Proposed sale of subsidiary
May 09 2007 - 3:01AM
UK Regulatory
RNS Number:2655W
Red Rock Resources plc
09 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 and
development company focused on advancing iron ore, uranium and manganese
projects in Australia and East/Southern Africa, today announces the proposed
sale of Orion Exploration Pty Ltd ("Orion") its wholly owned uranium exploration
subsidiary and certain other uranium tenements.
Retail Star Limited ("Retail Star"), a company listed on the Australian Stock
Exchange (ASX:RSL) has agreed Heads of Terms to acquire 100% of Orion owner of
Red Rock's Australian and certain other uranium asset .
Background to Retail Star
Retail Star is an online retailer which until recently operated one of
Australia's oldest retail brands. In 2006 the company was acquired and
restructured by the current shareholders and renamed Retail Star in order to
carry out online retailing as well as explore for alternative opportunities.
Retail Star has stated it will at this stage continue its existing business
developing an online retail website. No change of business is therefore deemed
to occur.
Proposed Transaction
Red Rock has agreed to Retail Star purchasing 100% of Orion and acquiring other
uranium 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 80
million 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, at
an issue price of 1.0 cent each and 20 million converting performance shares at
an 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 shares
on a one for one basis when ELA 24414 (Mt Alfred) is granted. The Company has
also been granted.
Following the Company's subscription for 80 million ordinary shares in Retail
Star, Red Rock will hold 15.5% of the issued ordinary share capital of Retail
Star as enlarged by the acquisition of Orion and the proposed placing of 37.5
million ordinary shares.
A further 60 million converting performance shares will also be issued to Red
Rock in consideration of Retail Star being transferred certain exploration
licenses 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 on
completion of the transaction. As part of the transaction, Retail Star intends
to raise a further AUD562,500 by the placing of 37,500,000 shares at 1.5 cents
each, part of which will be used to fund the further development of the
tenements.
Red Rock will initially appoint two board directors to the board of Retail Star
and is in negotiations to appoint a managing director with extensive uranium
experience.
Summary of Red Rock Assets
Orion's assets consist of five granted exploration licences and one application
for an exploration licence in the Northern Territory also has an interest in a
granted 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 NT
Marrakai EL 24614 12/02/2005 20.9 km2 NT
Edith River EL 23568 17/02/2003 228.8 km2 NT
Hayes Creek EL 24432 02/12/2005 130.1 km2 NT
Daly River Road EL 24391 02/12/2005 20.04 km2 NT
Woolgni EL 23569 17/06/2003 718.6 km2 NT
Yilgarn 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 been
highlighted by an independent party as being prospective for uranium
mineralisation.
If these licences are granted, Red Rock Resources Plc has agreed to transfer
them to Orion in exchange for the conversion of 60 million of the performance
shares into ordinary shares.
Conditions
The transaction is dependent on approval by shareholders of Retail Star. Retail
Star 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 and
the placing
A B
Ratios: Shares Class Shares Class Shares Vendor %
2.5c
Options
Existing 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 Relations
Greenhalgh
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 Exchange
END
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