Redcorp Ventures Ltd.
TSX : RDV

Redcorp Ventures Ltd.

September 18, 2008 09:00 ET

Redcorp Ventures Ltd.: Project Funding Update

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 18, 2008) -

NOT FOR DISSEMINATION TO THE UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Redcorp Ventures Ltd (TSX:RDV) ("Redcorp" or the "Company") and its wholly-owned subsidiary, Redfern Resources Ltd. ("Redfern"), are pleased to announce that the holders of more than the requisite 66 2/3% of the Company's 13% senior secured notes ("Notes") have agreed to consent to certain amendments to the Note Indenture dated July 10, 2007 between the Company and CIBC Mellon Trust Company, subject to their agreement, acting reasonably, with respect to the form of definitive documentation. The proposed amendments will allow Redcorp access to the remaining project funding necessary for development of the Tulsequah Chief Mine Project to commercial production.

Noteholder Consent Agreement

Amendments to the existing Note Indenture will permit, among other things:

- Execution of the proposed gold purchase agreement with Gold Wheaton Gold Corp. (the "Gold Sale Agreement") providing US$90 million in funding (as announced on June 12, 2008);

- The credit facility with HSBC Bank Canada providing funding of up to CAN$85 million (the "HSBC Facility") secured by Redcorp's investments in asset-backed commercial paper notes (as announced on August 22, 2008); and

- A contingent overrun subordinated debt facility of CAN$25 million arranged through MRI Trading AG as part of the Company's concentrate sales offtake agreements (as announced on February 4, 2008).

The Noteholders have agreed to consent to the proposed amendments on the terms and conditions set out in a term sheet and to execute and deliver such further instruments, deeds and documents as shall be reasonably required in order to fully perform and carry out the provisions of the term sheet, subject to Noteholder agreement, acting reasonably, with respect to the form of the definitive documents. The term sheet sets out the proposed amendments to the Note Indenture and the consideration to be paid for Noteholder consent (the "Consent Fee") consisting of:

1) Approximately 701 warrants (the "Consent Warrants") per Note, to each Noteholder on the Record Date (as hereinafter defined), exercisable for a period of three years at a price representing a 20% premium to the five (5) day volume weighted average trading price of Redcorp's shares immediately prior to the execution of the amended Note Indenture (the "Consent Date");

2) A modification to the terms of the Notes, effective seven business days from the Consent Date, whereby an additional 2.5% annual interest payment in kind will be accrued to the principal amount of the current outstanding Notes on a semi-annual basis (the "Interest Consent Fee"); and

3) A consent net smelter return royalty fee (the "NSR Consent Fee"), distributed on a pro rata basis, to the Noteholders on the Record Date, in the form of a certificate which pays a 2.5% net smelter return royalty on production from the Tulsequah Chief Mine Project payable to the holder semi-annually (the "NSR Certificate"). The semi-annual NSR Certificate payment will be calculated as the gross revenue received by the Company less costs incurred subsequent to concentrating, which includes (among other things) smelting, refining, marketing, transportation, and insurance in the given period. The NSR Certificate payments will be net of costs as described above and any taxes required to be withheld by Redcorp as a result of the payments.

It is anticipated that the Consent Warrants and NSR Certificates will be distributed pursuant to a final short form prospectus to be completed within 45 days of the Consent Date (the "Consent Deadline"). The Consent Warrants and NSR Certificates will be distributed to the beneficial holders as of two days following the date Redcorp receives a receipt from the securities regulatory authorities having jurisdiction for the final short form prospectus (the "Record Date"). In the event that Redcorp does not receive a receipt for the final short form prospectus on or prior to the Consent Deadline, other than by virtue of a delay caused by any regulatory authority having jurisdiction or any requirement of a regulatory authority having jurisdiction, the number of Consent Warrants to be issued will be increased by 10% and the NSR Consent Fee will be increased to 2.75%.

The payment of the Consent Fee is subject to regulatory approval.

The Company and Noteholders are working towards finalizing the required definitive documentation to give effect to the amendments to the Note Indenture. It is currently anticipated that completion of such final documentation will occur on or about September 22, 2008.

The Company is also presently finalizing documentation with HSBC Bank Canada to enable access to the HSBC Facility concurrently with completion of the Noteholder consent documentation. Access to funding under the Gold Sale Agreement is subject to execution of the final definitive agreement with Gold Wheaton, expected on or before September 18, 2008, receipt of Noteholder consent for the amendments and acquisition of certain key permits, anticipated in late 2008. Access to the contingent overrun facility with MRI Trading AG is subject to completing final documentation.

