Century Iron Ore Corporation

May 19, 2011 22:27 ET

Century Iron Ore Corporation: News Release

TORONTO, ONTARIO--(Marketwire - May 19, 2011) -


Century Iron Ore Corporation (TSX VENTURE:FER) (the "Century NL") announced that on May 18, 2011 it acquired 49,882,078 common shares (the "Shares") of Century Iron Mines Corporation (formerly Red Rock Capital Corp.) (the "Company"), constituting approximately 53.7% of the issued and outstanding shares of the Company. Century NL is a private company controlled by Mr. David (Ben Koon) Wong, Mr. Sandy Chim, Mr. Hua Bai and Mr. Patrick Li (collectively, the "Century Principals").

The Shares were issued to Century NL upon the completion by the Company of its acquisition of Century Iron Ore Holdings Inc. ("Century Holdings") through an amalgamation completed on May 18, 2011. The Shares were issued to Century NL in exchange for 58,180,000 common shares of Century Holdings held by Century NL prior to the completion of the Amalgamation. The acquisition of Century Holdings by way of completion of the Amalgamation and related concurrent financing transactions constituted the Qualifying Transaction of the Company under the policies of the TSX Venture Exchange. The Qualifying Transaction closed on May 18, 2011. Each of the Century Principals has been appointed as a director of the Company upon the completion of the Qualifying Transaction. The Shares were acquired for investment purposes. Century NL may increase or decrease its beneficial ownership of the Company's securities depending on future economic or market conditions.

Century NL has entered into a Tier 1 value escrow agreement in respect of the Shares in accordance with the policies of the TSX Venture Exchange (the "Escrow Agreement"). Under the Escrow Agreement, 25% of the Shares will be released from escrow upon issuance by the TSX Venture Exchange of its bulletin with respect to the completion of the Qualifying Transaction (the "Bulletin"), 25% will be released 6 months from the date of the Bulletin, 25% will be released 12 months from the date of the Bulletin and the final 25% will be released 18 months from the date of the Bulletin.

In connection with the private placement purchase of common shares of the Company (the "WISCO Private Placement") completed by WISCO International Resources Development & Investment Limited ("WISCO") pursuant to an amended and restated subscription agreement dated February 21, 2011 among WISCO, Century Holdings and the Company (the "WISCO Subscription Agreement"), Century NL entered into a shareholders' agreement dated May 6, 2011 (the "WISCO Shareholders' Agreement") with WISCO and the Principal Shareholders. The WISCO Shareholders Agreement became effective upon completion of the Qualifying Transaction and includes the following material provisions:

  • the agreement by Century NL and the Century Principals (subject to their fiduciary duties) to vote the Shares to give effect to the rights granted to WISCO under the WISCO Shareholders Agreement and under the investment agreement entered into between the Company and WISCO in connection with the WISCO Private Placement (the "WISCO Investment Agreement"), including the election of nominees of WISCO to the Company's board of directors;

  • the agreement of Century NL and WISCO, subject to applicable securities laws and Exchange policies, to discuss with each other and consult on various fundamental issues pertaining to the Company, including but not limited to those matters requiring or involving approval of the shareholders of the Company;

  • Century NL and the Principals have agreed to restrictions on transfer with respect to their ownership of Shares and, with respect to the Principals, their ownership of Century NL. These restrictions apply for an initial three year lock-up period (the "Initial Lock-Up Period"). After expiry of the Initial Lock-Up Period, there will be a staggered release from the lock-up agreements based on achievement of certain milestones, including completion of a bankable feasibility study on any of the Company's Duncan Lake, Attikamagen or Sunny Lake projects and commencement of construction on any of these projects, with all shares to be released from the lock-up agreements upon the completion of construction of a mine on any of the properties. The lock-up agreements are subject to certain limited exceptions, including transfers among Century NL and the Principals and certain of their respective affiliates;

  • mutual rights of first refusal, which will apply with respect to Century NL and the Principals until such time as their ownership interest in the Company is less than 20% and will apply with respect to WISCO until such time as their ownership interest in the Company is less than 15%; and

  • covenants between Century NL, the Century Principals and WISCO not to perform any act or enter into any transaction or negotiation which might materially adversely interfere or be materially inconsistent with the consummation of the transactions contemplated in the WISCO Shareholders Agreement, the WISCO Subscription Agreement, the WISCO Investment Agreement or the framework agreement entered into between Century Holdings and WISCO, or which might materially adversely interfere with or impact upon the negotiation and/or execution of the joint venture agreements contemplated to be entered into between the Company and WISCO for the Duncan Lake, Attikamagen and Sunny Lake projects.

A copy of the Early Warning Report has been filed with applicable securities commissions and can be found at www.sedar.com.

Century Iron Ore Corporation
Gebouw Rivierstaete, Suite 1.17
Amsteldijk 166, 1079 LH Amsterdam

The TSX-V has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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