Red Rock Resources Regulatory News (RRR)

1

Purchase and Sale

POW agrees to sell and Red Rock agrees to buy the entire interest of POW in the share capital of NBGC whose principal asset is a 100% holding in RRAL, on the terms and conditions set out below.

RRAL holds 2,517 sq km of granted licences in Westen Australia and a 560 sq km granted licence in South Australia (together with the share capital of RRAL, the "Assets").

2

Consideration

The Consideration for the Purchase is the payment of £1,500,000 in fixed and contingent payments subject to the terms and conditions set out in this HoT and as described in the Payment schedule.

3

Conditions Precedent

The transaction is subject to

(a) approval of the boards of both parties,

(b) shareholder approval by shareholders of Red Rock of the issue of the Initial Share Consideration ("ISC"),

(c) regulatory approval and compliance with the AIM Rules,

(d) completion of due diligence by Red Rock ("Due Diligence"),

(e) Red Rock confirming by the close of Due Diligence that it has access to funding required for the settlement of all amounts due on Completion and for the ongoing financing of NBGC and RRAL; and

(f) the addition to this HoT, or the incorporation with the terms of the HoT in a new contractual document, of any additional terms found to be necessary for the completion and execution of the transaction. 

Condition (a) shall be deemed satisfied upon written notice of approval given by each party;

Condition (b) shall be deemed satisfied upon the passage by the shareholders of Red Rock of a resolution approving the ISC;

Condition (c) shall be deemed satisfied upon the approval by the Nominated Adviser of each Party of RNS publication announcing the terms of this HoT, and relevant approval(s) and/or confirmation(s) by the AIM Regulation team and/or the Seller's Nomad that the Transaction does not constitute 'fundamental change of business' of the Seller as per AIM Rule 15.

Conditions (d) and (e) shall be satisfied on receipt of written confirmation from Red Rock to POW ("Confirmation");

Condition (f) shall be deemed satisfied when each Party confirms in writing that it has no further comment on the terms. 

It is the intention of the Parties that conditions (a), (c), and (f) should be satisfied within 7 days of Confirmation as defined above, and that Red Rock should have called a General Meeting if in the judgment of the Purchaser such meeting is desirable or required to authorise the ISC within that same period.

Should all conditions precedent not be satisfied or agreed in writing by the parties to be waived within 13 weeks of the date of this HoT, the HoT shall be terminated.

4

Completion

Completion shall be effected within five days of the satisfaction of the Conditions Precedent (or, in the case of condition (b), its waiver by POW) by:

(a) POW delivering its shares in NBGC to Red Rock with a signed transfer;

(b) Red Rock delivering the Convertible Loan Notes ("CLNs") to POW;

(c) Red Rock delivering upon their approval the ISC and accompanying warrants to POW.

("Completion" means completion of the Transaction in accordance with this paragraph 4).

5

Payment schedule

(a) Upon Completion, Red Rock will pay POW the CLN consideration, namely £250,000 to be settled by the issue of 250 Convertible Loan Notes of £1,000 which will be convertible to Shares at the price of any placement of new Shares to raise proceeds of over £200,000 gross to be carried out in the six months after their issue ("Placement"), and in the event no Placement occurs to be redeemed by a cash payment on a date six months after Completion;

(b) Upon the approval by shareholders of Red Rock of the ISC, the payment by Red Rock to POW of £250,000 to be settled by the issue of 166,666,667 new Ordinary Shares of Red Rock ("Shares") at a price of 0.15 pence per Share, or cash (at Red Rock's election) and 166,666,667 warrants each exercisable into one Share at a price of 0.25p per Share and exercisable during a period expiring 3 years after the date of their issue;

(c) On the date two months after Completion, the payment by Red Rock to POW of £250,000 in cash;

(d) The payment on each of the three following occasions by Red Rock to POW of £250,000 in cash or, at Red Rock's election, Shares in Red Rock to that value calculated by reference to the last 10 trading days' VWAP (volume-weighted average price), provided that if Shares are issued then accompanying warrants with a three year life and each converting into one Share at a 50% premium to the price of issue of the Shares will also be issued on the basis of one warrant for every two Shares issued:

(1) £250,000 on the date nine months after Completion;

(2) £250,000 on the confirmation by announcement by a regulatory news service or a declaration by a Qualified or Competent person (as those terms are defined in the AIM Rules) of a 20,000 oz gold or gold equivalent JORC Resource according to the JORC 2012 Code from within the boundaries of the current licence area or any future licence renewal(s) of that area or part thereof;

(3) £250,000 on the confirmation by announcement by a regulatory news service or a declaration by a Qualified or Competent person (as those terms are defined in the AIM Rules) of a 200,000 oz gold or gold equivalent JORC Resource according to the JORC 2012 Code from within the boundaries of the current licence area or any future licence renewals of that area or part thereof.