Use of Funding

Redcorp has advanced funds to its wholly-owned subsidiary Redfern to construct the Tulsequah Chief Mine in northwest British Columbia. Construction commenced in late 2007 and is advanced at this time. Work completed to date includes the surface transportation infrastructure (roads and airstrip), temporary construction camp facilities, barge landing and initial preparation of the mine site. The additional funds will allow completion of the remaining portion of the construction activities including surface plant, underground development and tailings management facilities.

Redcorp is a Vancouver based mineral exploration and development company with active projects in British Columbia, Canada and Portugal. Further information on Redcorp and the Tulsequah Project can be obtained on our website at www.redcorp-ventures.com and at Redfern's website at www.redfern.bc.ca or by calling toll-free to Troy Winsor, Manager of Investor Relations or Salina Landstad, Manager of Public Relations at the contact numbers listed below.

ON BEHALF OF THE BOARD OF DIRECTORS OF REDCORP VENTURES LTD.

Terence Chandler, President and CEO

The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from the U.S. registration requirements. This release does not constitute an offer for sale of securities in the United States.

Certain of the statements made and information contained herein is "forward-looking information" within the meaning of the Securities Act (Ontario) and the Securities Act (Alberta.) Forward-looking information includes disclosure regarding possible or anticipated events, conditions or results of operations that is based on assumptions about future economic conditions and courses of action and includes future oriented financial information with respect to prospective results of operations or financial position that is presented either as a forecast or a projection. Forward-looking information is often, but not always, identified by the use of words such as "seek", "anticipate", "believe", "plan", "estimate", "expect" and "intend"; statements that an event or result is "due" on or "may", "will", "should", "could", or "might" occur or be achieved; and, other similar expressions.

More specifically, forward-looking information contained herein includes, without limitation, statements concerning our plans at our Tulsequah Project (inclusive of the Big Bull Project), the net present value of the Tulsequah Project, the timing and amount of estimated future production and mine life, expected future prices of gold, silver, copper, lead and zinc, mineral reserve and mineral resource estimates, estimated capital and operating costs of the project, estimated capital pay-back period, estimated asset retirement obligations, timing of development and permitting time lines; all of which involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information.

Forward-looking information contained herein is based on material factors and assumptions and is subject to a variety of risks and uncertainties which could cause actual events or results to differ materially from a conclusion, forecast or projection in the forward-looking information. These include, without limitation, material factors and assumptions relating to, and risks and uncertainties associated with, the availability of financing for activities when required and on acceptable terms, the accuracy of the interpretation of drill results and the estimation of mineral resources and reserves, the geology, grade and continuity of mineral deposits, the consistency of future exploration, development or mining results with our expectations, metal price fluctuations, the achievement and maintenance of planned production rates, the accuracy of component costs of capital and operating cost estimates, current and future environmental and regulatory requirements, favourable governmental relations, the availability of permits and the timeliness of the permitting process, the availability of shipping services, the ultimate recovery amount, if any, of our investment in third-party asset-backed commercial paper (ABCP) that is currently undergoing liquidity restructuring by the Committee representing the Montreal Accord, the availability of specialized vehicles and similar equipment, costs of remediation and mitigation, maintenance of title to our mineral properties, industrial accidents, equipment breakdowns, contractor's costs, remote site transportation costs, materials costs for remediation, labour disputes, the potential for delays in exploration or development activities, timely completion of future NI 43-101 compliant reports, timely completion of future feasibility studies, the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses, commodity price fluctuations, currency fluctuations, continuing global demand for base metals, expectations and beliefs of management and other risks and uncertainties, including those described under Risk Factors Relating to Our Business in our Annual Information Form, filed on SEDAR on March 31, 2008, and in each subsequent Management's Discussion and Analysis.
Although we have attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from any conclusions, forecasts or projections described in the forward-looking information. Accordingly, readers are advised not to place undue reliance on forward-looking information. Except as required under applicable securities legislation, we undertake no obligation to publicly update or revise forward-looking information, whether as a result of new information, future events or otherwise.

News Release 08-18

Contact Information

  • Redcorp Ventures Ltd.
    Troy Winsor
    Manager, Investor Relations
    (604) 466-8934 or 1-888-225-9662
    or
    Redcorp Ventures Ltd.
    Salina Landstad
    Manager, Public Relations & Corporate Communications
    (604) 639-0135 or 1-888-669-4775 ext. 103
    Website: www.redcorp-ventures.com