Trading Symbol: RRO - TSX-V
Shares Outstanding: 112,127,490
HALIFAX, Dec. 29 /CNW/ - Royal Roads Corp. (RRO-TSX-V) ("Royal Roads" or "Company") announced today that the Nova Scotia Securities Commission ("Commission") has approved a settlement agreement between Royal Roads and staff of the Commission. The settlement related to staff's investigation of the Company's failure to report a material change in a timely manner.
On or about November 18, 2008, one of the directors of the Company became aware that an officer of the Company had made a number of advances to a related company throughout 2008, which amounted to approximately 35% of the Company's market capitalization. The advances were made without the knowledge or consent of any director or any other officer of the Company. In November 2008, the Company became aware that by August of 2008 a material change had occurred which would have required the Respondent to file a material change report and issue a press release. On November 28, 2008, following a number of meetings of the directors of the Company and having regard to the cash position and requirements of the Respondent, the independent members of the board of the Respondent ratified the loan to the related company (all other members of the board conflicted but in agreement) and agreed upon formal terms which included security provisions, the terms of repayment and the charging of interest. On December 1, 2008, the Company disclosed the loan in its interim financial statements and issued a news release advising of the loan and the security arrangements. The shareholders of the Company approved the loan at an annual and special meeting held in June 2009. The loan has since been repaid in full plus interest at 10%.
In the settlement, Royal Roads acknowledges that it acted contrary to the public interest in failing to report the material change in a timely manner. The settlement agreement acknowledges that Royal Roads immediately took steps to make disclosure of the material change once it became known to the directors and other officers of the Company, immediately took steps to identify and correct weaknesses in the Company's internal controls and requested the Company's auditor to test the controls in conjunction with its 2008 year end audit procedures. In addition, the settlement agreement acknowledges that Royal Roads protected the interests of the Company by requiring an extensive security package for the loan and Royal Roads cooperated with staff in its investigation. Royal Roads will pay an administrative penalty of $20,000 under the settlement agreement as well as $1,500 towards the costs of the investigation.
About Royal Roads
Royal Roads is a resource company based in Halifax, Nova Scotia, Canada and is primarily focused on exploring and developing mineral properties in the famous historic Buchans mining camp in central Newfoundland and Labrador, Canada. Acadian Mining Corporation (ADA-TSX) owns 29.18% of Royal Roads.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
SOURCE ROYAL ROADS CORP.
For further information: For further information: Royal Roads Corp.: Will Felderhof, President & CEO; David Felderhof, Vice-President, (902) 444-3637; www.royalroadscorp.ca