Investment in Cue Resources L

RNS Number : 7847B

Red Rock Resources plc

02 November 2009

 



RED ROCK RESOURCES PLC

Investment in Cue Resources Ltd

Dated: 2 November 2009

Red Rock Resources plc ("Red Rock" or the "Company") the mineral exploration and development company focused on advancing iron ore, manganese and uranium projects in Australia and East Africa, announces that the Company has subscribed for 9,898,000 Units in Cue Resources Ltd ("Cue"), at a price of CAD 0.10 per Unit ("Subscription"), an aggregate consideration of CAD 989,800 (approximately £565,000) . Each Unit consists of one common share ("Share") and one warrant entitling the holder to subscribe for one additional Share at CAD 0.15 for two years from 1 November 2009 ("Warrant"). The Shares and Warrants are subject to a four month hold period. The Warrants will contain an acceleration provision which will provide for the mandatory exercise or lapse of the Warrants in the event the Shares trade at a price of over CAD 0.30 for a period greater than 20 trading days.

Following the Subscription, and an earlier subscription by third party investors, which together have raised CAD 2,383,312 before expenses, Cue will have 62,732,105 Shares in issue, and the Company will hold 15.78 per cent of the issued capital, as enlarged by the subscriptions. 

Cue is a company incorporated in Canada and listed on the TSX Venture Exchange, where it trades under the symbol CUE. The principal asset of Cue is 100% of the 230,000 hectareYuty uranium project in Paraguay. The defined mineralisation is interpreted to be a sandstone-hosted roll-front uranium deposit, and the Yuty license is interpreted to contain 130 km of a regional redox front with multiple uranium targets. One of these, San Antonio, has seen significant exploration, first by the Anschutz/Korea Electric Power/Taiwan Electric Power joint venture in 1976 to 1983, when 266 holes were drilled regionally, and latterly by the Cue/Cameco joint venture who drilled 234 holes between 2007 and 2009. The joint venture with Cameco was terminated by mutual agreement earlier in 2009. Cue has NI 43-101 compliant Resources at San Antonio, comprising an Indicated Resource of 8.3m lbs at 420 ppm U3O8 and an Inferred Resource of 1.2m lbs at 500 ppm U3O8. Further drilling, to expand the resource base at San Antonio and to define new prospects at other identified zones, is planned. Initial leaching, permeability and porosity testwork for in situ recovery have been carried out, with indications that the deposit is suitable for in situ recovery with what seem to be suitable impermeable horizons above and below the ore zone. Initial leaching, permeability and porosity testwork have been carried out and are regarded by Cue as encouraging. In the year ended 2 May 2009, Cue had a net loss of CAD 1.3m.

At the close of business on 28 October 2009, the Shares of Cue were trading at CAD 0.09 per Share. 

The consideration for the Subscription is being settled in cash, and has been financed from existing cash resources of the Company and from a SEDA-backed loan facility from YA Global Master SPV Limited, which is advised by Yorkville Advisors, LLC. The Company considers this a strategic opportunity to enhance its uranium portfolio at minimal cost by investment in good quality uranium assets with an established Resource and significant upside, in a country with sound infrastructure and a positive attitude towards mining.

Enquiries:

Red Rock Resources plc
Andrew Bell, Chairman	0207 402 4580 07766 474849
John Watkins	07768 512404
Nominated Adviser
Blomfield Corporate Finance Ltd
Peter Trevelyan-Clark/ Ben Jeynes	020 7444 0800
Broker
Simple Investments Ltd
Nick Emerson	01483 413500
Public Relations
Lothbury Financial Limited
Ron Marshman John Greenhalgh	020 7011 9411

Updates on the Company's activities are regularly posted on its website, www.rrrplc.com.

 

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