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September 4, 2007
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Bell Resources, Grandcru Resources & Rogue River Resources to Complete
Three-Way Business Combination
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VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 4, 2007) - Bell Resources Corporation ("Bell") (TSX VENTURE:BL) is pleased to announce that it has agreed to enter into a business combination with Grandcru Resources Corporation ("Grandcru") (TSX VENTURE:GR) and Rogue River Resources Corp. ("Rogue River"), whereby the three companies will amalgamate to form one company (the "Resulting Company") in accordance with the following parameters:
- each outstanding share of Bell will be exchanged for one new share of the Resulting Company;
- each outstanding share of Grandcru will be exchanged for 0.25 of a share of the Resulting Company; and
- each outstanding share of Rogue River will be exchanged for 1.8 new shares of the Resulting Company.
Upon closing of the business combination transaction the outstanding share capital of the Resulting Company will be consolidated on a two share for one new share basis.
The amalgamation of the three companies is in line with the respective companies' board's strategy and the highlights of this business combination include the following:
- Consolidation of multiple copper assets
- Consolidation of the technical team
- Consolidation of management and the focus of management
- Creating a true copper footprint in the Americas (Canada, USA, Mexico and Chile)
- All three companies to benefit from the exploration potential of each other's assets
- All three companies to benefit from the near term production potential and projected cash flows of Rogue River's La Balsa project
- The Resulting Company presents a significant proposition for institutional funding.
"The consolidation of assets and people benefits all stakeholders with the creation of a near term copper producer with a strong footprint of highly prospective assets in the Americas. As well, this combination represents a significant proposition for institutional funding and sponsorship, a vital component in the building of a true mining company," states W. Glen Zinn, President and CEO.
Upon completion of the transaction, subject to shareholder and regulatory approval, the parties will amalgamate as a British Columbia corporation under the name "Bell Resources Corporation" or such similar name as the parties may agree upon.
It is expected that the proposed transaction will occur by way of a plan of arrangement or amalgamation subject to review of tax, accounting, corporate and securities law issues. The proposed transaction has been approved by the Board of Directors of each of Bell, Grandcru and Rogue River and will be subject to receipt of regulatory approval, including that of the TSX Venture Exchange and the shareholder approval of Bell, Grandcru and Rogue River.
The new company will be focused on copper exploration, development and production in the Americas with specific copper operations in British Columbia, the Southwestern US, Mexico and Chile.
Bell (TSX VENTURE:BL) is focused on copper exploration opportunities in the Americas. Specifically, these copper projects are located in British Columbia (the Granduc Mine) and the Southwestern US. A complete overview of Bell's projects can be viewed at www.bellresources.com. Bell presently has issued and outstanding share capital of 59,527,465 common shares with 8,449,222 stock options and common share purchase warrants available for exercise. In addition, Bell may issue additional common shares, stock options and/or other convertible securities prior to the completion of the proposed transaction and all such securities would be subject to the proposed transaction.
Grandcru (TSX VENTURE:GR) is focused on both precious metals and base metals exploration opportunities in the Americas. Specifically, these projects are located in Northern Ontario, Nevada, Mexico and Chile. A complete overview of Grandcru's projects can be viewed at www.grandcruresources.com. Grandcru presently has issued and outstanding share capital of 68,771,268 common shares with 20,448,824 stock options and common share purchase warrants available for exercise. In addition, Grandcru may issue additional common shares, stock options and/or other convertible securities prior to the completion of the proposed transaction and all such securities would be subject to the proposed transaction.
Rogue River Resources Corp. is a private British Columbia corporation focused on the development toward production of the La Balsa copper project, located 14 kilometres east of the Port of Lazaro Cardenas in the State of Michoacan, Mexico. Rogue River has completed payment on US$3.9 million of the $4.7 million in installment payments (final payment due in September 2007) to earn a 100% interest in the La Balsa project, subject to a 1% NSR over a portion of the project (50% of which can be purchased for US$1 million). Rogue River presently has issued and outstanding share capital of 32,410,333 common shares with 18,545,000 stock options and common share purchase warrants available for exercise. In addition, Rogue River may issue additional common shares, stock options and/or other convertible securities prior to the completion of the proposed transaction and all such securities would be subject to the proposed transaction. Rogue River also has an outstanding US$3 million unsecured convertible debenture issued to RAB Special Situations (Master) Fund Limited (the "RAB Debenture") which is convertible into common shares at the lesser of US$0.75 or a 25% discount to the deemed price at which Rogue River completes an initial public offering or business combination resulting in Rogue River becoming part of a public company (a "Going Public Transaction").
