9th May 2007 07:01
Red Rock Resources plc09 May 2007 RED ROCK RESOURCES PLC Proposed Sale of Uranium Subsidiary Dated: 9th May 2007 Red Rock Resources plc ("Red Rock" or the "Company") the mineral exploration anddevelopment company focused on advancing iron ore, uranium and manganeseprojects in Australia and East/Southern Africa, today announces the proposedsale of Orion Exploration Pty Ltd ("Orion") its wholly owned uranium explorationsubsidiary and certain other uranium tenements. Retail Star Limited ("Retail Star"), a company listed on the Australian StockExchange (ASX:RSL) has agreed Heads of Terms to acquire 100% of Orion owner ofRed Rock's Australian and certain other uranium asset . Background to Retail Star Retail Star is an online retailer which until recently operated one ofAustralia's oldest retail brands. In 2006 the company was acquired andrestructured by the current shareholders and renamed Retail Star in order tocarry out online retailing as well as explore for alternative opportunities. Retail Star has stated it will at this stage continue its existing businessdeveloping an online retail website. No change of business is therefore deemedto occur. Proposed Transaction Red Rock has agreed to Retail Star purchasing 100% of Orion and acquiring otheruranium exploration interests of the Company. On completion the consideration for the acquisition is AUD1.5 million in cash.This cash consideration will be funded through Red Rock subscribing for 80million ordinary shares at an issue price of 1.5 cents each, 20 million options,with an exercise price of 2.5 cents each and an expiry date of 30 June 2008, atan issue price of 1.0 cent each and 20 million converting performance shares atan issue price of 0.5 cents, for a total subscription value of AUD1.5 million.The 20 million converting performance shares will convert into ordinary shareson a one for one basis when ELA 24414 (Mt Alfred) is granted. The Company hasalso been granted. Following the Company's subscription for 80 million ordinary shares in RetailStar, Red Rock will hold 15.5% of the issued ordinary share capital of RetailStar as enlarged by the acquisition of Orion and the proposed placing of 37.5million ordinary shares. A further 60 million converting performance shares will also be issued to RedRock in consideration of Retail Star being transferred certain explorationlicenses located in Southern Africa applied for by Red Rock ("African Tenements"). These performance shares similarly convert into ordinary shares on a one for one basis in the event that the African Tenements are granted and transferred to Orion. Retail Star has undertaken that it will hold not less than AuAUD1.25m cash oncompletion of the transaction. As part of the transaction, Retail Star intendsto raise a further AUD562,500 by the placing of 37,500,000 shares at 1.5 centseach, part of which will be used to fund the further development of thetenements. Red Rock will initially appoint two board directors to the board of Retail Starand is in negotiations to appoint a managing director with extensive uraniumexperience. Summary of Red Rock Assets Orion's assets consist of five granted exploration licences and one applicationfor an exploration licence in the Northern Territory also has an interest in agranted exploration licence in Western Australia. The details are as follows: Prospect Name Tenement Grant/(Application Size State Date) Celia ELA 24414 (10/07/04) 13.05 km2 NTMarrakai EL 24614 12/02/2005 20.9 km2 NTEdith River EL 23568 17/02/2003 228.8 km2 NTHayes Creek EL 24432 02/12/2005 130.1 km2 NTDaly River Road EL 24391 02/12/2005 20.04 km2 NTWoolgni EL 23569 17/06/2003 718.6 km2 NTYilgarn District E 29/581 08/09/2006 210.5 km2 WA Woolgni/Edith River Prospect - Northern Territory • Several uranium prospects were discovered in 1952 within the Lower Proterozoic Cullen Granite; the development of 9 vertical shafts with cross drive were completed with grades returning between 0.1% U - 0.2% U3O8. • The highly anomalous uranium grade is associated with shear/fault zones within the Cullen Granite. • Extensive radiometric anomalies remain untested throughout the area with little historical exploration work follow up. • Highly prospective for uranium mineralisation including unconformity, sandstone, quartz-pebble conglomerate, vein, and IOCGU deposit types. Celia Prospect - Northern Territory • Hosted within the highly favourable Rum Jungle Complex which has yielded over 70 mineral occurrences of a variety of commodities. Past mining has included uranium, base metals and gold. • Two extensive untested radiometric anomalies over airborne uranium channel lies south and north-west within the current tenure area. Marrakai - Northern Territory • Untested radiometric anomalies are associated with the favourable lithologies and structures which have hosted uranium deposits in the Pine Creek region. • The area shows potential to host unconformity-type uranium deposits as the radiometric anomalies are associated with sandstone lithologies. • Primary exploration focus has concentrated on iron ore and gold mineralisation. Daly River Road - Northern Territory • Several first order and second order high priority radiometric anomalies are associated with sandstone units of the Pine Creek Area. • The area shows potential to host unconformity-type uranium deposits as the radiometric anomalies are associated with sandstone lithologies. Hayes Creek - Northern Territory • The tenement is located nearby uranium mined out deposits and uranium occurrences of Lady Josephine, Burrundie and Fleur de Lys. • The area highly prospective for unconformity-type uranium deposits, believed to be located at or near the contact between the Jindare Formation and the Stray Creek Sandstone. The tenement is hosted to one first/second order radiometric anomaly and five second order radiometric anomalies, which all remain untested. Mt Alfred Prospect - Western Australia • Tenement is compared to Lake Maitland and Yeelirrie type deposits. • Drainage systems around the region offer polymetallic possibilities. • Uranium anomalies identified by Uranerz in the mid 1970s. • Shallow auger drilling in 1977 by Uranerz returned results up to 150 ppm uranium (0.015%) from calcrete horizons. Other Assets to be Acquired Red Rock Resources Plc has applied for exploration licenses in Southern Africa.The licence areas (if granted), will amount to 530 sq km, and have beenhighlighted by an independent party as being prospective for uraniummineralisation. If these licences are granted, Red Rock Resources Plc has agreed to transferthem to Orion in exchange for the conversion of 60 million of the performanceshares into ordinary shares. Conditions The transaction is dependent on approval by shareholders of Retail Star. RetailStar expects to hold a meeting of shareholders on or around 13th July 2007. Capital Structure of Retail Star on completion of the acquisition of Orion andthe placing A BRatios: Shares Class Shares Class Shares Vendor % 2.5c OptionsExisting 395,529,753 Nil Nil 66.7%Placement 37,500,000 Nil Nil 6.3%Subscription/Acquisition 80,000,000 20,000,000 60,000,000 20,000,000 27.0% Total 513,029,753 20,000,000 60,000,000 20,000,000 Enquiries: Andrew Bell 07766 474849 Red Rock Resources plc Chairman John Simpson 020 7512 0191 ARM Corporate Finance Ltd Nominated Adviser Ron Marshman / John 020 7628 5518 City of London PR Limited Public RelationsGreenhalgh Updates on the Company's activities are regularly posted on Red Rock's website,www.rrrplc.com. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Red Rock Resources