Red Rock Resources

  • Andrew Bell on the major upside potential at Red Rock Resources currently being undervalued by the market (RRR)

    Like many of its peers in the commodities space, Red Rock Resources (LSE:RRR) has endured a tough 12 months, with a widespread, macro-driven sector downturn pushing its shares from 0.82p to their current 0.5p. However, unlike many of its contemporaries, the £3.4m firm has managed to generate enough revenues over this period to cover its operating costs- thanks largely to its valuable position in manganese producer Jupiter Mines. With Red Rock now looking to build on its solid foundation with major developments at its direct project stakes in the DRC and Kenya, we caught up with CEO Andrew Bell to hear where he thinks shares could go next.

    Manganese opportunity

    One of Red Rock’s most critical holdings is its long-standing c.1pc stake in Jupiter Mines, a manganese producer that re-listed in Australia last April in an A$240m IPO. Jupiter’s flagship asset is its 49.9pc-held Tshipi Borwa open-pit manganese mine in South Africa’s Kalahari Basin, which entered production in early 2013. Since then, the mine – one of the largest of its kind in the world with a 432Mt resource base - has more than doubled its production and export volumes to over 3Mt of manganese ore annually.

    The project currently boasts a maximum capacity of 3.6Mt per annum and a 100-year life of mine – both with the potential for expansion. As well as being one of the only manganese mines in the market, Tshipi also boasts some of the lowest operating costs in its space at a current average of $2.18 per dry metric tonne.

    Operations at Tshipi (Source: Company)

    Alongside Jupiter’s robust portfolio, the A$744m business offers Red Rock a reliable revenue stream owing to its progressive payout policy. Indeed, Red Rock received income from dividends and share sales totalling A$1.47m for Jupiter’s financial year to 28 February 2019. Meanwhile, earlier this month, Red Rock revealed that Jupiter achieved a payout ratio of 90pc in that year, far exceeding its target ratio of 70pc.

    Such payouts look set to continue, as well, with the business recently revealing that sales so far in its current financial year are in line with its last 12-month period, with a ‘healthy dividend’ expected in November. The firm has been somewhat boosted recently by a substantial increase in its share price, helped along by the rise in Chinese steel production in combination with an ongoing fall in domestic manganese production.

    In an update released earlier this month when Jupiter had risen 71pc since end-2018 to A40.41 a share, Red Rock revealed that its stake was worth over £4.2m – a premium of nearly a third to its own £3.3m valuation. Bell tells us that the combination of value and income offered by Red Rock’s stake in Jupiter, alongside the opportunity for liquidity, make it something of an insurance policy for the company.

    ‘The high yields we get from Jupiter are sufficient to cover our overheads, and the value of our stake more than underpins our own market cap. We also have something that can be converted into cash if necessary, meaning we are protected from running out of money – something essential for AIM companies,’ he says. ‘When this is combined with a genuinely world-class asset that has excellent management, low costs, and strong performance in place to back it up, it is a pretty difficult call to sell. We are delighted with Jupiter’s performance.’

    Bell also believes that Red Rock’s stake in Jupiter is worth holding due to the growing value opportunity he sees in the manganese market. As alluded to, 90pc of the world’s manganese is currently used as an alloying agent to increase both the strength and flexibility of steel. However, Bell believes that the metal will – like many of its peers – soon enjoy a sizeable boost from the electric battery market.

    Manganese is cheaper to mine than many metals currently used in the cathodes of electric batteries like nickel and cobalt.  As a result, electronic battery manufacturers are now looking at using more of the metal in their products moving forward. Perhaps most notably, last year saw Reuters report that German chemical giant BASF had revealed plans to ramp up the manganese content in its cathode materials to 70pc and reduce nickel content to 20pc by 2021. It is thought that the move, which prompted a considerable rise in Euro Manganese’s share price, could push costs for battery production down from well over $100 per kilowatt-hour (kWh) to around $40 per kWh.

    According to Bell, the benefit of an industry shift towards manganese would be two-fold. Firstly, a substantial increase in manganese demand would push up the price of the metal as supplies run out, and mining companies are forced into higher-cost underground operations to keep stocks topped up.

    Secondly, if the metal were to become a stalwart component of all electric batteries, then its exposure to the forecast explosion in electric vehicle (EV) usage would also increase. The world’s fleet of EVs grew by 54pc to about 3.1m in 2017 and is expected to hit 125m by 2030, according to the IEA. Likewise, JP Morgan forecasts that EVs will account for 30pc of all global vehicle sales 2025 – this compares to 1pc in 2016.

    This trend has helped many more well-known battery metals like lithium and copper soar in price over recent years. If manganese were to join this group, then Bell believes that Jupiter would be well set to benefit – with the firm claiming that Tshipi alone is responsible for 9pc of the world seaborne market for the metal.

    ‘Jupiter is a very attractive business over the long term, and my view is that it is currently highly undervalued due to – among other factors - the potential offered by the electric battery market,’says Bell. ‘As people begin to see that, it might well be that - within a few years- a large company will see it as a strategic acquisition. It wouldn’t be surprising if that happens, and when it does, Red Rock will be very well positioned with its considerable holding.’

