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Share Name | Share Symbol | Market | Type |
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TSXV:RRD.P | TSX Venture | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 0 | - |
THIS PRESS RELEASE IS NOT FOR DISTRIBUTION IN THE UNITED STATES OR TO U.S. NEWS AGENCIES Red Rock Capital Corp. ("Red Rock" or the "Company") (TSX VENTURE:RRD.P) is pleased to provide the following update in connection with the Company's proposed qualifying transaction (the "Qualifying Transaction") involving Century Iron Ore Holdings Inc. ("Century Holdings"). Century Holdings has entered into a binding framework agreement (the "Framework Agreement") with WISCO International Resources Development & Investment Limited ("WISCO"). The Framework Agreement sets out a strategic relationship between Century Holdings and WISCO that will involve (i) a private placement by WISCO into Century Holdings, (ii) joint venture agreements between Century Holdings and WISCO for ownership of the Century Holdings subsidiaries that hold interests in the Duncan Lake, Attikamagen and Sunny Lake properties, and (iii) iron ore off-take agreements in favour of WISCO for each of the Century Holdings' properties. Pursuant to the Framework Agreement, Century Holdings and WISCO will enter into a subscription agreement whereby WISCO will agree to purchase common shares of Century Holdings that will result in WISCO owning 25% of the issued and outstanding shares of the Company upon completion of the Qualifying Transaction (on a non-diluted basis). The price to be paid by WISCO for the shares of Century Holdings will equal the offering price of the securities offered by Century Holdings in its planned brokered private placement with Haywood Securities to be completed in connection with the Qualifying Transaction, less a discount of 10%. WISCO will agree to an 18 month lock-up with respect to its investment in the Company and to any escrow imposed by the TSX Venture Exchange (the "Exchange") in connection with the completion of the Qualifying Transaction. In addition, WISCO will enter into joint venture agreements with Century Holdings for ownership of the Century Holdings subsidiaries that hold interests in the Duncan Lake, Attikamagen and Sunny Lake properties. Under these joint venture agreements, WISCO will inject new capital in exchange for a 40% equity interest in each subsidiary based on valuations to be agreed upon by Century Holdings and WISCO. Thereafter, Century Holdings and WISCO will contribute, in accordance with their respective equity interests, up to 30% of each Century Holdings subsidiaries' proportionate share of the capital expenditure required to enable Duncan Lake, Attikamagen and Sunny Lake properties to achieve production. WISCO will assist to procure the 70% balance of each Century Holdings subsidiaries' proportionate share of the capital expenditure required to achieve production by arranging for debt financing on customary terms. The joint venture agreements will also provide WISCO with a first right to purchase at cost from an allocation of the total production output from each property in an amount equal to WISCO's equity interest in each subsidiary, plus an additional 20% at fair market value upon earning a 40% interest. The structure of the joint ventures and the form of the joint venture agreements remain to be negotiated between Century Holdings and WISCO. Each of Century Holdings' and WISCO's obligations to proceed with the transactions contemplated by the Framework Agreement are subject to the receipt of all required government approvals, including approvals under the laws of the People's Republic of China (the "PRC"), and to Century Holdings' receipt of the approval of the Exchange to the WISCO share subscription. Each party has agreed to use commercially reasonable efforts to obtain the required approvals. Century Holdings and WISCO have agreed to negotiate in good faith the definitive agreements required to give effect to the strategic relationship, including the subscription agreement and joint venture agreements. WISCO's obligation to purchase the common shares of Century Holdings will be binding and enforceable under the Framework Agreement notwithstanding that the joint venture agreements may not have been concluded at such time. It is contemplated that WISCO will complete its share subscription into Century Holdings upon receipt of PRC approvals and that the Qualifying Transaction would complete shortly thereafter. Certain information regarding the Company and Century Holdings, including the completion of the Qualifying Transaction, the WISCO private placement and the definitive joint venture agreements with WISCO, may constitute forward-looking statements under applicable securities laws and necessarily involve known and unknown risks and uncertainties. Certain important risk factors could cause the Company's actual results to differ materially from those expressed or implied by such forward-looking statements including, without limitation, approvals of the government of China, approval of the TSX-V, changes in the world wide price of mineral commodities and currency fluctuations, general market conditions, and the uncertainty of future profitability and access to sufficient capital. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements and caution should be exercised on placing undue reliance on forward looking information.
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