Ram Resources revises terms for remaining interest

THE BOURSE WHISPERER:    Ram Resources has signed a non-binding Memorandum of Understanding with the minority shareholders of Greenland Resources for the remaining interest in Motzfeldt project in Southern Greenland.

Greenland Resources is a United Kingdom based company, which holds the Motzfeldt project, of which Ram already holds 51%.

The MoU will vary the terms on which Ram may acquire the remaining 49% interest in Greenland Resources, which was approved by shareholders at the company’s general meeting held in August.

The varied terms will provide Ram with an option to acquire the remaining 49% in one stage, as opposed to three as per the current terms, by issuing to the Vendor 200 million fully paid shares in the capital of Ram.

Ram would have 12 months to exercise these new terms.

“The revised terms for acquiring the remaining 49% of GRL, and as a result the remaining 49% of the Motzfeldt project, offer reduced complexity and much greater flexibility over the existing terms,” Ram Managing Director, Mike Drew said in a company release.

“If Ram is able to establish a Mineral Resource at its Aries prospect at the end of the upcoming 2011 field season, a greater focus will be placed on potential development of the Motzfeldt Project.

“We believe that the option of moving to full ownership of the project in one simple transaction will provide better opportunities to introduce a joint venture partner into the project, particularly one who may have existing capability in the processing of complex, multi element concentrates and the extraction of REE oxides.”

In October 2010, Ram entered into a Share Sale and Purchase Agreement with Quayside Services Limited, acting as trustee for Exchange Minerals FZE, Kibe Investments No 3 Limited, Tiwari Limited, Thirlmere Investments Limited, and Marlowe Enterprises Limited, collectively known as the Vendor, in which Ram agreed to acquire, in four stages, all of the issued capital of Greenland Resources.

In the same month Ram completed the acquisition of the initial 51% of the issued capital of Greenland Resources by issuing to the Vendor 150 million fully paid ordinary shares at a deemed issue price of 3 cents each, together with 150 million listed options, in the same class as the existing RMRO options, exercisable at 3 cents each, expiring 30 March 2012.

The proposed variation Ram and the Vendor have entered into, through the MOU, sets out key terms that would provide Ram with a new option to acquire the remaining interest by issuing to the Vendor 200 million fully paid ordinary shares in Ram.

The parties have agreed to work together to negotiate Formal Agreements by 31 May 2011, in line with the key terms as set out in the MOU.