NiCo Mining Limited
TSX VENTURE : NCL

NiCo Mining Limited

September 07, 2010 16:49 ET

NiCo Mining Enters Into A Securities Exchange Agreement With Red Crescent Resources

TORONTO, ONTARIO--(Marketwire - Sept. 7, 2010) -

(NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA)

NiCo Mining Limited ("NiCo" or the "Company") (TSX VENTURE:NCL) announced today that it has entered into a Securities Exchange Agreement (the "Agreement") with Red Crescent Resources (Barbados) Limited ("RCRB") and the shareholders and other securityholders of RCRB providing for the acquisition by NiCo of all of the issued and outstanding shares and other securities of RCRB. The Agreement gives effect to the reverse take-over transaction (the "RTO") described in press releases of NiCo dated March 25 and August 23, 2010.

NiCo also announced that RCRB has received gross proceeds of $5,976,655 from a private placement (the "Private Placement") of subscription receipts (the "Subscription Receipts") which are convertible, without additional consideration, into shares ("RCRB Shares"), share purchase warrants ("RCRB Warrants") and exchange receipts ("RCRB Exchange Receipts").

Description of Private Placement

On September 7, 2010, RCRB issued a total of 5,746,784 Subscription Receipts at a price of $1.04 each for total proceeds of $5,976,655. Each Subscription Receipt is convertible, without additional consideration, into a unit (a "RCRB Unit") consisting of one RCRB Share, one-half of one RCRB Warrant and one RCRB Exchange Receipt. Each RCRB Warrant entitles the holder to purchase one RCRB Share at a price of $1.30 per share until September 7, 2012. Each RCRB Exchange Receipt entitles the holder to receive one exchange receipt of NiCo (a "NiCo Exchange Receipt") to be issued under the terms of the Agreement.

30% of the gross proceeds received by RCRB under the Private Placement has been paid to RCRB and the remaining 70% is being held in escrow and is to be released to RCRB upon completion of the RTO (the "Escrow Release Condition"). If the Escrow Release Condition is not satisfied or waived prior to November 5, 2010, the RCRB Subscription Receipts will automatically be converted into such number of RCRB Units as is equal to 1.15 RCRB Units for each Subscription Receipt held by such holder multiplied by 30% and the escrow proceeds will be returned to holders of the Subscription Receipts.

Haywood Securities Inc. and Optiva Securities Ltd., of London England, acted as agents for RCRB in connection with the Private Placement and received compensation warrants (the "RCRB Compensation Warrants"), each of which entitles the holder to purchase one RCRB Share and one half of one RCRB Warrant at a price of $1.04 per share until September 7, 2012.

Description of Securities Exchange Agreement

Under the Agreement, NiCo will issue at closing (the "Closing") up to (i) 73,300,394 common shares of NiCo ("NiCo Shares") in exchange for all of the issued RCRB Shares, (ii) 6,850,596 share purchase warrants (the "NiCo Warrants") in exchange for the RCRB Warrants (iii) 5,746,784 exchange receipts (the "NiCo Exchange Receipts") in exchange for the RCRB Exchange Receipts, (iv) 822,071 compensation warrants (the "NiCo Compensation Warrants") in exchange for the RCRB Compensation Warrants and (v) additional warrants to purchase up to 561,348 NiCo Shares in exchange for 235,450 other warrants of RCRB. The warrants to be issued by NiCo will contain substantially the same terms as the warrants of RCRB being acquired under the Agreement, subject to adjustment to the exercise price and the number of NiCo Shares or other securities issuable on exercise thereof to give effect to the exchange ratio of approximately 2.384 NiCo Shares for each RCRB Share being exchanged.

