Red Rock Resources Regulatory News (RRR)

Red Rock Resources Plc

("Red Rock" or the "Company")

Placement of Shares and Equity Swap

20 August 2012

Red Rock Resources plc, the mining and exploration company with an iron ore project in Greenland, a producing gold mine in Colombia, advanced gold and copper exploration in Kenya, and interests in steel feed, uranium and rare earths, is pleased to that it has entered into new funding arrangements. The new funds will be used towards closing out the drilling season in Greenland to include demobilization and assessment work required to achieve the targeted Mineral Resource Estimate, as well as assisting the Company in meeting debt repayments and for working capital.

Red Rock has entered into a subscription agreement with YA Global Master SPV, Ltd ("YAGM"), whereby 37,500,000 ordinary shares in the Company ("Shares") were subscribed for at a price of £0.02 per Share for a total cash consideration of £750,500 ("the Placement").

Separately, YAGM and Red Rock have entered into an equity swap agreement (the "Equity Swap") over a notional 37,500,000 shares in the Company (this does not involve the issue of new Shares). Under the terms of the Equity Swap upon each of six monthly settlement dates the prevailing market price of the Company's Shares, discounted by 10%, will be compared to a benchmark price of £0.02 per Share (the "Benchmark Price").

- If the discounted market price exceeds the Benchmark Price then a payment is made to Red Rock by YAGM, with the overall payment depending on the amount by which the discounted market price exceeds the Benchmark Price.

- If the discounted market price is less than the Benchmark Price then Red Rock will owe a payment to YAGM, with the size of such payment depending on the amount by which the discounted market price falls short of the Benchmark Price.

In order to satisfy any such payments under the Equity Swap, Red Rock has deposited £625,000 in an escrow account. A portion of the escrowed funds will be released to Red Rock on each monthly settlement date after first, deducting any payments that may be owed to YAGM.

Commitment fees payable by Red Rock under the Equity Swap comprise in aggregate, £75,000 payable in two equal tranches which may be satisfied in cash or Shares in the Company at Red Rock's discretion. The Company has elected for the first payment of £37,500 to be made in the form of 1,875,000 Shares. The second payment will be paid on the earlier of six months from the date of the Equity Swap or the termination of the Equity Swap.

The Company has given YAGM customary warranties in respect of the subscription and under the Equity Swap and an indemnity under the Equity Swap. YAGM may elect to terminate the Equity Swap and accelerate the payments due under it in certain circumstances. YAGM has agreed that it and its affiliates will refrain from holding any net short position until the termination of the Equity Swap.

Andrew Bell, Red Rock's Chairman and Chief Executive, commented:

Access to capital is essential for an exploration firm and we are pleased to secure this new source of funds. This Placement and Equity Swap assist Red Rock in meeting its short-term exploration funding and working capital requirements as we work on other transactions that we expect to add long-term value to the Company.

Application will be made for the 39,375,000 new Shares to be admitted to trading on AIM and this is expected to become effective on 24 Aug 2012. 

Following the issue of these Shares, YAGM will be interested in 39,375,000 Shares in the Company, representing 4.25% of the issued share capital.

Following the issue of the new shares, the Company will have 927,314,272 ordinary shares in issue with each share carrying the right to one vote. There are no shares held in treasury. The total number of voting rights in the Company is therefore 927,314,272 and this figure may be used by shareholders as the denominator for the calculations by which they determine if they are required to notify their interest in, or a change to their interest in, the Company under the Disclosure and Transparency Rules.

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