Last checked at 30 Jun 2015 13:10
Red Rock Resources plc
("Red Rock" or the "Company")
Update on Resource Star Ltd
30 June 2015
Red Rock Resources plc, the mining and exploration company with interests in gold in Africa and investments in other mineral assets, announces, further to its announcement of 23 April 2015, that its Australian associate, Resource Star Limited (ASX:RSL)("RSL"), a company with historic interests in uranium exploration in Africa and Australia, has terminated the agreement under which it had the right to acquire a further 45% interest in Sugar Dragon Ltd ("Sugar Dragon"), indirect holder of an exclusive license to produce and distribute Candy Crush branded confectionery in Greater China.
RSL announced the termination to the Australian Stock Exchange ("ASX") today. A summary of the background and of the RSL announcement follows:
Summary
· RSL had conditionally agreed to acquire a 60% interest in a holding company, Sugar Dragon Limited which owns a 72.5% interest in Okmno Asia, a leading manufacturing and distribution company with operations in Greater China.
· Okmno Asia Limited is the holder of a license to produce and distribute Candy Crush branded confectionery in the Greater China region.
· An AUD 300,000 refundable deposit and AUD 200,000 convertible loan were paid by RSL to Sugar Dragon, and these will now convert into 7,692,307 fully paid ordinary shares of Sugar Dragon at the conversion price of AUD 0.065 per share, providing RSL with a 15% equity position in Sugar Dragon, which it intends to retain.
· RSL has now terminated the agreement to acquire an additional 45% interest in Sugar Dragon.
The decision to terminate the option to acquire a further 45% of Sugar Dragon was driven by RSL's recognition, as it consulted and received feedback from the investment community, that the indirect holding structure of the Sugar Dragon assets might not achieve the optimal valuation for the business and was therefore not in the interests of either party.
Sugar Dragon has, with the full support of RSL, advised of its intention to seek a listing on the Australian Stock Exchange via an Initial Public Offering later this year and has appointed Merchant Capital Markets as lead manager for the offering.
The full text of the announcement may be found at: http://search.asx.com.au/s/search.html?query=rsl+options&collection=asx-meta&profile=web
Andrew Bell, Chairman, states: "The operations of Sugar Dragon appear to be performing satisfactorily and RSL believes that its 15% interest will prove a good investment. An early IPO will be the preferred outcome with the object of establishing a stand-alone valuation for the Sugar Dragon business. In addition to its existing mineral interests, RSL will continue reviewing further investment opportunities that may add value, always however controlling its risk exposure."
Holding of Red Rock in RSL
The Company currently holds 65,335,134 shares in RSL (amounting to 11.03% of the issued share capital), as well as 5,213,290 options exercisable up to 31st March 2016 at a price of AUD0.004 per RSL share. As at close of business on 29th June 2015 the market value of the RSL shares and options owned was AUD402,436.
For further information, please contact:
Andrew Bell 0207 747 9990 or 0776 647 4849 Chairman Red Rock Resources Plc
Roland Cornish/ Rosalind Hill Abrahams 0207 628 3396 NOMAD Beaumont Cornish Limited
Jason Robertson 0129 351 7744 Broker Dowgate Capital Stockbrokers Ltd
Christian Pickel 0203 128 8208 Media Relations MHP Communications