Red Oak Mining Corp. Announces Letter of Intent to Acquire Metrock Resources, Subsidiaries, Exploration Assets and Concurrent Private Placement
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RED OAK MINING CORP. ANNOUNCES LETTER OF INTENT TO ACQUIRE
METROCK RESOURCES, SUBSIDIARIES, EXPLORATION ASSETS
AND CONCURRENT PRIVATE PLACEMENT
VANCOUVER, British Columbia, June 4, 2020 – Red Oak Mining Corp. (“Red Oak” or the “Company”)
(TSXV:ROC.H) is pleased to announce that it has entered into a non-binding letter of intent (the “LOI”) with
Metrock Resources Ltd., a privately held issuer incorporated under the laws of Australia (“Metrock”) dated
June 3, 2020, which outlines the general terms and conditions pursuant to which Red Oak and Metrock
have agreed to complete a transaction (the “Transaction”) that will result in the acquisition of Metrock by
Red Oak by way of a share exchange.
The Transaction is intended to constitute a Fundamental Acquisition, as that term is defined in the policies
of the TSX Venture Exchange (the “TSXV”). On completion of the Transaction, it is intended that Red Oak
will graduate its listing from the N EX board of the TSXV to become a Tier 2 Mining issuer on the TSXV.
Red Oak and Metrock are arm’s length parties.
Acquisition of Metrock Resources
Metrock Resources Ltd. is engaged in the business of mineral exploration through its wholly owned
subsidiary, Coastal Resources Pty Ltd. (“ Coastal”). Coastal, through wholly-owned subsidiaries, holds
certain exploration licences located in Botswana that are prospective explorat ion targets for manganese
including:
100% of eight (8) contiguous tenure licenses encompassing ~ 3,470 square kilometres; and
100% of one (1) tenure license encompassing ~ 55,750 hectares which are adjacent to the
north of the aforementioned eight tenure licenses.
The LOI between Red Oak and Metrock includes the following terms:
Red Oak to issue an aggregate of approxima tely 18,350,000 common shares of Red Oak
("Consideration Shares") in exchange for 100% of the issued and outstanding shares of
Metrock Resources Ltd. The deemed value of the Consideration Shares for the purpose of the
Transaction is $0.10 per share. The Consideration Shares will be subj ect to a three (3) year
escrow.
Red Oak to issue 5,300,000 warrants at an exer cise price of $0.20 to certain shareholders of
Metrock. The warrants will be exercisable for a period of two years from issuance. In the event
that Red Oak’s common shares have a closing price on the TSXV of greater than $0.30 per
common share for a period of 5 consecutive trading days, Red Oak may accelerate the expiry
date of the warrants to the 30th day thereafter (the “Acceleration Clause”).
Red Oak has agreed to pay an arm’s length party an advisory fee equal to 10% of the value consideration
on the Transaction to be satisfied in common shares of Red Oak at the same price per share of the
Transaction, being approximately 1,835,000 common shares.
Definitive Agreement
The Letter of Intent contemplates that the Tran saction will be completed through a definitive agreement
(the “Definitive Agreement”) that is to be negotiated in good faith by Red Oak and Metrock, and contain
the customary representation and warranties for simi lar transactions. Red Oak and Metrock have agreed
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to an exclusivity period expiring July 31, 2020 during which the parties have agreed to negotiate in good
faith and settle the Definitive Agreement.
Private Placement
In conjunction with the Transaction, Red Oak will ar range a private placement at a price of CAD$0.10 per
unit (“Unit”) for proceeds up to CAD$2,000,000 (the “Private Placement”). Each Unit will consist of one
Red Oak Share and one Red Oak Share purchase warrant at a price of $0.20, exercisable for a period of
two years from issuance (the “Warrants”). The Warrants will be subject to the Acceleration Clause.
The Private Placement will be available to existing securityholders of Red Oak utilizing BC Instrument 45-
534 Exemption from Prospectus Requirements for Certain Trades to Existing Securityholders and other
provincial equivalents (collectively, the “Existing Security Holder Exemptions”). Red Oak will make the
Private Placement available to all sharehol ders of Red Oak as of June 4, 2020 (the “ Record Date”) who
are eligible to participate under the Existing Security Holder Exemptions and who have notified Red Oak of
their intention to participate in the Private Placem ent. The Existing Security Holder Exemptions limit a
shareholder to a maximum investment of $15,000 unle ss the shareholder certifies in the subscription
agreement that he or she has obtained advice regarding the suitability of the investment from a registered
investment dealer or otherwise qualifies to rely on another private placement exemption.
