Red Ore Gold Inc.

Red Ore Gold Inc.

October 18, 2013 13:55 ET

Red Ore Gold Announces Debt for Shares Settlement, Extension of Warrants, and Closing of First Tranche of Private Placement Financing

OTTAWA, ONTARIO--(Marketwired - Oct. 18, 2013) - Red Ore Gold Inc. (Red Ore Gold, or the "Company") announces that it has agreed to settle an aggregate of $69,628.71 of indebtedness owed to certain non-arm's length creditors through the issuance of 696,287 common shares at a deemed issuance price of Cdn.$0.10 per common share. All common shares issued in connection with the shares for debt transaction are subject to a four month statutory hold period.

Pursuant to Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"), the shares for debt transaction constitutes a "related party transaction" as related parties of the Company will receive 696,288 common shares of the Company in connection with the debt settlement. The Company is relying on exemptions from the formal valuation and minority approval requirements of MI 61-101, based on a determination that the securities of the Company are not listed on any Canadian Stock Exchange, units in a private placement are being offered at Cdn. $0.10/unit, and that the fair market value of the transaction, insofar as it involves related parties, does not exceed $2,500,000 and/or 25% of the implied market capitalization of the Company. A material change report will be filed less than 21 days before the closing date of the transaction. This shorter period is reasonable and necessary in the circumstances as the Company wishes to improve its financial position by reducing its accrued liabilities.

Red Ore also wishes to announce that, subject to regulatory approval, the Board of Directors of the Company has extended the expiry date from November 1, 2013 to November 1, 2014 for 6,884,500 share purchase warrants (the "Warrants") for the purchase of 6,884,500 shares of the Company, at a deemed price of Cdn $0.20/share.

The Company also wishes to announce that it will close the first tranche of its private placement on Monday, October 21, 2013, in the amount of Cdn. $80,000. Announced on September 19, the Company approved a non-brokered private placement of its common shares, at $0.10/unit, to a maximum of $500,000 (5 million units). Each unit consists of one common share and one non-transferable share purchase warrant, with each whole warrant being exercisable at a price of $0.15 per share for a period of two years. The warrants will have a Forced Exercise Provision whereby, if the closing price for the Company's common shares is $0.25, or greater, for a period of 10 consecutive trading days from the date of issue, the warrant holders will have 30 days to exercise their warrants; otherwise, the warrants will expire on the 31st day. The Company is not currently listed for trading on any Canadian Exchange; this provision will only have effect subsequent to successfully listing on an Exchange. The proceeds of the private placement will be used to conduct an exploration drill program on the Company's Rye Patch property; to conduct a share buy-back and cancellation; to cancel an outstanding convertible debenture; to conduct further exploration programs, as warranted; and, for general corporate purposes.

The statements in this press release may contain forward looking statements that involve a number of risks and uncertainties. Actual events or results could differ materially from RXX'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 press release.

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