CALGARY, ALBERTA--(Marketwire - March 22, 2012) - Red Rock Energy Inc. (TSX VENTURE:RRK) ("Red Rock" or the "Corporation") announced today that the Board of Directors of the Corporation intends to investigate the procurement of a joint venture partner or to otherwise determine whether a disposition can be negotiated in respect of the Corporation's uranium exploration interests in Northern Saskatchewan. To that end, Red Rock has retained the services of Probity Capital Advisors Inc. ("Probity"), a Calgary-based financial advisory firm specializing in merger, acquisition and divestiture services for mid-market resource corporations.
With the assistance of Probity, Red Rock management will evaluate strategic alternatives which may include, but are not limited to: a private placement or other offering of equity or debt, the saleof a material portion or all of the uranium exploration assets of the Corporation; or a farm-out or joint venture focused strictly on those assets. The Uranium City assets include a land position of 60,581 hectares in a region with historical production of 77 million pounds of uranium at an average grade of .25%. The total confirmed resource in place as determined by Red Rock exploration activities is 3.89 million pounds, with significant historical resources estimated to be within a short distance of the new Redox discovery zone.
The Corporation has not established a definitive timeline to complete this activity, but it has executed a retainer agreement with Probity. No decision on any particular alternative has been reached at this time. There can be no assurance that the process will result in a transaction of any form or, if a transaction is undertaken, as to its terms or timing. The Corporation does not intend to make any further announcements regarding the process unless and until the Board has approved a specific transaction or other course of action or otherwise deems disclosure of developments is appropriate. The Corporation intends to continue to pursue its present business plan during this period which is to exploit its oil and gas properties in Northeastern British Columbia. These activities include re-entries, new drilling and tie-in operations on its lease operatorship in the Caribou area.
In discussing the Board's decision to take this action, Sandy Loutitt, President of Red Rock, commented: "While we recognize that the Uranium City properties have represented a key element to the business strategy of Red Rock in the past, the strong opportunities presented to us by our oil and gas development team, has encouraged us to consider the possible disposition of these assets."
Statements in this press release may contain forward-looking information including expectations of future production, operating costs, commodity prices, administrative costs, commodity price risk management activity, acquisitions and dispositions, capital spending, access to credit facilities, income taxes, regulatory changes, and other components of cash flow and earnings. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the company. These risks include, but are not limited to, the risks associated with the mining industry, commodity prices and exchange rate changes. Industry related risks could include, but are not limited to, operational risks in exploration, development and production, delays or changes in plans, risks associated to the uncertainty of reserve estimates, health and safety risks and the uncertainty of estimates and projections of production, costs and expenses. The reader is cautioned not to place undue reliance on this forward-looking information.
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