Resource Star Limited - Rights Issue

RNS Number : 7093W

Red Rock Resources plc

02 February 2012

 



Red Rock Resources plc

Resource Star Limited - Rights Issue

Date: 2 February 2012

Red Rock Resources plc ("Red Rock" or the "Company"), a mining and exploration company with a producing gold mine in Colombia; Kenyan gold and Greenland iron ore exploration projects; and interests in steel feed, uranium and rare earths, announces that its 24.57% owned associate company, Resource Star Limited (ASX:RSL)("RSL"), has today filed an Entitlement Issue Prospectus in Australia. 

The Rights Issue

RSL is offering shareholders of record on 15 February 2012 a participation in a non-renounceable entitlement issue of one new RSL ordinary share for every RSL share held, at a price of AUD 0.02 per share ("Rights Issue").

The total number of shares in issue at RSL is 56,928,182 and the shares to be offered pursuant to the Rights Issue is 56,928,182 for gross proceeds of AUD 1,138,564.

Red Rock holds 13,984,872 shares in RSL, amounting to 24.57% of the issued share capital, and has undertaken to take up its entitlement under the Rights Issue. Red Rock has to date made advances of approximately this amount to RSL.

In addition Red Rock has agreed to underwrite up to AUD 500,000 of the Rights Issue, for a fee of 2.5% of any underwriting called upon. The maximum potential voting power of Red Rock in RSL at the conclusion of the offer would be 46.52%, were other shareholders not to take up their entitlements under the Rights Issue.

The Rights Issue will close, unless extended, on 6 March 2012.

Further information about the Rights Issue may be found at: http://www.asx.com.au/asx/research/companyInfo.do?by=asxCode&asxCode=rsl

About Resource Star Ltd

RSL is a publicly-listed Australian company whose principal interests are uranium and specialty metals exploration assets in Malawi, the Northern Territory, and Western Australia.

RSL's main projects are the Joint Ventures with Globe Metals and Mining (ASX : GBE)("Globe") on the Livingstonia Uranium Project and Machinga Rare Earths Project in Malawi, the 100%-owned Edith River Uranium Project in the Northern Territory and the Spinifex Joint Venture with Thundelarra Resources (ASX : THX) in Western Australia. The exploration at Livingstonia is managed by RSL, while Globe is running the Machinga programme. RSL has a right to earn-in to 80% of the Livingstonia Project, which has been the subject of over 12,000m drilling and has a JORC compliant Inferred Resource of 7.7 million tonnes averaging 270 ppm U3O8 at a cut-off of 150ppm U3O8.

Reason for the Underwriting

As announced on 24 January 2012, Red Rock has agreed to dispose of its interest in Cue Resources Ltd ("Cue"), a Canadian company with uranium interests in Paraguay, to Uranium Energy Corp., a United States based uranium exploration and production company. As part of the rationalisation of its uranium investment interests, where negative sentiment towards the uranium sector was inhibiting the actions of both Cue and RSL, Red Rock expects to re-invest a proportion of the proceeds of the disposal of Cue into RSL. This will create a stronger company able to explore its portfolio of assets and potentially to look at other opportunities within the mining sector. In addition, the refinancing of RSL may itself improve sentiment towards the company and in potentially increasing its shareholding in RSL at a historically low price Red Rock expects to make a profit.

Enquiries:

Andrew Bell	020 7402 4580 or 07766 474849	Red Rock Resources plc	Chairman
Sandra Spencer	020 7402 4580 or 07757 660 798	Red Rock Resources plc	Public and Investor Relations
Philip Davies/David Porter	020 7444 0800	Religare Capital Markets	Nominated Adviser
Nick Emerson	01483 413500	Simple Investments Ltd	Broker

Forward Looking Statements

This report contains 'forward-looking information' that is based on the Company's expectations, estimates and projections as of the date on which the statements were made. This forward-looking information might include, among other things, statements with respect to the Company's business strategy, plans, objectives, performance, outlook, growth, shareholder value, projections, targets and expectations, Mineral Reserves and Resources, results of exploration and related expenses, property acquisitions, mine development, mine operations, drilling activity, sampling and other data, grade and recovery levels, future production, capital costs, expenditures for environmental matters, life of mine, completion dates, uranium prices, demand for uranium, and currency exchange rates. Generally, this forward-looking information can be identified by the use of forward-looking terminology such as 'outlook', 'anticipate', 'project', 'target', 'likely', 'believe', 'estimate', 'expect', 'intend', 'may', 'would', 'could', 'should', 'scheduled', 'will', 'plan', 'forecast' and similar expressions. Persons reading this report are cautioned that such statements are only predictions, and that the Company's actual future results or performance may be materially different.

Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the Company's actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information. Forward-looking information is developed based on assumptions about such risks, uncertainties and other factors set out herein, including but not limited to the risk factors set out in the Company's Annual Report. This list is not exhaustive of the factors that may affect our forward-looking information. These and other factors should be considered carefully and readers should not place undue reliance on such forward-looking information. The Company disclaims any intent or obligations to update or revise any forward-looking statements whether as a result of new information, estimates or options, future events or results.

 

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