VANCOUVER, BRITISH COLUMBIA, Nov 06 (MARKET WIRE) --
Redzone Resources Limited (CNSX: REZ) ("Redzone") is pleased to announce
that a definitive option agreement (the "Agreement") has been executed
between its wholly owned subsidiary Compania Minera Oyamel, S.A. de C.V.
("RZ Mexico") and Minera Teck, S.A. de C.V. ("Teck"), a wholly owned
subsidiary of Teck Resources Limited, pursuant to which RZ Mexico has the
option to acquire an initial 50% interest in the Las Palmas property
located in Mexico's Oaxaca and Veracruz states (the "Property"), as
previously announced in Redzone's press release dated September 16, 2009
(available on SEDAR at www.sedar.com).
Under the terms of the Agreement, RZ Mexico may initially acquire a 50%
interest in the Property (the "50% Option") by making $1,000,000 in
property expenditures by no later than August 31, 2010 and thereafter an
additional $2,000,000 in optional expenditures by no later than August
31, 2012 (collectively the "Expenditures"). Once the Expenditures have
been made, RZ Mexico will earn a 50% interest in the Property subject to
certain options that Teck has retained (the "Teck Options"). The Teck
Options provide for RZ Mexico's 50% interest to be subject to change if
Teck chooses to elect one of the following within 60 days of RZ Mexico
acquiring that interest:
(a) to advise RZ Mexico that Teck is exercising its right to make
optional property expenditures of $3 million within two years thereby
increasing its interest in the Property to 60% and reducing the interest
of RZ Mexico to 40% (the "T-1 Option"); or
(b) to advise RZ Mexico that RZ Mexico will have the sole obligation to
fund any Property expenditures and when it has funded an additional $3
million it will have earned a 100% interest in the Property subject to a
2% NSR. If Teck makes this election, then Teck will have the right to
earn back a 51% interest exercisable at any time up to 60 days after RZ
Mexico has earned its 100% interest by making Property expenditures of
1.5 times RZ Mexico's total expenditures to a maximum of $9 million
within four years (the "T-2 Option"). If Teck earns back a 51% interest
in the Property, then in conjunction with its notice that it has incurred
the requisite expenditures and earned back to a 51% interest it can make
an additional election to earn back an additional 9% interest (for an
aggregate 60% interest) in the Property by making an additional $6
million in Property expenditures over two years (the "T-3 Option").
Redzone has guaranteed to Teck the payment of any expenditures
commitments made by RZ Mexico to Teck in connection with the Agreement.
Following the exercise of any of the 50% Option, T-1 Option, T-2 Option
or T-3 Option, as applicable, Teck and RZ Mexico shall form a joint
venture and shall thereafter contribute to expenditures on the Property
in proportion to their respective interests in the Property, or be
subject to dilution of their respective interests. In the event that the
interest of either RZ Mexico or Teck in the Property is reduced below 10%
at any time, such interest shall be converted to a 5% net profits
royalty. For further details regarding the Property, please refer to
Redzone's press release dated September 16, 2009 as available on SEDAR at
www.sedar.com.
Forward - Looking Statements: Certain information set forth in this news
release may contain forward-looking statements that involve substantial
known and unknown risks and uncertainties. These forward-looking
statements are subject to numerous risks and uncertainties, certain of
which are beyond the control of Redzone, including, but not limited to
the impact of general economic conditions, industry conditions, risks
associated with mining activities, volatility of commodity prices,
currency fluctuations, dependence upon regulatory approvals, the
availability of future financing and exploration risk. Readers are
cautioned that the assumptions used in the preparation of such
information, although considered reasonable at the time of preparation,
may prove to be imprecise and, as such, undue reliance should not be
placed on forward-looking statements.
The CNSX has not reviewed and does not accept responsibility for the
adequacy or accuracy of this release.
Contacts:
Redzone Resources Ltd.
Neil Halldorson
President
(604) 562-2582
Copyright 2009, Market Wire, All rights reserved.
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