Rencore Resources Ltd.

Rencore Resources Ltd.

May 31, 2011 16:46 ET

Rencore Resources Ltd. Announces Execution of $2.5 Million Option Agreement With Dundee Corporation Subsidiary and Closing of $1.85 Million Private Placement

TORONTO, ONTARIO--(Marketwire - May 31, 2011) -Rencore Resources Ltd. (CNSX:RNC)("Rencore" or the "Company") is pleased to announce that, further to its press release of April 12, 2011, Dundee Corporation ("Dundee") has made an equity investment of $1,000,000 (see below) in the Company and through a wholly-owned subsidiary ("Subco") has signed an Option Agreement to earn a 33-1/3% interest in Rencore's Ring of Fire activities around the area of Rencore's current Ring of Fire claims in Ontario (the "Rencore ROF Project") by funding $2.5 million of exploration work. Once Subco earns its 33-1/3% interest, a joint venture will be formed between Subco and Rencore.

The majority of the $2.5 million will be spent on diamond drilling of the Company's existing high priority targets and to carry out additional airborne surveys to continue Rencore's strategy of hunting for large economic mineral deposits in relatively unexplored areas.

The Company is also very pleased to announce it has closed its brokered private placement (the "Offering") with the sale of 7,551,021 units ("Units") of Rencore at a price of $0.245 per Unit for gross proceeds of $1,850,000. The Offering was led by IBK Capital Corp. and Dundee Capital Markets (the "Agents").

In connection with the execution of the Option Agreement, Dundee subscribed for 4,081,633 Units of the Offering for a total of $1,000,000 or 54% of the Offering. Following the completion of the Offering, Dundee holds 14.1% of the issued and outstanding share capital of the Company on an undiluted basis. As long as Dundee holds at least 7.5% of the outstanding capital of Rencore, it will have the right to participate pro rata in subsequent financings of Rencore to maintain a 14% interest in the Company.

Proceeds from the Offering will be used for general working capital and to fund exploration on the Company's properties outside of the Rencore ROF Project.

Each Unit of the Offering was comprised of one (1) common share of the Company and one half (1/2) of one common share purchase warrant. Each whole warrant entitles the holder to purchase one (1) common share of the Company at a price of $0.41 per common share until the date which is the earlier of: (i) May 31, 2013; and (ii) thirty (30) days from the tenth day that the common shares trading on the Canadian National Stock Exchange close at or above $0.55 and the 10th trading day is at least four (4) months from May 31, 2011.

The Agents received cash commissions of $148,000 and 604,081 broker warrants to acquire Units at $0.245 per broker warrant for a period of twenty-four (24) months from the closing of the Offering.

The Agents will be paid a finder's fee as funds are expended by Subco pursuant to the Option Agreement in tranches of $1,000,000 calculated as either 2% of the funds expended satisfied in common shares of the Company at the market price at the time of issuance or twice that number of warrants exercisable at the market price for two (2) years, subject to regulatory approval.

The securities issued in connection with the Offering have been legended and are restricted from trading until October 1, 2011.

On behalf of the board of directors of Rencore Resources Ltd.,

Richard E. Nemis, President and Chief Executive Officer

Cautionary Note Regarding Forward­Looking Statements: This Press Release contains forward-looking statements that involve risks and uncertainties, which may cause actual results to differ materially from the statements made. When used in this document, the words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" and similar expressions are intended to identify forward-looking statements. Such statements reflect our current views with respect to future events and are subject to such risks and uncertainties. Many factors could cause our actual results to differ materially from the statements made, including those factors discussed in filings made by us with the Canadian securities regulatory authorities. Should one or more of these risks and uncertainties, such actual results of current exploration programs, the general risks associated with the mining industry, the price of gold and other metals, currency and interest rate fluctuations, increased competition and general economic and market factors, occur or should assumptions underlying the forward looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, or expected. We do not intend and do not assume any obligation to update these forward-looking statements, except as required by law. Shareholders are cautioned not to put undue reliance on such forward-looking statements.

Contact Information

  • Rencore Resources Ltd.
    Richard E. Nemis
    President and Chief Executive Officer
    416 864 1456