Business
Acquisition
Acquisition.
About this update from Red Rock Resources Plc
[{"type":"text","content":"\n \n\n\n\n\n\nRNS Number : 5405C Red Rock Resources plc 08 March 2011 \n \n\nRED ROCK RESOURCES PLC\nColombia Acquisition\n \nDated: 8 March 2011\n \nFurther to the update released on 15 February 2011, Red Rock Resources plc (\"Red Rock\" or the \"Company\"), the gold mining and exploration company with projects in Kenya and Colombia, and interests in steel feed, uranium, and rare earths is pleased to announce the exercise of its options over 51 per cent. of the issued share capital of its partner Mineras Four Points SA (\"MFP\"), at a reduced initial cost, with remaining payments related to the achievement of key targets.\n \nUnder a share purchase agreement entered into on 4 March 2011 between the Company, Juan Camilo Florez Ramirez and Andres Felipe Florez Valderrama (together, the \"Vendors\"), the Company has agreed to acquire 25,500 shares of the total 50,000 issued shares of MFP for a total cash consideration of up to US$7,500,000, of which an initial US$5,502,000 (the \"Initial Consideration\") has been paid or is payable on completion of a loan guarantee by the Vendors, with US$1,000,000 deferred until MFP has an average ore production of 150 tonnes per day for a continuous 90 day period and a further $998,000 payable only when MFP achieves a net operating profit of US$10,000,000 in one year. The MFP shares have been acquired through the acquisition of the entire issued share capital of American Gold Mines Limited (\"AGM\"), a newly incorporated Cayman Islands company whose only asset is its holding of MFP shares and which, save for its acquisition of the MFP shares, has never traded.\n \nRed Rock entered into a Funding and Co-operation Agreement (the \"Agreement\") with MFP, a company incorporated in the Republic of Colombia, in June 2010 under which it has lent MFP US$2,000,000 at 5% per annum and provides consultancy services for fees totalling US$2.96 million over the period from 1 September 2010 until 30 June 2013 payable quarterly in arrears in increments rising from an initial US$200,000 per quarter to US$350,000 per quarter. In addition, Red Rock is entitled to payments in relation to profits during each accounting period covered by this period of 15% of EBITDA, less amounts paid in interest and fees for that accounting period. MFP has exploration and mining rights over the...