Rogue Iron Ore Announces Spin-Out Agreement, Plan of Arrangement to Be Filed This Week

- ROGUE SHAREHOLDERS TO RECEIVE ONE RAPIER GOLD INC. SHARE FOR EVERY 4.04 SHARES OF ROGUE. ELIGIBILITY CUT-OFF DATE TO RECEIVE RAPIER SHARES ANTICIPATED TO BE DECEMBER 12, 2012. - RAPIER ACQUIRING PEN GOLD SOUTH PROPERTY FROM ROGUE AND PEN GOLD NORTH PROPERTY FROM RIO TINTO, CREATING ONE OF THE LARGEST GOLD EXPLORATION LAND PACKAGES ON THE PORCUPINE-DESTOR FAULT. - RIO TINTO DRILLING DISCOVERED VISIBLE GOLD IN 11 SEPARATE DRILL HOLE INTERCEPTS AT SHALLOW DEPTHS IN FAVOURABLE CARB-ROCK. - RAPIER ANNOUNCES IT WILL BE RAISING $4,500,000 AT A PRICE OF $0.30 FOR NON FLOW-THROUGH UNITS AND $0.35 FOR FLOW-THROUGH SHARES.

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 12, 2012) -

 

NOT FOR DISSEMINATION TO UNITED STATES NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

Rogue Iron Ore Corp. (TSX VENTURE:RRS) (the "Company" or "Rogue") is pleased to announce that following the execution of an Arrangement Agreement with its subsidiary, Rapier Gold Inc. ("Rapier"), the Company received an Interim Court Order providing for the calling of a meeting of the Company's securityholders to approve its proposed plan of arrangement with Rapier (the "Plan of Arrangement"). An information circular is anticipated to be mailed out to Rogue's securityholders on November 14, 2012 to approve the terms of the Plan of Arrangement and other matters at the Company's December 10, 2012 Annual General & Special Meeting.

 

"Rapier will become a stand-alone gold exploration company, with an exciting new, gold-focused management team led by Roger Walsh. The Rogue team is committed to creating shareholder value and this transaction allows us to capitalize on an exciting gold project without diminishing our iron focus. Mr. Walsh has done a tremendous job in structuring this deal and bringing Rio Tinto's gold project into play. We are confident the team he is putting in place will continue to find ways to bring value to our shareholders. Work continues to progress at Radio Hill and we will continue to look at monetizing our Langmuir Nickel Project and our Bathurst Lead/Zinc Project", commented Freeman Smith, President and CEO.

 

About Rapier's Pen Gold Property

 

Rapier has consolidated a number of highly prospective gold properties along the Porcupine-Destor Deformation (Fault) Zone into one property, the Pen Gold Property. This property is comprised of three adjacent land packages, outlined below:

  • Pen Gold North: The Pen Gold North Property refers to the land package which Rio Tinto is contributing to the transaction. Pen Gold North shares its southern boundary with the Pen Gold South Property (Timmins West), where drilling by Rio Tinto discovered visible gold in 11 separate drill core intervals. 
     
  • Pen Gold South: The Pen Gold South Property refers to the land package which Rogue contributed to Rapier's land holding, and accounts for the spin-out shares which Rogue shareholders will be receiving on a 1:4.04 basis (one Rapier share will be received for every 4.04 shares held in Rogue). The eligibility date for this transaction is anticipated to be December 12, 2012, shortly after the date of Rogue's Annual General & Special Meeting where approval for the transaction will be sought. 
     
  • Pen Gold East: The Pen Gold East Property was acquired by Rapier in June 2012 and complements Rogue's/Rapier's existing land package. Pen Gold East has had little exploration work to date, although it is known to contain the same geological units as the adjacent Pen Gold South and Pen Gold North properties.
     

In 1998, while drilling near the area of their talc deposit, Rio Tinto discovered gold on the Pen Gold North property. Between 1998 and 2007 gold prices rose from $300/oz to over $800/oz and have since climbed to prices in excess of $1700/oz. In 2008 this discovery was revisited by Rio Tinto and seven shallow drill holes were drilled. Visible gold was noted in several of these holes in quartz carbonate veins. The best assay results include those from drill holes numbered:

  • PC08-004 with 13.3 g/t gold over 0.3 m;
  • PC08-006 with 22.1 g/t over 0.3 m; and,
  • PC08-005 with 9.96 g/t over 2.0 m.

