Rogue Stone Update: Finalized Purchase Terms for the Orillia Quarry, Bobcaygeon Received Final Approval and Sales Continue
Rogue Stone Update: Finalized Purchase Terms for the
Orillia Quarry, Bobcaygeon Received Final Approval and
Sales Continue
TORONTO, ON / ACCESSWIRE / November 21, 2019 / Rogue Resources Inc. (TSX-
V:RRS):
• The Orillia Quarry is permitted to produce 20,000 tonnes per year and has been in
continuous operation for more than 25 years. A $25K advance deposit will be held in
escrow from December, with anticipated closing in early March.
• Acquisition remains subject only to the transfer of the permit, payment of the remainder
of the Purchase Price and final approval of the TSXV.
• Rogue has completed the Permit Transfer and received Final Approval from the TSXV
for the Bobcaygeon Quarry
• Mobilization of equipment, staffing and operations continue at Bobcaygeon Quarry with
ongoing sales.
TORONTO, ON / ACCESSWIRE / November 21, 2019 / Rogue Resources Inc. (TSX-
V:RRS) ("Rogue" or the "Company") is pleased to announce it has now finalized acquisition
terms (the "Agreement") to acquire 100% of the Speiran Quarry (east of Orillia, Ontario), also
referred to as the "Orillia Quarry," which was first announced in an August 12, 2019 press
release from several Ontario-based private companies (the "Sellers"). This will be Rogue's
second operating asset in its Limestone business, referred to as "Rogue Stone".
The Sellers shutdown 2019 operations at the Orillia Quarry last week, to prepare for the winter
season. Based on the Agreement, Rogue expects to close the acquisition March 2, 2020 (the
"Closing"), and Rogue Stone plans to immediately reopen operations for the spring 2020
landscape stone season. Based on existing client relationships (see August 26, 2019 press
release) Rogue Stone plans to ramp up operations quickly and soon target the annual permitted
volume of 20,000 tonnes per year.
"Finalizing terms on Orillia and locking us in to be selling that stone for next spring is an
exciting next step for Rogue and helps as we develop this new business. Rogue expects this
acquisition will allow us to tap into sources of less dilutive financing," said Sean Samson,
President and CEO of Rogue. "I am pleased with our progress at Rogue's Bobcaygeon Quarry
and operations over our first couple weeks, sales continue to go well there and I expect to have
an additional update on Rogue's continued financing efforts over the upcoming weeks."
Final Terms for Rogue's Acquisition of the Orillia Quarry
Rogue anticipates completing a final inspection of the Orillia Quarry before November 30, 2019.
The consideration payable to the Sellers by Rogue for the Orillia Quarry acquisition consists of:
• $25,000 deposit to be paid into escrow within 15 days of the final inspection
• Cash payment at closing (the "Closing") of $1,355,000.
This consideration includes all inventory at the Orillia Quarry and on-site equipment. Separately,
Rogue is acquiring ~$240,000 of heavy equipment from one of the Sellers.
Rogue's acquisition of the Orillia Quarry remains subject to the transfer of the permit and final
approval of the TSX Venture Exchange (the "TSXV").
Project Financing for the Acquisition
As previously announced, Rogue has secured a term loan (the "Term Facility") with a major
Canadian bank ("Bank"), secured against the Orillia Quarry (see August 12, 2019 press release).
The Term Facility is for 50% of the consideration (including equipment) repayable monthly over
a 60-month term. It is subject to an existing general security agreement with the bank and a debt
service coverage ratio covenant to be measured on an annual basis, based on a ratio of a measure
of earnings to interest expense and scheduled principal payments. The Term Facility carries a
fixed interest rate of 5.25%, payable monthly based on the proportional amount outstanding. The
full amount will be drawn at Closing and the initial monthly payment will be due 30 days from
drawdown. Rogue is also exploring options for further debt, potentially through a mezzanine
facility (potentially secured with a secondary security against the Bobcaygeon Quarry or against
one of the other assets in the Company's portfolio).
The final structure for financing will be subject to the approval of the TSXV.
Private Placement Extension
The Company is also pleased to announce that the TSXV has granted Rogue an extension until
December 20, 2019 to close additional tranches of its private placment, if any.