In the subscription agreement, shareholders will be required to certify that , on or before the Record Date,
they acquired and held, common shares of Red Oak. Each existing shareholder on the Record Date will be
entitled to purchase Units which will be allocated by Red Oak on a first come, first served basis such that it
is possible that a subscription received from a shareholder may not be accepted by Red Oak if the Private
Placement is over subscribed. Any person who becomes a shareholder of Red Oak after the Record Date
shall not be entitled to participate in the Private Placement under the Existing Security Holder Exemptions.
Red Oak also intends to complete a portion of the Pr ivate Placement pursuant to Multilateral CSA Notice
45-318 - Prospectus Exemption for Certain Dist ributions through an Investment Dealer and the
corresponding instruments, orders and rules im plementing CSA Notice 45-318 in the participating
jurisdictions (the “ Investment Dealer Exemption ”). In addition to conducting the Private Placement
pursuant to the Investment Dealer Exemption, Red Oa k will also accept subscriptions for Units, in its
discretion, where other prospectus exemptions are available.
In accordance with the requirements of the Investment Dealer Exemption, Red Oak advises that, as at the
date hereof, there is no material fact or material change in respect of Red Oak that has not been generally
disclosed. Additionally, Red Oak advises that there is no minimum number of Units being offered pursuant
to the Private Placement.
Red Oak intends to use the net proceeds from the Private Placement for general corporate purposes and
working capital.
All securities distributed pursuant to the Private Placement will be subject to a statutory hold period of four
months from the date of issuance. Closing of the Priv ate Placement is subject to receipt of all necessary
regulatory approvals. Red Oak may pay finders’ f ees in connection with the Private Placement in
accordance with the policies of the TSXV.
About Manganese
The global market for manganese ore is approximately 20 million tonnes per year with the largest production
coming from South Africa. Approximately ninety percent (90%) of manganese is for the manufacturing of
steel and steel alloys and approximately ten percent (10%) is used in batteries including Lithium Ion
batteries for the battery electric vehicle market (“BEV”) and other products. The BEV market is using an
increasing amount of manganese in certain battery fo rmulations including the NCM (Nickel, Cobalt,
Manganese) battery formulas. According to BASF Corporation, lithium ion batteries combined with
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manganese-rich oxides “improves power characterist ics, cycle life and safety of current lithium-ion
technology.”
About Botswana
According to a report by Rand Merchant Bank (RMB) in February 2020, Botswana is the number one
country for mining investment in Africa. “Botswana ranks the highest due to political stability and security,
low trade barriers and investor certainty regarding protected areas.” states the RMB report.
Surveying 66 emerging global economies in during the Covid-19 pandemic, The Economist (May 2, 2020
issue) rated Botswana number one for financial strength, ahead of Taiwan and South Korea. Botswana is
the oldest democracy in Africa since gaining inde pendence as a representative democratic republic in
September 1966. Since independence, Botswana has had one of the fastest growth rates in per capita
income in the world to become an upper-middle income country with a high level of economic freedom. It
is considered one of the most investment friendly countries on the continent.
About Red Oak Mining Corp.
Red Oak Mining Corp. is a publicly listed and traded company under the trading symbol ROC.H. The
Company’s objective is to leverage the Board and Management’s experience and acquire assets within the
mining sector. Emphasis is on elements that are in growing demand due to increasing growth in the global
battery electric vehicle market.
For further information please contact:
Jay Roberge, CEO & Chairman
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of
the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release contains "forward looking st atements" within the meaning of applicable Canadian
securities legislation. Forward looking statements are necessarily based upon a number of estimates and
assumptions that, while considered reasonable by management, are inherently subject to significant
business, economic and competitive uncertainties and contingencies. Forward looking statements in this
press release include that we can complete our acquisi tion of Metrock; that we can complete the Private
Placement; and that we close the Transaction and continue its business going forward. Forward looking
statements involve known and unknown risks, uncertai nties and other factors that may cause actual
financial results, performance or achievements to be materially different from the estimated future results,
performance or achievements expressed or implied by those forward looking statements and the forward
looking statements are not guarantees of future performance. Red Oak’s ability to complete the Transaction
and successfully conduct the business currently conducted by Metrock is subject to a number of conditions,
any of which are outside of Red Oak’s control; includi ng that the Private Placement is not attractive to
investors for any reason; that regulators or other factors slow down our intended timing; and exploration
costs may increase dramatically or have been underes timated for the size and scope of the project. Red
Oak disclaims any obligation to update or revise any forward looking statements, whether as a result of
new information, events or otherwise, except as required by law.