    Nominated Adviser
                                 Finance
Daniela Amihood                                              
                                 
Nick Emerson    01483 413500     Simple Investments Ltd      Broker



                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


MSCBBBDBCUDBGDI -0- Nov/28/2012 12:01 GMT
 
Press spacebar to pause and continue. Press esc to stop.