Details of the Orillia Quarry
The Orillia Quarry consists of privately owned parcels representing approximately 81 hectares,
located approximately 20 km east of the town of Orillia and 140 km northeast of Toronto. The
quarry currently has a Class B Aggregate License to extract up to 20,000 tonnes of Natural Stone
per year and produces Armour Stone, Steps and Flagstone. The quarry permit covers an area of
approximately 15.8 hectares (158K m2) allowing for extraction of natural stone to the ground
water table that is estimated to range from 3 to 7 m from the current quarry floor. The Orillia
Quarry has been in continuous operation for more than 25 years and Rogue has conducted
extensive due diligence, including the review of financial data from the Seller's audit firm.
Rogue disclosed on August 12 2019 historical unit economics over the past five years and third-
party appraisal (from June 10, 2019). As part of internal due diligence Rogue conducted limited
diamond drilling, which provided samples of the underlying limestone units and helped to verify
the continuation of marketable material below the pit floor.
Bobcaygeon Quarry Update
The Company continues operations on the Bobcaygeon Quarry, has now sold all of the existing
inventory available at the site and begun sales of new limestone product, excavated from the
quarry floor. Rogue Stone has a team of 3-4 operators at the Bobcaygeon Quarry, working daily
on heavy equipment (including excavators and loaders), preparing the site for rampup and also
loading flatbed road-trucks with sales almost daily. Payments have been received from clients for
the initial sales.
Rogue comment regarding "Companion Policy 43-101CP, 4.2(6) - Production Decision"
The work completed on both the Bobcaygeon and Orillia Quarries is, at this stage, preliminary in
nature and the limited drill data and exploration work are too speculative geologically to have
economic considerations applied to them that would enable them to be categorized even as
Mineral Resources. Rogue does not intend to complete a Pre-feasibility or Feasibility Study of
Mineral Reserves demonstrating economic and technical viability before a decision to proceed
with further investment into either quarry. Projects that are based on a production decision
without a feasibility study of mineral reserves demonstrating economic and technical feasibility
have increased uncertainty and economic and technical risks of failure associated with its
production decision. This potential decision would be based on past production performance
(and readers are warned that previous results are not an indication of future results), the results of
negotiated cost estimates as well as the securing of supply contracts for the limestone products
from either quarry. Among the risks associated with the quarries and with any development
decision to proceed into further production and/or restarting production for next season is the
possibility that the quarry will not be economically or technically viable and/or that development
timetables, cost estimates and production forecasts may not be realized.
About Rogue Resources Inc.
Rogue is a mining company focused on generating positive cash flow. Not tied to any
commodity, it looks at rock value and good grade deposits, in good jurisdictions. In addition to
Rogue Stone, the Company remains focused on advancing its Quartz business at its Snow White
Project in Ontario and the Silicon Ridge Project in Québec, unlocking value from its Timmins
assets plus identifying, acquiring, advancing and eventually operating additional projects or
mines that meet its criteria.
For more information visit www.rogueresources.ca.
Qualified Person
These projects will be under the direct supervision of Paul Davis, P.Geo., VP, Technical and
Director of the Company and a Qualified Person ("QP") as defined by National Instrument 43-
101. The QP has approved the scientific and technical content of this release
For additional information regarding this news release please contact:
Sean Samson
+1-647-243-6581
Cautionary Note Regarding Forward-Looking Statements:
This news release contains certain statements or disclosures relating to the Company that are
based on the expectations of its management as well as assumptions made by and information
currently available to the Company which may constitute forward-looking statements or
information ("forward-looking statements") under applicable securities laws. Forward-looking
statements are statements that are not historical facts and are generally, but not always,
identified by the words "expects," "plans," "anticipates," "believes," "intends," "target,"
"estimates," "projects," "continue," "possible," "potential" and similar expressions, or are events
or conditions that "will," "would," "may," "could" or "should" occur or be achieved.
In particular, but without limiting the foregoing, this news release contains forward-looking
statements pertaining to the following: condition of the Orillia Quarry; closing of acquisition of
the Orillia Quarry; securing financing for the Orillia Quarry; sales from the Orillia Quarry;
operations at the Bobcaygeon Quarry; sales from the Bobcaygeon Quarry; debt financing.
The forward-looking statements contained in this news release reflect several material factors
and expectations and assumptions of the Company including, without limitation: business
strategies and the environment in which the Company will operate in the future; commodity
prices; exploration and development costs; mining operations, drilling plans and access to
available goods and services and development parameters; regulatory restrictions; the ability of
the Company to obtain applicable permits; activities of governmental authorities (including
changes in taxation and regulation); currency fluctuations; the global economic climate; and
competition.
SOURCE: Rogue Resources Inc.