Red Rock Resources Makes Funding Deal With Colombian Company

10th Jun 2010 12:14

LONDON (Dow Jones)--Red Rock Resources PLC (RRR.LN), a mining exploration and mineral investment company said Thursday it has entered into a Funding and Co-operation Agreement with Mineras Four Points SA, or MFP, a company incorporated in Colombia, and with Juan Camilo Florez Ramirez, a Colombian citizen and the General Director of MFP. MAIN FACTS: -Under the terms of the Agreement, Red Rock will procure that a funding institution lends MFP a loan of two million dollars, of which one million dollars is to be lent immediately and one million dollars is to be lent in two equal installments. -Loan will carry interest at 5% per annum on the average outstanding amount and will be repayable on June 30, 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. -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. -Under 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 $2.96 million over the period from Sept.1 2010 until June 30 -Red Rock will also have options exercisable for two years to acquire 50% of the issued share capital of MFP for $6,500,000 and exercisable for three years to acquire 1% of the issued capital of MFP for $1,000,000 -Shares at 1110 GMT flat at 1.68 pence. -By Tommy Stubbington, Dow Jones Newswires; 44-20-7842-9268; [email protected] (END) Dow Jones Newswires June 10, 2010 07:14 ET (11:14 GMT)