A follow-up drill program in 2010 included seven holes from 100 m to 300 m in depth and returned numerous shallow intercepts with visible gold in quartz carbonate veins hosted in green "carb-rock", carbonate-carb contacts and in the sedimentary rocks themselves. Sulphides occur as fine-to medium-grained stingers in veins along vein contacts and with fuchsite alteration zones at vein margins. Structurally the area has undergone four major deformational events. The second event results in structures that include extension of the Porcupine-Destor Deformation Zone ("PDDZ") which is synchronous with known gold mineralization in the Timmins Gold Camp (see Figure 1). Early exploration in the area was hampered by glacial cover which has been partly remedied by modern geochemical and geophysical techniques (see technical report on Rogue's SEDAR filings).

 

To view Figure 1: Mines Near Rapier Land Package, please visit the following link: http://media3.marketwire.com/docs/8335021.jpg

 

Drilling has thus far been limited to a maximum of approximately 300 m in depth. The following graph (see Figure 2) shows relative maximum depths of mineralization at various mines located within the greater Timmins gold camp area.

To view Figure 2: Abitibi Gold Mines - Deep Orebodies, please visit the following link: http://media3.marketwire.com/docs/8335022.jpg

 

The Pen Gold Property contains all the elements for a significant gold discovery with its geology and proximity to the Porcupine-Destor Deformation Zone which is often described as the structural conduit of gold-bearing fluids responsible for Timmins Gold Camp gold deposition. Several porphyries, often described as heat engines, which drive the gold bearing fluids upward into secondary structures, have been identified on the property. In addition to the favourable style of mineralization and alteration, the presence of visible gold in so many drill intercepts at such shallow depths creates a scenario for significant gold deposition and an exciting new exploration play.

 

Rapier Exploration

 

Rapier has initiated an exploration program on the Pen Gold property which commenced with a thorough review of the historical data. Preliminary mapping, overburden stripping of prospective geology and subsequent channel sampling were undertaken. The surface work is the foundation to a staged exploration program designed to assist in assembling a more global picture of the area, its mineralization potential, and ultimately, narrow down targets for diamond drilling. Rapier intends to embark on a diamond drill program to test the best targets resulting from this preliminary geological work. Mr. Gary Wong, P.Eng. is a qualified person within the meaning of NI 43-101 and has reviewed the technical content of this release.

 

Spin-out transaction

 

Pursuant to the Plan of Arrangement, Rogue will be distributing the 11,000,000 common shares it holds in Rapier (collectively the "Rapier Shares" and each a "Rapier Share") to its shareholders on a one (1) Rapier Share for every four and four one hundredths (4.04) common shares held in Rogue, rounded down to the nearest whole Rapier Share. All warrants held in Rogue will be cancelled and holders of such warrants will be issued one (1) new Rogue warrant for each Rogue warrant held with an exercise price adjusted to reflect the spin-out of the gold division from Rogue and one (1) warrant to purchase common shares in Rapier for every four and four one hundredths (4.04) Rogue warrants held, rounded down to the nearest whole Rapier warrant. All outstanding options to purchase common shares in Rogue will be cancelled and exchanged on a one (1) for one (1) basis for new options to purchase common shares in Rogue with an adjusted exercise price to reflect the spin-out of the gold division from Rogue. The share, warrant and option exchanges set out above will be based on securityholdings as of a date following the Annual General & Special Meeting established by Rogue.

 

Closing of the Plan of Arrangement is subject to a number of customary conditions precedents including, but not limited to:

  1. Rapier closing an offering raising at least $4,000,000 in net proceeds;
  2. The Plan of Arrangement being approved by two-thirds of Rogue shareholders, warrantholders and optionholders at the upcoming Annual General & Special Meeting;
  3. The granting of a Final Order approving the Plan of Arrangement and the fairness of its terms from the Supreme Court of British Columbia; and
  4. The Common Shares of Rapier being listed on the TSX Venture Exchange (the "Exchange").

Rapier has entered into an engagement letter (the "Engagement Letter") with Jennings Capital Inc. ("Jennings") whereby Jennings has agreed to act as lead agent to raise, on a best efforts basis, gross aggregate proceeds of up to $4,500,000 (the "Offering ") through the issuance of up to 7,142,857 flow through subscription receipts (the "Flow-Through Subscription Receipts") at a price of $0.35 per Flow-Through Subscription Receipt and up to 6,666,667 subscription receipts ("Unit Subscription Receipts") at a price of $0.30 per Unit Subscription Receipt. The Offering may include up to $750,000 or orders identified by the Company (the "Presidents List Orders"). The net proceeds of the Offering will be used to fund Rapier's exploration program and for general corporate working capital.

