VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 10, 2011) - UC Resources Ltd. (TSX VENTURE:UC) ("UC" or the "Company") is pleased to announce that it has entered into a definitive agreement (the "Purchase Agreement") with Freewest Resources Inc. ("Freewest"), a wholly owned subsidiary of Cliffs Natural Resources Inc. (NYSE:CLF)(PARIS:CLF) ("Cliffs"), for Freewest to acquire 100% of the UC owned 55% Joint Venture Interest in the McFaulds Lake area property (the "Joint Venture Interest"), subject to and in accordance with the Joint Venture Agreement dated as of July 26, 2011 (the "Joint Venture Agreement") between KWG Resources Inc. ("KWG"), Spider Resources Inc. (now named Cliffs Chromite Far North Inc.), a wholly owned subsidiary of Cliffs ("Spider"), and UC.
The purchase price payable to UC by Freewest is $6,000,000 CDN ($6 Million), payable by deposit of $850,000 on the signing date followed by the balance on the closing date.
Pre-Emptive Rights of KWG and Spider
KWG and Spider each has a pre-emptive right under the Joint Venture Agreement in respect of the transfer of the Joint Venture Interest on the same terms as set forth in the Purchase Agreement.
Under the Joint Venture Agreement each of KWG and Spider have forty-five (45) days from the date notice is delivered in accordance with the Joint Venture Agreement to notify UC whether it elects to acquire the Joint Venture Interest from UC for the same consideration and on the same terms and conditions as set forth in the notice and the Purchase Agreement. Notice will be sent to each of KWG and Spider forthwith. If either or both of KWG and Spider exercise their pre-emptive rights, then Freewest will not acquire the Joint Venture Interest, and KWG and/or Spider, as the case may be, will acquire the Joint Venture Interest.
The closing of the sale is expected to occur early in the first quarter of 2012.
The Purchase Agreement and the transactions contemplated thereby are subject to the acceptance and approval of the TSX Venture Exchange.
UC Resources Ltd.'s CEO, Gary Monaghan states, "We are pleased with the outcome of this transaction, and believe that McFaulds Lake represents what could be an exceptional play for companies of certain size and ability to fund, drill and exploit this long term resource. The Company values our shareholders and believes, as far as UC is concerned, our focus is best directed in Mexico. Full time concentration on the leveraging of the Company's major assets in Mexico will be the best possible course of action for the Company to take in these markets."
UC Resources is an active explorer of base metals and chromite in the McFaulds Lake area ("Ring of Fire") of the James Bay Lowlands, Ontario, as well as an explorer and producer of precious metals in Mexico.
On behalf of the Board of Directors,
Gary Monaghan, CEO
We seek safe harbour.
