Business
Funding and Co-Operation Agre
Funding and Co-Operation Agre.
About this update from Red Rock Resources Plc
[{"type":"text","content":"\n RNS Number : 4014N Red Rock Resources plc 10 June 2010 \n \n\nRED ROCK RESOURCES PLC\nFunding and Co-Operation Agreement, Colombia\n \nDated: 10 June 2010\nRed Rock Resources plc (\"Red Rock\" or the \"Company\") the mining exploration and mineral investment company with interests in steel feed, uranium and gold, announces that it has entered into a Funding and Co-operation Agreement (the \"Agreement\") with Mineras Four Points SA (\"MFP\"), a company incorporated in the Republic of Colombia, and with Juan Camilo Florez Ramirez (\"JCF\"), a Colombian citizen and the General Director of MFP.\nLoan\nUnder the terms of the Agreement, Red Rock will procure that a funding institution lends MFP a loan of two million U.S. dollars, of which one million dollars is to be lent immediately and one million dollars is to be lent in two equal instalments, with each additional drawdown to be made at the request of an Operating Committee which is to be established under the Agreement (the \"Loan\"). It is expected that these further instalments will be drawn down within three months. \nThe Loan will carry interest at 5% per annum on the average outstanding amount and will be repayable on 30 June 2013. The purpose of the Loan is to enable MFP to invest in production and mining equipment at two gold mines over which it has exploration and mining rights in the province of Antioquia, Colombia.\nThe Loan and interest payments are to be guaranteed by RRR by way of a back to back loan which is expected to be formalised shortly. In consideration of the obligations assumed by Red Rock under the Loan guarantee, Red Rock has been granted charges over the gold production of MFP and over the existing issued share capital of MFP. \nConsultancy and Technical Advice\nUnder the Agreement Red Rock will also provide a minimum of 20 days per month of consultancy and technical support to MFP and provide a qualified representative for the Operating Committee. For this it will charge fees totalling U.S.$ 2.96 million over the period from 1 September 2010 until 30 June 2013 payable quarterly in arrears in increments rising from an initial U.S.$200,000 per quarter to U.S.$350,000 per quarter.\n Other Terms of the Agreement\nRed Rock will also have options (a) exercisable for two years to acquire 50% of the issued share capi...