Red Crescent Resources Limited
TSX : RCB

Red Crescent Resources Limited

May 16, 2011 10:42 ET

Red Crescent Receives $4.6 Million Strategic Equity Investment and a Farm-In Agreement for Up to $17M From Petmin Limited

Proceeds to Proportionately Support Exploration Activities at the Sivas Copper Project

TORONTO, ONTARIO and LONDON, ENGLAND and JOHANNESBURG, SOUTH AFRICA--(Marketwire - May 16, 2011) -

NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA

Red Crescent Resources Limited (TSX:RCB) ("RCR" or the "Company") a mineral exploration and development company focused on base metals development in Turkey today announced that it has signed a strategic equity investment agreement with Petmin Limited, a South African multi-commodity mining company. The investment will generate net proceeds of CDN $4.64 million, of which CND $1.5 million will be spent on the further development and exploration of Red Crescent's recently acquired Sivas Copper Project.

"We are pleased to be entering into an agreement with Petmin, which provides us the benefit of a strategic partner with strong cash flows to support Red Crescent's development plans through equity investment and the "farm-in" to SIVAS as well as the opportunity for shared experience in company growth and development with Petmin's strong management team," said Alan M. Clegg, Chairman and CEO of Red Crescent Resources. "As a result of today's announcement, the Sivas Copper Project exploration program will begin imminently."

Ian Cockerill, Executive Chairman of Petmin Limited said "We are pleased with the opportunities represented with this strategic equity investment in Red Crescent and associated "farm-in" to the Sivas Copper Project. It represents another step along the path in alignment with our Vision, i.e. to develop into a mid-tier multi-commodity mining company, through organic and acquisitive growth by focusing on a mix of quality, cash producing assets and projects, with a diverse geographical spread of commodities within fundamentally strong and stable economies and that feed into infrastructure development and urbanization globally. We are looking forward to being an integral part of both the RCR Board and SIVAS project team and progressing this exciting prospect up the value curve based on positive outcomes from the planned stages of exploration and development hopefully to a producing operation over the next 4 to 5 years."

Highlights of the Strategic Equity Investment

1.Petmin will make an equity investment in Red Crescent, subject to all regulatory approvals, totaling CDN $4.64 million.
2.Petmin will receive approximately 9.28 million shares, each at a price of CDN $0.50 per ordinary share, giving the company a 10.1% ownership stake in Red Crescent.
3.Red Crescent has committed at least CDN$1.5 million of the total strategic investment to the Sivas Copper Project. The balance of the funds will be deployed at the discretion of the company into the development of its other projects at Hakkari and Tufanbeyli and for corporate and general purposes.
4.Red Crescent and Petmin have also signed a "farm-in" agreement wherein PETMIN will fund the project development expenses of the Sivas Copper project, against a defined plan of exploration and engineering study up to a value of CAD$17m, generally in line with the terms of the Definitive Agreement signed with GENSAY, Red Crescent's 25% joint venture partner in RCR Quantum Mining A.S., the owner and operator of the Sivas Copper Project.
5.The "farm-in" agreement defines a work plan around proven geophysical anomalies for exploration in 4 phases for the delineation of the potential mineralisation to produce a target NI 43-101 compliant resource base of between 130Mt and 150Mt @ a grade of >1% <1.5% Cu, of which 33% will be in the measured category, 30% indicated, and 37% in the Inferred category. While the agreement contemplates these percentages and resources, there is no certainty that these percentages and resources will be defined. Further, the completion of an independently verified Pre-Feasibility Study (PFS) is to be completed. The potential total investment facilitated by PETMIN in the Sivas Copper Project represents up to CAD$18.5 million over a period of approximately 3 years to earn a Thirty Seven point Five percent (37.5%) stake in the project.
(The potential quantity and grade is conceptual in nature, there has been insufficient exploration to define a compliant mineral resource and it is uncertain if further exploration will result in discovery of a mineral resource.)
6.Post the successful completion of the PFS, a Bankable Feasibility Study will be commissioned and financed pro-rata according to shareholding in the project at that time.

ABOUT RED CRESCENT RESOURCES

Red Crescent Resources (TSX:RCB) is a junior mining company based in Turkey. The company is a first mover in its core area of operations and is applying modern exploration techniques to previously inaccessible areas that have been identified as having a high potential for base metal deposits, notably Zinc, Lead and Copper. Red Crescent's long term strategy is to acquire and consolidate regional projects in Turkey and be a low-cost producer with world-class assets. More information can be found at www.redcrescentresources.com

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

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.

Contact Information

  • TMX Equicom
    Joe Racanelli
    416 815 0700 ext 243
    jracanelli@equicomgroup.com

    Red Crescent Resources
    Alan Clegg
    +90 530 662 8964 or +27 82 469 8378
    +90 312 448 2926 (FAX)

    PETMIN Limited
    Ian Cockerill
    +27 11 706 1644 or +27 82 892 5898 or +44 789 449 0992
    +27 11 706 1594 (FAX)