    DRC upside

    Beyond its investment in Jupiter, Red Rock also owns numerous direct project holdings. These include a 50.1pc interest in a DRC-focused joint venture called VUP, which the firm bought in exchange for a $700,000 cash payment and a £490,000 share payment last year.

    The JV holds three copper and cobalt prospective exploration licences in the Katanga segment of the Central African Copperbelt, where it is surrounded by active majors like Glencore and FE Limited. The first of these licences is Kamukongo, which covers 5km2within a structural trend called Kansuki and Kamikongwa – host of some of the most productive high-grade cobalt-copper deposits in the Katanga region. The second is Kasombo South, which lies at the mid-eastern part of the Kasonta anticline where numerous mines have produced considerable volumes of both copper and cobalt in the past.

    Red Rock’s licence locations in the DRC (Source: Company)

    However, the third and most advanced prospect is Musonoi. Covering part of the ‘Musonoi Super Deposit’, this licence sits in a district called the Kolwezi Klippe that boasts 80 years of mining history and supplies a considerable portion of the globe’s annual cobalt requirements. According to Red Rock, typical grades in the area range from 3-5pc copper and 0.5-1pc cobalt. Perhaps most notably, the region contains Glencore’s Katanga project, which remains the world’s largest cobalt mine despite being due to enter care and maintenance – something that Bell expects to increase cobalt prices.

    Musonoi was drilled in the 1930s and 1940s with a cut-off grade of 2.5pc copper. Production took place down to a maximum depth of 105m, and the pit was partially backfilled after production ceased. However, Red Rock believes that high-grade ore, alongside additional orebodies, could remain in place.  Its consultant geologists have provisionally identified deposit potential of up to 400,000ts of contained copper and more than 25,000ts of cobalt at Musonoi based on a review of historical work and reports.

    This year has seen the VUP JV begin work to build on this potential, creating 3D models and identifying and assessing the old drill core from previous exploration activity. Bell tells us that this work is the first stage of validating the results of historical drilling, something that will allow the JV to bring the existing non-compliant resource to the modern ‘JORC’ standard. More updates are expected over the coming quarters.

    Changing views

    As it stands, around two-thirds of the world’s cobalt is mined in the Democratic Republic of Congo. What’s more, the country’s resources don’t appear to be running out any time soon. Indeed, one estimate has valued the nation’s untapped resources of cobalt, copper, diamonds, gold, and other minerals at an impressive $24trn.

    In spite of this, the DRC has long been associated with geopolitical uncertainty and human rights issues. Such problems have led many companies to shy away from the country in search of an alternative jurisdiction where they believe they are less likely to face disruption. Bell argues that, while the State does present issues, it is an essential location for a company that claims to operate in the battery metals space to have a footing. Likewise, he adds that – now the country has entered a period of peace following the safe passing of recent elections – historical precedent indicates that it can continue its long-term move towards stability.

    ‘We do not think you can claim to be in battery metals without being in cobalt or copper as electric vehicles contain significant amounts of both- especially relative to a conventional car. The DRC is a major jurisdiction for both, containing huge prospect with significant grades relative to their cost, so it is really worth approaching from an economic perspective,’he says.

    ‘For a long time, the DRC lagged the rest of Africa in terms of development. But there is progress, with a great increase in tertiary education, the introduction of a new mining code, and growth in the number of lawyers. The legal system is not yet perfect, but you can see the progress. All the world has made great strides over the last several decades, and the DRC is not exempt from that. It has just been held back by political issues. In periods of peace, it has been improving. We need to get that message across to investors – what was true 20 years ago is not necessarily true now.’

    Value in Kenya

    Another critical direct project interest for Red Rock is its 100pc-owned Migori gold project in Kenya. The asset contains an initial 1.2Moz gold resource at 1.3g/t over five areas within its Mikei shear zone, along with significant upside opportunity.  Indeed, it is analogous to producing Tanzanian greenstone gold belts and 30km north of Acacia Mining’s North Mara gold operations. In February last year, Acacia announced that it had found ‘one of the highest-grade gold projects in Africa today’ at the site, reporting a 1.31Moz resource at 12.1g/t.

    Location of the Migori gold project (Source: Company)

    Back in 2014, Red Rock commissioned a preliminary technical and economic assessment for one part of Migori, constituting the first stage of a feasibility study.

    However, shortly afterwards, the ministry of mining in Kenya announced plans to terminate the special licences that had been granted to cover the asset. Red Rock fought this ruling for several years before finally announcing the settlement of legal proceedings in October 2018. The company, alongside its local associate, has now applied for the licences to be regranted- something that Bell expects to occur imminently.

    ‘We hope that, before long, we will be able to announce that we have the licences back,’he says. ‘We are at the final stages, and we have four or five teams working on the ground just to get proper mapping and landowners consents in place in preparations. Migori is extremely prospective. The 1.2MMoz is just a starting resource, we are looking at work to increase this and whether we should JV with a bigger company.’

