Red Mile Capital Corp.
TSX VENTURE : RDM.P

January 29, 2010 15:18 ET

Red Mile Capital Corp. Announces Completion of Qualifying Transaction

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 29, 2010) - Red Mile Capital Corp. (the "Corporation") (TSX VENTURE:RDM.P) announces that it has completed the arm's length acquisition (the "Acquisition") from Russet Lake Resources Inc. ("Russet Lake") of all of Russet Lake's interest in the option (the "Option") to acquire a 100% interest in the Blue Quartz Property, Beatty Township, Ontario (the "Property"), subject to net smelter return royalties totalling 2.5% (the "NSR"), previously announced by Red Mile in its Press Release dated June 25, 2009. The Option is held under an option agreement between Russet Lake and Thundermin Resources Inc. and Wesdome Gold Mines Ltd. (the "Optionors") dated September 1, 2008 (the "Option Agreement"). Pursuant to the terms of an Assignment and Assumption Agreement dated August 25, 2009, as amended November 27, 2009, (the "Acquisition Agreement") between Red Mile, Russet Lake and the Optionors, Red Mile issued 3,505,000 of its Common Shares to Russet Lake and acquired, by assignment and assumption of remaining obligations, all of Russet Lake's interest in the Option Agreement. Accordingly, Red Mile now holds the Option to acquire a 100% interest in the Property, subject to the NSR. Under the terms of the Acquisition Agreement, the 3,505,000 Common Shares were issued to Russet Lake at a deemed price of $0.05 per Common Share for an aggregate deemed acquisition value of $175,250 and are subject to Escrow Restrictions as imposed by the TSX Venture Exchange (the "Exchange") and to hold periods expiring May 30, 2010.

Pursuant to the terms of the Acquisition Agreement, Russet Lake's remaining obligations under the Option Agreement that have been assumed by Red Mile include, in addition to those related to area of interest provisions, the NSR (up to an aggregate 0.5% of which can be bought down for $500,000), and possible repayment of certain exploration and development expenditures out of net profits from operations on the Property if brought into production, in respect of which Red Mile is to be indemnified by Russet Lake for any amount Red Mile is required to repay in excess of $1 million, the following in order to exercise the Option:

  1. paying $20,000 and issuing 50,000 Red Mile Common Shares to the Optionors on or before September 1, 2009, which cash payment has been made with funds advanced by Red Mile and which share issuance has been deferred by the Optionors until the Acquisition closes;
  2. paying $20,000 and issuing 100,000 Red Mile Common Shares to the Optionors and completing $150,000 in work expenditures in respect of the Property on or before September 1, 2010; and
  3. paying $20,000 and issuing 100,000 Red Mile Common Shares to the Optionors and completing $250,000 in work expenditures in respect of the Property on or before September 1, 2011.

Red Mile is a capital pool company and intends for the Acquisition to constitute its "Qualifying Transaction" as such term is defined in the policies of the Exchange. Red Mile now intends to file all necessary final documents with the Exchange to obtain final approval of the Qualifying Transaction.

Having completed the Acquisition, Red Mile will be engaged in the business of exploring for, with the ultimate goal of developing and producing, precious metals from the Property and such other properties and interests as may be subsequently acquired by Red Mile.

For further information regarding the details of the Acquisition, please refer to Red Mile's filing statement dated December 1, 2009, which is available on SEDAR at www.sedar.com.

Upon completion of the Acquisition, Red Mile has 9,705,000 Common Shares issued and outstanding, not including the 50,000 Common Shares to be issued to the Optionors pursuant to the Option Agreement nor shares that may be issuable upon exercise of outstanding options.

It is anticipated that the shares of Red Mile will resume trading on the Exchange under the symbol "RDM" shortly after the Exchange issues its final approval of the Acquisition.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the Qualifying Transaction and has neither approved nor disapproved the contents of this press release.

The Corporation's Common Shares are currently halted from trading in accordance with the policies of the Exchange.

On behalf of the Board of Red Mile Capital Corp.

Larry Whitehead, President and CEO

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.

Contact Information

  • Red Mile Capital Corp.
    Larry Whitehead
    President and CEO
    1-604-542-2223