Each Flow-Through Subscription Receipt will entitle the holder to receive one common share of Rapier (each a "Rapier Share") issued on a flow-through basis (each a "Flow-Through Share") and each Unit Subscription Receipt will entitle the holder to receive a unit ("Unit") comprised of one Rapier Share and one-half of one common share purchase warrant (the "Warrant") without additional payment or further action by the holder immediately following the receipt by Jennings and the escrow agent of a notice from Rapier that all the conditions precedent to the completion of the Plan of Arrangement have been satisfied or waived and the satisfaction of other terms and conditions in favor of Jennings.

Each Warrant will entitle the holder thereof to acquire at any time on or before the second anniversary of the date on which the Rapier Shares are listed on the TSX Venture Exchange (the "Rapier Listing Date"), one (1) Rapier Share at a price of $0.50. Should the Rapier Shares trade at a weighted average price of greater than $0.60 on the Exchange for any twenty consecutive trading day period commencing on a day that is not less than four months from the Rapier Listing Date, Rapier may on written notice to the holders of the Warrants reduce the exercise period of the Warrants to a date that is not less than 45 days from the date of the notice.

 

The proceeds from the sale of the Flow Through and Unit Subscription Receipts will be placed into escrow on closing of the Offering. If the Plan of Arrangement closing (the "Plan of Arrangement Closing") takes place on or before December 20, 2012 then the gross proceeds from the Offering will be released to Rapier concurrent with the Plan of Arrangement Closing. If the Plan of Arrangement Closing does not take place on or before December 20, 2012 then the gross proceeds from the Offering will be returned to the subscribers under the Offering. The Rapier Shares (including the Flow-Through Shares), the Offering Warrants and the Rapier Shares issuable upon exercise of the Offering Warrants to be issued or issuable to subscribers under the Offering will not, upon completion of the Plan of Arrangement, be subject to a hold period except to the extent required to comply with the escrow requirements of the Exchange applicable to principals that purchase securities pursuant to the Offering.

 

Upon the Plan of Arrangement closing, Rapier will pay Jennings a cash fee equal to 7% of the gross proceeds of the Offering and grant the agent broker warrants exercisable to acquire that number of Units equal to 7% of the aggregate number of Subscription Receipts issued pursuant to the Offering (the "Broker Warrants"). The commission on President's List Orders, if any, will be 3.5% and the number of Broker Warrants in respect of President's List Orders will be equal to 7%.

 

Listing of the all Rapier Shares issuable pursuant to the Offering is subject to the approval of the Exchange.

The above description summarizes the terms of the Arrangement Agreement, a copy of which has been filed on SEDAR as a material document and is available for review at Rogue's head office. Investors are urged to read the Arrangement Agreement in its entirety for a more complete description of the Plan of Arrangement as well as the information circular to be provided to shareholders in connection with the Annual General & Special Meeting of Rogue's securityholders.

 

ABOUT ROGUE IRON ORE CORP.

Rogue Iron Ore Corp. is an exploration and development company with offices in Vancouver, BC and Timmins, ON. The Company's primary asset is its Radio Hill iron ore project located 80 km southwest of Timmins, ON.

 

ON BEHALF OF THE BOARD OF DIRECTORS

Freeman Smith, President & CEO

Follow Rogue Iron Ore Corp. On:

Facebook: http://www.facebook.com/rogueiron

Twitter: http://twitter.com/rogueiron

 

Cautionary Note Regarding Forward Looking Statements: Certain disclosure in this release constitutes forward-looking statements. In making the forward-looking statements in this release, the Company has applied certain factors and assumptions that are based on the Company's current beliefs as well as assumptions made by and information currently available to the Company, including that the Company is able to obtain any government or other regulatory approvals required to complete the Company's planned exploration activities, that the Company is able to procure personnel, equipment and supplies required for its exploration activities in sufficient quantities and on a timely basis and that actual results of exploration activities are consistent with management's expectations. Although the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect, and the forward-looking statements in this release are subject to numerous risks, uncertainties and other factors that may cause future results to differ materially from those expressed or implied in such forward-looking statements. Such risk factors include, among others, that actual results of the Company's exploration activities will be different than those expected by management and that the Company will be unable to obtain or will experience delays in obtaining any required government approvals or be unable to procure required equipment and supplies in sufficient quantities and on a timely basis. Readers are cautioned not to place undue reliance on forward-looking statements. The Company does not intend, and expressly disclaims any intention or obligation to, update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law.

 

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 news release.

 

Contact Information: 
Rogue Iron Ore Corp.
Mike McCormick
Corporate Communications
(604) 638-1157
[email protected]
www.rogueiron.com

 


Source: Marketwire International (November 12, 2012 - 7:00 AM EST) 

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