Red Rock Energy Inc.
TSX VENTURE : RRK

Red Rock Energy Inc.

November 28, 2008 08:00 ET

Red Rock Agrees to Purchase Additional Properties at Uranium City

CALGARY, ALBERTA--(Marketwire - Nov. 28, 2008) - Red Rock Energy Inc. (TSX VENTURE:RRK) ("Red Rock") announced today that it has entered an agreement with Uranium City Resources Inc. ("UCR") in which Red Rock has agreed to purchase all of UCR's exploration property claims located in northern Saskatchewan (the "Claims").

UCR is a junior exploration corporation with property interests in northern Saskatchewan, many of which are near or adjacent to the main property blocks held by Red Rock in the Uranium City camp. The purchase price for the Claims is $975,000 and will be paid by Red Rock on the following basis:

- $75,000 to be paid to UCR in cash upon completion of the transaction (the "Transaction"); and

- $900,000 to be paid to UCR at the option of Red Rock in cash or by the issuance of 5 million common shares of Red Rock from treasury at a deemed price of $0.18 per common share.

The Claims are subject to an option agreement between UCR and GLR Resources Inc. ("GLR"), made as of November 22, 2004, under which GLR has a preemptive right to purchase the Claims on the same terms and conditions as those proposed by Red Rock. Completion of the Transaction is conditional on the receipt from GLR of a written waiver of its preemptive right. The parties' obligations to complete the Transaction are also subject to the satisfaction of the usual conditions for transactions of this nature, including the receipt of all regulatory approvals, shareholder approval, and the completion of a satisfactory due diligence review by Red Rock. No finder's fee will be payable in connection with the Transaction.

In discussing this transaction, Sandy Loutitt, President of Red Rock, stated: "There are a number of obvious and natural synergies which make this a very positive transaction for Red Rock. The proximity of many of UCR's properties to the existing Red Rock properties is particularly beneficial. When completed, this transaction will effectively consolidate most of the Uranium City camp under Red Rock's control and accordingly will increase both the operational efficiencies we have achieved there and the potential for continuing discoveries of recoverable uranium."

Red Rock management continues to be encouraged by the results obtained to date from 2008 drilling, with positive uranium drill intercepts being present at both the Fusion Zone, where Red Rock Energy is working on a resource definition program, and at the newly discovered River Zone. The intersections found to date on the River Zone represent possible extensions of former production faults mined as late as 1979.

READER ADVISORY

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.

The reader is further cautioned that the preparation of financial statements in accordance with generally accepted accounting principles requires management to make certain judgements and estimates that affect the reported amounts of assets, liabilities, revenues and expenses. Estimating reserves is also critical to several accounting estimates and requires judgments and decisions based upon available geological, geophysical, engineering and economic data. These estimates may change, having either a negative or positive effect on net earnings as further information becomes available, and as the economic environment changes.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Red Rock Energy Inc.
    Sandy Loutitt
    President
    (403) 685-1047
    or
    Red Rock Energy Inc.
    Lara Cull
    Operations Manager
    (403) 685-1047
    Website: www.redrockenergy.ca