RTL Corp switches to mining services

12/06/2008 - 15:25

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Syringe company RTL Corporation Ltd has shifted its focus to the mining services sector following a deal with Every Day Mine Services Ltd to acquire the intellectual property of a specialised mining equipment.

RTL Corp switches to mining services

Syringe company RTL Corporation Ltd has shifted its focus to the mining services sector following a deal with Every Day Mine Services Ltd to acquire the intellectual property of a specialised mining equipment.

RTL, formerly known as Ritract Ltd, has negotiated a deal to acquire all of the assets and rights to manufacture and market the 'mine mixer', a specialised underground agitator in the mining sector.

Under the deal both RTL and EDMS will establish a formal alliance for the purpose of developing, manufacturing and marketing the equipment domestically and internationally.

Initially, the agreement will see RTL issue EDMS over 49 million fully paid ordinary shares.

A copy of the RTL announcement is pasted below:

ACQUISITION OF INTELLECTUAL PROPERTY RIGHTS

RTL Corporation Ltd (ASX : RTL) is pleased to announce it has entered into a binding agreement to acquire 100% of the intellectual property, assets and rights to manufacture and market a specialised underground agitator for the mining sector known as the Mine Mixer from Every Day Mine Services Limited (EDMS) (ASX: EDS).

The underground specific agitator truck has been developed by EDMS over a number of years and is highly regarded by customers for its specialised safety features developed for underground conditions. EDMS currently operates a fleet of 5 agitators, with the 5th agitator being the design adopted for large scale
commercialisation.

The Mine Mixer is based on the JCB series of articulated off-road dump trucks that have been designed and modified specifically for use by:

- Underground hard rock and large coal mines;

- Tunnelling applications; and

- Above ground use in steep terrains.

Under the agreement, RTL and EDMS will establish a formal alliance for the purpose of developing, manufacturing and marketing the Mine Mixers domestically and internationally.

The acquisition of this intellectual property portfolio is consistent with RTL's stated objectives of pursuing acquisitions that have a strategic fit or will otherwise add value to Shareholders.

The initial consideration payable by RTL to EDMS for this acquisition is the issue of 49,250,000 fully paid ordinary shares. This issue will be completed using the existing 15% placement facility available to RTL.

The initial acquisition is subject to a number of conditions precedent including completion of due diligence by RTL on the Mine Mixers business and assets by 15 June 2008.

Thereafter, subject to shareholder approval, RTL will issue three classes of Performance Shares to EDMS as follows:

a) 50,000,000 Class A Performance Shares convertible into 50,000,000 fully paid ordinary shares in RTL upon selling or renting the first four (4) Mine Mixers within a 12 month period from the date of issue of the initial share
consideration;

b) 75,000,000 Class B Performance Shares convertible into 75,000,000 fully paid ordinary shares in RTL upon selling or renting a further ten (10) Mine Mixers again within a 12 month period from the date of issue of the initial
share consideration; and

c) 75,000,000 Class C Performance Shares convertible into 75,000,000 fully paid ordinary shares in RTL upon selling or renting a further ten (10) Mine Mixers (being a total of 24 Mine Mixers) within a 18 month period from the
date of issue of the initial share consideration.

Update on Existing Business

As outlined in the Prospectus dated 20 March 2008, the Board is reviewing the previous strategy implemented by RTL with a view to identifying the key strengths and weaknesses of the Ritract safety device.

RTL views the acquisition of Mine Mixers as an exciting early stage opportunity for the Company.

RTL has sufficient cash reserves to continue work on the Ritract safety device as well as being able to progress the Mine Mixers opportunity.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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