Reliance Resources Announces Expansion of
its Iron Exploration and Development Business Model, Interim Private
Placement of $200,000, and Provides Shareholder Update
MINNEAPOLIS,
July 3, 2014
/CNW/ - Reliance Resources Limited (TSXV: RI) ("Reliance") or ("the
Company") is pleased to announce an expansion to its iron exploration
and development business activities and a related interim private
placement, as well as to provide this shareholder update.
Application submitted to lease 24 additional iron properties.
The Company has recently submitted to the Minnesota Department of
Natural Resources ("DNR") applications to lease an additional 24 iron
stockpile and tailings properties (the "properties") in the vicinity of
Hibbing, Minnesota.
Terms for leases on the properties have been negotiated between the
Company and the DNR, and execution of the leases is expected within one
week. A Technical Report on Form NI 43-101 has been completed by a
Qualified Person retained by the Company on three of the first property
areas. Additional Technical Reports will be prepared on many of the
other properties during the next few months.
In addition, the Company is negotiating for the services of the
Natural Resource Research Institute ("NRRI"), a department of the
University of Minnesota at Duluth, at its metallurgical and laboratory facilities at
Coleraine, Minnesota,
and for its cooperation and assistance in the evaluation of the
processing technologies that could potentially be used in the properties
in the future.
Interim private placement, roll back of shares on a five for one basis, and lifting of the trading halt.
The Company also announced on
April 7 a
pending five for one consolidation of its common shares. The Company
has filed the necessary forms with the TSX Venture Exchange for the
consolidation of the Company's common shares on a five for one basis as
previously announced and for the lifting of the trading halt.
Completion of these matters is now awaiting final approval by the
Exchange.
The Company is pleased to announce that it has also filed for conditional approval of an interim private placement financing of
$200,000.
Proceeds from this financing will be used to finance the acquisition of
leases on the properties, preparation of Technical Reports on Form
43-101, systematic sampling and assaying, and ongoing metallurgical test
work, as well as administrative and general costs and expenses of the
Company, pending the closing of the acquisition transaction. The issue
price of the private placement will be the greater of
$0.05
per share, on a post-consolidation basis, or the 5-day volume weighted
average price of the Company's shares in the market for the 5-day period
immediately following the lifting of the trading halt. The interim
financing will carry a full warrant at an exercise price equal to the
issue price, exercisable over a 12-month period following closing of the
financing.
Update on Indonesian property rights – Kapa-Kapa and Roko properties
The Company recently received letters from an Indonesian law firm representing PT. Hibualamo Jaya ("Jaya") dated
March 24, 2014 and
April 2, 2014
(the "letters") purporting to inform the Company that the Joint
Cooperation for the Exploration and Exploitation of Precious Metal (the
"agreement") dated
January 14, 2008
between Jaya and the Company's wholly-owned subsidiary, PT Champion
Halmahera Mining, does not have force. The agreement relates to the the
Kapa-Kapa and Roko properties (the "properties") in
Indonesia. The letters further informed the Company of a decision by the District Court of
Central Jakarta, dated
May 21, 2013,
purporting to declare that the agreement 'does not have force' as it
concerns the properties. The court decision appears to have been the
result of an ex parte proceeding in which the Company was not present to
represent its rights and interests.
The Company is reviewing the decision of the court and believes it is
improper and invalid. The Company is commencing a counter suit in the
Jakarta courts to have the court decision annulled. The Company will vigorously pursue its rights in this matter.
While Reliance is working to complete the acquisition transaction, it
is also actively investigating options to obtain maximum benefit from
its existing Indonesian assets. Shareholders will be notified at an
appropriate time on the outcome of these efforts.
On behalf of the Board of Directors of Reliance
George S. Young
Chairman, CEO and Director
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of this
release.
Forward-Looking Information
This news release contains "forward-looking information" and
"forward-looking statements" (collectively, "forward-looking
information") within the meaning of applicable securities laws.
Forward-looking information is generally identifiable by use of the
words "believes," "may," "plans," "will," "anticipates," "intends,"
"could", "estimates", "expects", "forecasts", "projects" and similar
expressions, and the negative of such expressions. Forward-looking
information in this news release include statements about the proposed
Transaction, proposed management restructuring, American Iron's proposed
acquisition of its Mineral Properties and the Company's future plans,
objectives and business strategy.
In connection with the forward-looking information contained in
this news release, the Company has made numerous assumptions, regarding,
among other things, the assumption that the parties will complete the
principal conditions for completion of the Transaction, including but
not limited to the Company's completion of the Financing and
acquisition of the Mineral Properties; the receipt of necessary
shareholder and regulatory approvals; and the assumption the Company
will continue as a going concern and will continue to be able to access
the capital required to advance its projects and continue operations.
While the Company considers these assumptions to be reasonable, these
assumptions are inherently subject to significant uncertainties and
contingencies. In addition, there are known and unknown risk factors
which could cause the Company's actual results, performance or
achievements to be materially different from any future results,
performance or achievements expressed or implied by the forward-looking
information contained herein. Known risk factors include, among others:
the inability of American Iron to acquire the Mineral Properties; the
possibility that the Financing will not be completed; and the
possibility that the Company may not be able to continue as a going
concern in the near term.
All forward-looking information herein is qualified in its
entirety by this cautionary statement, and the Company disclaims any
obligation to revise or update any such forward-looking information or
to publicly announce the result of any revisions to any of the
forward-looking information contained herein to reflect future results,
events or developments, except as required by law.
SOURCE Reliance Resources Ltd.
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