6

Other Terms

The transaction will be subject to the following additional terms:

(a) Royalties: POW will retain the royalty interests namely a 0.75% GPR over the RRAL licence interests held as at the date of execution of this HoT or any current licence area renewed or the subject of a future disposal;

(b) Performance Guarantee: Red Rock undertakes that for the next 12 months from the date of this HoT it will ensure:

(1) That RRAL retains the licences containing the old Berringa and Ajax mines in Victoria, Australia in good standing, subject to any requirement to surrender a portion of any licence upon the second or later anniversary of its grant;

(2) That where any licence expenditure and other commitments will not be satisfied and a reduced expenditure has not been agreed, or where licences (other than any situate in Western Australia) are to be surrendered (other than pursuant to 6(b)(2) above), POW will be given 3 months' notice of same by Red Rock prior to licence expiry and the option to acquire each such interest for A$1;

(3) That if Red Rock does not make any Consideration payments under 5 above within 3 business days of the due date, a Default may be declared by POW in writing to Red Rock, in which case interest will be charged at 2% per month or part thereof and Red Rock must cure the Default within 60 days, after which, provided the delay is not due to any event of force majeure, POW may reacquire its original 49.9% NBGC issued share capital for A$1 and a five year Note for an amount equivalent to any cash Consideration paid up to that date (and any cost incurred in licensing a small area of State land within EL007328);

(4) That no significant exploration interests of or controlling interest in Red Rock's group in Australia should be transferred out or disposed of or agreed to be so transferred or disposed by Red Rock to another Party without an opportunity being given to POW to match the terms offered by such other Party; and

(5) Should Red Rock dispose of any of the interests currently held by NBGC / RRAL within 12 months 15% of disposal proceeds after agreed costs will be payable to POW, or 5% in months 13-24.

(6) So long as any of the payments set out in 5(a) to (c), and 5(d)(1) remain outstanding, any disposal under 6(b)(5) above shall be subject to prior written agreement of POW, such consent not to be unreasonably withheld. 

(7) The obligations of Red Rock under 5(d)(2) and (3) shall not be extinguished by any disposal under 6(b)(5) above, except with the written agreement of POW.

(c) Aggregate Consideration:  The Parties agree that the aggregate consideration payable to the Seller pursuant to this HoT shall not exceed 74.9% of the market capitalisation of the Seller as at the date of this HoT, using the mid-market closing price of ordinary shares of the Seller on the trading day immediately prior to the date of this HoT.

(d) Other

(1) Unless otherwise agreed by the Parties, Due Diligence will be completed by Friday 19th April 2024.

(2) From the date of execution of this HoT or the Long Stop Date, whichever shall be sooner, until Completion, each Party will contribute A$20,000 per month towards the costs of RRAL, with any further costs to that date being met by Red Rock.

7

Warranties

Each Party represents and warrants that:

(a) incorporation: it is a corporation incorporated (or taken to be incorporated) or registered and validly existing under laws of the jurisdiction in which it is domiciled.

(b) corporate power: it has the corporate power to own its assets and to carry on its business as it is now being conducted.

(c) authority: it has, other than as noted in this HoT, full power and authority to enter into and perform its obligations under this agreement.

(d) authorisations: it has taken or will take all necessary action to authorise the execution, delivery and performance of this agreement in accordance with its terms; and

(e) binding obligations: this HoT constitutes legal, valid and binding obligations and, subject to any necessary stamping and registration, is enforceable in accordance with its terms (subject to laws generally affecting creditors rights and to principles of equity); and

POW warrants:

(f) Legal and beneficial owner; POW is the recognised legal and beneficial owner of the NBGC shares sold and no other Party has any claim or interest in them whatsoever.

8

Terms Binding

Upon fulfilment of the Conditions, this HoT will be legally binding on the Parties, but if requested by either Party, the Parties agree to enter into a formal sale and purchase agreement to more fully document the terms of the Transaction

Licence Number

Project Name

Area (km2)

EL007271

Buninyong

133

EL007281

Blue Chip

74

EL007282

Blue Sky

489

EL007285

Blue Ribbon

8

EL007327

Dereel

60

EL007385

Sardinia

4

EL007329

Kilmore

484

EL007301

Pitfield/Mt. Bute

85

EL007328

Blue Yonder

164

State land within EL007271

EL007505

EL007506

EL007507

-

[9]

[9]

[8]

EL007460

Kilmore West

325

EL007330

Daylesford

202

EL007294

Talbot

129

EL005535

Berringa

9 (228 net ha)

EL007756

Monmouth

22

State land within EL007327

EL007799

Dereel (2)

[3]

EL007826

Ballarat East

4

EL007460

Kilmore West

325

ELA2023/00017 (SA)

Upalinna

560

EL007540

(3 competing applications)

Outer Ballarat

142