Red Rock Announces Closing of Private Placement, Reactivation on TSX Venture Exchange and Granting of Stock Options

CALGARY, Alberta, June 08, 2017 (GLOBE NEWSWIRE) —  

NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRES

Red Rock Energy Inc. (NEX:RRK.H) (“Red Rock” or the “Corporation“) is pleased to announce that the TSX Venture Exchange (the “TSXV“) has granted final approval regarding the NEX reactivation and concurrent application for graduation to Tier 2 of the TSXV (the “Reactivation“). Effective Monday, June 12, 2017, trading in the Corporation’s common shares will commence on the TSXV under the trading symbol “RRK”.

In connection with the Reactivation, the Corporation completed a non-brokered private placement of 20,770,332 common shares (“Common Shares“) at a price of $0.10 per Common Share for gross proceeds of $2,077,032 (the “Offering“). The Common Shares issued pursuant to the Offering are subject to a four month hold period that expires on October 8, 2017. Following the completion of the Offering, the Corporation has 35,770,332 Common Shares issued and outstanding.  Net proceeds from the Offering will be applied towards the commissioning of a new work program on one of the Corporation’s existing properties, or such other opportunity as may present itself to the Corporation.

Following the completion of the Reactivation, the directors of the Corporation are Jose Francisco Arata, Marino Ostos and Krishna Vathyam, and Krishna Vathyam will continue to serve as Interim Chief Executive Officer and Bruce Cameron will continue to serve as Interim Chief Financial Officer.  Sandy L. Loutitt and David Pinkman have each resigned from the board of directors of the Corporation.  Please refer to the press release of the Corporation dated May 4, 2017 for further information regarding the directors and officers of the Red Rock.

Directors and officers of the Corporation subscribed for an aggregate total of 3,250,000 Common Shares under the Offering. The Corporation has determined that exemptions from the various requirements of TSXV Policy 5.9 and Multilateral Instrument 61-101 are available for the issuance of the Common Shares to such directors and officers (Formal Valuation – Issuer Not Listed on Specified Markets; Minority Approval – Fair Market Value Not More than 25% of market Capitalization).

The Corporation issued an aggregate total of 500,000 Common Shares at a price of $0.10 per Common Share to certain finders as payment of finder’s fees in connection with the restructuring plan of the Corporation.

Early Warning Information

Jose Francisco Arata subscribed for 1,075,000 Common Shares under the Offering.  Mr. Arata now owns a total of 3,575,000 Common Shares and 2,500,000 warrants of the Corporation, representing approximately 9.9% of the issued and outstanding voting securities of the Corporation on a non-diluted basis and 15.9% of the issued and outstanding securities of the Corporation, assuming exercise of the warrants held by Mr. Arata.

Marino Ostos subscribed for 1,075,000 Common Shares under the Offering.  Mr. Ostos now owns a total of 3,575,000 Common Shares and 2,500,000 warrants of the Corporation, representing approximately 9.9% of the issued and outstanding voting securities of the Corporation on a non-diluted basis and 15.9% of the issued and outstanding securities of the Corporation, assuming exercise of the warrants held by Mr. Ostos.

Krishna Vathyam subscribed for 1,000,000 Common Shares under the Offering.  Mr. Vathyam now owns a total of 3,500,000 Common Shares and 2,500,000 warrants of the Corporation, representing approximately 9.8% of the issued and outstanding voting securities of the Corporation on a non-diluted basis and 15.7% of the issued and outstanding securities of the Corporation, assuming exercise of the warrants held by Mr. Vathyam.

Wuilian Mauco subscribed for 1,000,000 Common Shares under the Offering.  Mr. Mauco now owns a total of 3,500,000 Common Shares and 2,500,000 warrants of the Corporation, representing approximately 9.8% of the issued and outstanding voting securities of the Corporation on a non-diluted basis and 15.7% of the issued and outstanding securities of the Corporation, assuming exercise of the warrants held by Mr. Mauco.

The Common Shares were acquired by Mr. Arata, Mr. Ostos, Mr. Vathyam and Mr. Mauco for investment purposes and either Mr. Arata, Mr. Ostos, Mr. Vathyam or Mr. Mauco may increase or decrease his beneficial ownership or control depending on market or other conditions. Copies of the Early Warning Reports will be filed on www.SEDAR.com.

Stock Options

The Corporation also announces that it has issued an aggregate total of 3,500,000 stock options to its directors, officers, and consultants pursuant to its stock option plan, of which 2,500,000 were granted to directors and officers. The options have an exercise price of $0.10 per Common Share and will expire five years from the date of issuance. The stock option grant is subject to regulatory approval. The Corporation has determined that exemptions from the various requirements of TSXV Policy 5.9 and Multilateral Instrument 61-101 are available for the issuance of the stock options to such individuals (Formal Valuation – Issuer Not Listed on Specified Markets; Minority Approval – Fair Market Value Not More than 25% of market Capitalization).

Reader Advisory

Certain information set forth in this news release contains forward-looking statements or information (“forward-looking statements“). By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond the Corporation’s control, including the impact of general economic conditions, industry conditions, currency fluctuations, operational risks, competition from other industry participants, stock market volatility, and the ability to access sufficient capital from internal and external sources. Although the Corporation believes that the expectations in its forward-looking statements are reasonable, its forward-looking statements have been based on factors and assumptions concerning future events which may prove to be inaccurate. Those factors and assumptions are based upon currently available information. Such statements are subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward-looking statements. Accordingly, readers are cautioned not to place undue reliance on the forward-looking statements, as no assurance can be provided as to future results, levels of activity or achievements. Risks, uncertainties, material assumptions and other factors that could affect actual results are discussed in our public disclosure documents available at www.sedar.com. Furthermore, the forward-looking statements contained in this document are made as of the date of this document and, except as required by applicable law, the Corporation does not undertake any obligation to publicly update or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary statement.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States.  The offered securities mentioned in this press release will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act“) and may not be offered or sold within the United States or to, or for the account or benefit of U.S. persons except in certain transactions exempt from the registration requirements of the U.S. Securities Act.

This new release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.

CONTACT: For further information, contact:

Krishna Vathyam                                                         
Interim Chief Executive Officer                                  
+1 403 538 5471
[email protected]      

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