Each NiCo Warrant will entitle the holder thereof to purchase one NiCo Share at a price of $0.56 until September 7, 2012. Each NiCo Exchange Receipt will entitle the holder thereof, without additional consideration, to acquire 0.80 of a NiCo Share in the event that the View 22 Debenture, defined below, held by NiCo is not fully repaid by August 15, 2011, subject to adjustment for amounts paid down on the debenture on or prior to such date. Each NiCo Compensation Warrant will entitle the holder to purchase one NiCo Share and one half of one NiCo Warrant at a price of $0.44 per share until September 7, 2012.

The Closing is scheduled to occur on November 5, 2010 or such other date as NiCo and RCRB may agree. Following Closing shareholders of RCRB are expected to own up to approximately 90% of the issued and outstanding NiCo Shares. NiCo will be calling a special meeting of shareholders to, among other things, change the name of Company to "Red Crescent Resources Limited" or such other name as may be approved by RCRB.

The RTO remains conditional upon, among other things, receipt of all necessary regulatory, stock exchange, and shareholder approvals.

Alan Clegg, through SAT Enerji Is Gelistirme Mad. Yat. Muh. Ins. A.S., a Turkish corporation, and Afrasia Mining & Energy Investment Holding Ltd., a Channel Islands corporation, beneficially owns a total of 13,948,805 RCRB Shares and Douglas Taylor 5,923,301 RCRB Shares, representing 55.8% and 23.7% respectively, of the RCRB Shares issued and outstanding. No other shareholder beneficially owns more than 10% of the issued RCRB Shares.

About Red Crescent Resources (Barbados) Limited 

RCRB is a company incorporated under the laws of Barbados. RCRB is targeting historically inaccessible areas in Turkey where no modern application of exploration techniques or technology has been applied, with high potential for discovery of significant base metal deposits. RCRB's Hakkari Zinc Project is the main focus of current and planned activity.

RCRB believes that its licensed area contains strong potential for the delineation of mineral resources through the exploration and evaluation with "state of the art" technologies and techniques of known zinc-lead mineralization. In a press release issued on August 3, 2010, NiCo described the first exploration drilling results on RCRB's Hakkari zinc project.

A copy of a National Instrument 43-101 – Standards of Disclosure for Mineral Projects ("NI 43-101") compliant Technical Report entitled "NI 43-101 Technical Report on the Hakkari Zinc Project" dated March 30, 2010 has been filed on SEDAR. The report was prepared by Michael James Robertson, PrSciNat, MSAIMM, Principal Consulting Geologist for The MSA Group (Pty) Ltd., on behalf of RCRB's wholly owned subsidiary, Red Crescent Resources Holding A.S., in respect of its Hakkari zinc project located in the Republic of Turkey.

About NiCo Mining Limited

NiCo maintains interests in its Lomie nickel and cobalt properties in Cameroon which are being held on a care and maintenance basis and holds a $1,000,000 principal amount 12% secured debenture (the "View 22 Debenture") of View 22 Technology Inc. which is repayable on or before July 17, 2011.

The Company has 8,898,100 common shares issued and outstanding and is debt free. In addition to the View 22 Debenture and a convertible debenture of RCRB in the principal amount of US$500,000, the Company has approximately $1.8 million of working capital.

Alan Clegg, a Qualified Person as defined by National Instrument 43-101, has reviewed and verified the technical information contained in this news release.

Completion of the transaction is subject to a number of conditions, including exchange acceptance and disinterested shareholder approval. The transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in a Filing Statement to be prepared in connection with the transaction, any information released or received with respect to the RTO may not be accurate or complete and should not be relied upon. Trading in the securities of NiCo should be considered highly speculative.

The statements made in this press release may contain forward-looking statements that may involve a number of risks and uncertainties. Actual events or results could differ materially from the Company's expectations and projections.

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

  • NiCo Mining Limited
    R. A. Bondy or Tali Afgin
    416-637-2080
    416-637-2081 (FAX)
    or
    Red Crescent Resources
    Alan Clegg
    +90 530 662 8964
    +27 82 469 8378
    +90 312 448 2926 (FAX)
    or
    Anthony Frizelle
    44-207-584-5871