Red Crescent Resources Limited

Red Crescent Resources Limited

March 07, 2011 11:19 ET

Red Crescent Relinquishes Its Rights to the Lomie Nickel Project in the Republic of Cameroon

- Decision consistent with focus on base metals projects in Turkey -

TORONTO, ONTARIO--(Marketwire - March 7, 2011) -


Red Crescent Resources Limited (TSX:RCB) ("RCR" or the "Company") a mineral exploration and development company focused on base metals today provided an update on its technical and legal assessment of activities associated with the rights to the LOMIE Nickel Project ("LNP") exploration permits situated in the Republic of Cameroon, West Africa.

"Following an examination of the results of the technical and legal review of Lomie and taking into account the company's core focus in Turkey, the Red Crescent Board has determined that relinquishing our rights to the Lomie Project is in the best interest of our shareholders and our medium-term potential." said Mr. Alan M. Clegg, Chairman and CEO of Red Crescent Resources. "In making this decision the Board has emphasized the necessity for RCR management to focus on executing our business strategy, which is centered on the development of its Base Metal projects in Turkey. These projects have the potential to deliver significant sustainable operations that run in the lower cost quartile of the cost curve, unlike Lomie which simply was not in that class."

Red Crescent originally acquired the Lomie Project as part of the Reverse Takeover Transaction ("RTO") with NiCo Mining Limited ("NiCo"). 

The Lomie Project had been held by NiCo on a care and maintenance basis since late 2008 due to the uncertainty of the Nickel market and collapse of the financial markets at that time. 

The Lomie Project was assigned no value within the RTO transaction between RCR and NiCo that closed in November 2010 on the basis that it was non-operational and on hold pending further review to assess the projects potential for further exploration work, sale to a third party, or release back to the state of Cameroon. 

An independent fair market valuation of the Lomie properties in March 2010 assigned a carrying value as at 31st December 2009 of between CAD$1.130 and CAD$1.250 million. The asset was reported in the 30th September 2010 financial statements with a value of approximately CAD$980 000.

RCR has now completed a technical review of the data and information available and conducted a more detailed legal review of the sustainability of the rights. The technical outcomes have illustrated that the mineral deposits found within the Lomie Project prospecting licences are unlikely to deliver economically exploitable resources and are not of any significant interest for further exploration investment and development, while the legal reviews main outcome has indicated that maintenance of the right of control for the exploration licences was about to become prohibitively expensive due to pending changes in legislation and prescriptive work program investment.

Mr. Richard Giel, Red Crescent Resources Chief Financial Officer added that; "Red Crescent will now wind up the subsidiary structure that was created originally by NiCo to house the Lomie Project and benefit from the related savings of the management cost associated with the maintenance of these structures. An impairment charge for the full carrying value of the Lomie Project and its subsidiaries will be recorded in the fourth quarter ending 31st December 2010."

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.

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