The La Balsa project is being developed for near-term copper production in an area of Mexico which provides considerable infrastructure, including the following:
- Power - existing to site and quoted @ $0.08 per Kwh
- Road - 14 km to major port of Lazaro Cardenas
- Rail - major railway borders the property
- Water - reservoir within 1 km from the property
- Labour - the region is home to significant iron ore mining operations
Since January, 2006 Rogue River has completed the following on the La Balsa project:
- Funded privately for approximately US$13 million
- Currently US$2 million in working capital (pending close of funding below)
- Funded/budgeted through Definitive Feasibility
- Surface rights have been acquired
- SXEW plant has been acquired (awaiting shipment from Arizona)
- Over 300 holes drilled to date
- Baseline environmental studies complete
- Evaluating mine design and construction
- 43-101 Technical Report pending
- Internal pre-feasibility due Q4 2007
With regional infrastructure in place, low labor costs, low ore haul cost, low stripping ratios and high metal recoveries, the La Balsa project is anticipated to be a low cost high margin production copper asset. Along with the plan to near-term production, the La Balsa project also provides further significant exploration potential:
- Drilling (ongoing since April 2006) continues to locate significant copper mineralization near the known deposits that have the potential to add to the identified copper inventory.
- Exploration to date has covered less than one half of the La Balsa property package and field teams continue to investigate additional copper, molybdenum, silver, gold and iron anomalies identified within the claim block.
- Two kilometers west of the three known deposits, drill testing is proceeding on a new copper system identified in early 2007 and not included in the current copper inventory.
- Geologic and geochemical characteristics including alteration, metal zoning, and breccia distribution point to the southwest as the potential deep source of copper mineralization.
- A 2007 aeromagnetic survey identified two elongated magnetic lows, over two kilometers long, believed to represent magnetite-destructive alteration in the monzonite porphyry system.
For further information on Rogue River Resources go to: http://www.nexvucapital.com/s/RogueRiver.asp
In conjunction with the proposed business combination, Bell has entered into a loan agreement with Macquarie Bank Ltd. (the "Lender") for gross proceeds of CDN$2 million by way of a demand loan advanced under a debenture and general security agreement (the "Loan"). Bell will pay 1% interest per month on amounts outstanding under the Loan until December 31, 2007 and thereafter 2% per month until repayment. The Loan is subject to a fee to the Lender payable, subject to regulatory approval, by the issuance of 215,000 common shares or $100,000 if regulatory approval is not obtained. The proceeds of the loan will be used for continuing exploration programs on Bell's properties and for general working capital purposes.
Further, in conjunction with the proposed merger, Rogue River is proceeding with a convertible loan agreement with Macquarie Bank Ltd. for gross proceeds of CDN$2 million. The proceeds of the loan will be used for continuing development of the company's La Balsa project and for general working capital purposes. The loan will be convertible into common shares at the lesser of Cdn$0.78 and a 25% discount to the deemed price of a Going Public Transaction. In conjunction with the convertible loan Macquarie Bank Ltd. will be issued a warrant to purchase 1,268,754 common shares exercisable at Cdn$1.196 per share for a period of two years and 30 days from the date of the Going Public Transaction.
Further to the merger announcement, Grandcru will be conducting a non-brokered private placement comprising up to ten million common shares at a price of 12.5 cents per common share in the capital of Grandcru. The proceeds of the private placement will be used for continuing exploration programs on Grandcru's mineral properties and for general working capital purposes. Grandcru may pay a finder's fee incidental to the financing in accordance with the policies of the TSX Venture Exchange (the "Exchange"). The private placement is subject to Exchange acceptance.
For the purposes of this news release, the Qualified Person is Timothy Marsh, P.E., PhD, Vice President of Exploration for Rogue River.
Completion of the proposed transaction is subject to a number of conditions, including, but not limited to entering into formal agreements and receipt of all required regulatory and shareholder approvals. There can be no assurance that the proposed transaction will be completed as proposed or at all.
About Bell Resources Corporation
Bell Resources is focused on the exploration and development of a diversified portfolio of North American base metal projects, with the most advanced being the past-producing Granduc Mine. The Company's strategic plan is focused on moving assets toward potential production, while continuing to target new acquisitions based on geological potential and economic viability. For further information on Bell Resources visit www.bellresources.com.
On behalf of the Board of Directors of Bell Resources Corporation
W. Glen Zinn, President and CEO
Forward-looking statements in this release are made pursuant to the 'safe harbor' provisions of the Private Securities Litigation Reform act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
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