    Value opportunity?

    Moving on from Red Rock’s portfolio, Bell tells us that the firm is currently generating between $800,000 and $1m a year in revenues – a figure that more than covers operational costs. Bearing this in mind, he argues that the business currently looks undervalued with a current market cap of £3.38m.

    ‘Firstly, Jupiter is considerably undervalued, and it is still worth about 30pc more than our market cap on its own. Beyond that, if we make progress in Kenya, then the value of that asset on even the most conservative of assumptions is also considerably higher than our market value. Finally, the Congolese assets are potentially powerful. We need to convert those to a JORC resource, but, if we can, it will be truly massive relative to our market cap,’he says. ‘By coming into our stock now, I think you have three attractive growth assets, the value of which will come over time. Any one of the three alone would make us cheap, but when you put them together, and you assume we are going to keep the company simple and costs down, then many would find it an attractive proposition.’

    As Bell states, Red Rock’s three major assets – Migori, its DRC JV, and its position in Jupiter – each present an upside opportunity that outweighs the firm’s current market capitalisation. It is now be down to the firm to deliver on its ambitious plans, with any positive updates potentially presenting the opportunity for a re-rate.

    Author: Daniel Flynn

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    Catalyst Information Services Ltd, the owner of MiningMaven.com, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    Catalyst Information Services Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.

    MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

     

  • MiningMaven Podcast 121 - with Andrew Bell of Red Rock Resources (RRR)

     

    Today’s guest on the MiningMaven podcast is Andrew Bell, chairman of Red Rock Resources (LSE:RRR). Red Rock has a wide portfolio of assets and investments including the Migori gold project in Kenya, copper-cobalt projects in the DRC and an investment in Jupiter Mines, currently worth £4.25m. Andrew discusses the firm’s portfolio of assets, how its holding in Jupiter Mines underpins the company, and the fact that the Market Cap of Red Rock is currently at a substantial discount to the value of its total assets.

    This interview was recorded on 6th August 2019.

     All opinions expressed are those of MiningMaven and the respective guests, unless otherwise stated and should not be construed as investment advice or a recommendation to buy shares in any featured Company. From time to time MiningMaven principals may take equity positions in companies featured. Listeners are advised to do their own extensive research before buying shares which, as with all small cap exploration stocks, should be viewed as high risk. Investors should also seek the advice of a qualified investment adviser or stockbroker as they deem appropriate. MiningMaven.com is a trading division of Catalyst Information Services Limited. Registered in England no. 06537074 (Registered Office Address 3rd Floor Ivy Mill, Crown Street, Manchester, M35 9BG) #gold #mining #investing 

    Author: Stuart Langelaan

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    Catalyst Information Services Ltd, the owner of MiningMaven.com, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    Catalyst Information Services Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.

    MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance.

  • Power Metal and Red Rock fly as they apply for more gold ground in Victoria (RRR, POW)

    Power Metal Resources (LSE:POW)and Red Rock Resources (LSE:RRR)both enjoyed a strong lift on Tuesday after revealing yet another expansion to their joint venture (“JV”) in Australia’s Victoria Goldfields.

    Through their shared outfit Red Rock Australasia, the firms have lodged applications for two new licence areas covering 215km2in Victoria – one of the world’s most active and prospective high-grade gold mining region.

    This takes the JV’s total licence application area to 919km2 of ground adjacent to the Ballarat gold mine owned and operated by Castlemaine Goldfields – a subsidiary of Liongold Corporate. Ballarat is currently producing 40,000 ounces of gold a year at an average grade of 5.6g/t gold from underground mining and has historically produced more than 13 million ounces of the precious metal.

    Excitingly, all of the joint venture’s application areas have extensive evidence of gold mineralisation. In many cases, they even have recorded production and historical drilling.

    In Tuesday’s announcement, Power Metal’s chief executive Paul Johnson said the expansion has granted Red Rock Australasia “critical mass” in Victoria with a broad spread of targets that could become mines. “I look forward to the coming weeks and months, when we will be providing further information to the market outlining the prospectivity of each project within the JV portfolio,” he added.

    Shares in Power Metal were up 12.6% on the news at 0.39p, their highest level since March, while Red Rock had advanced 27.4% to 0.3p.

    The two firms first announced their entry into the Victoria Goldfields in April, when they applied for 130km2of ground. Several days afterwards, they added a further 581km2to this holding.

    Victoria is currently experiencing something of a modern day goldrush. Historically, work in the region has mostly been mostly alluvial – or at surface.  However, many players are now looking to follow in the footsteps of Kirkland Lake Gold, whose Fosterville gold mine has become one of the world’s highest-grade, and lowest-cost projects through underground drilling. In Q1 2020 alone, the project produced 159,864 ounces at 42.4g/t primarily from underground operations.

    In Tuesday’s update, Andrew Bell, the chairman of Red Rock Resources, elaborated on his new JV’s potential to this end:

    “Each license contains evidence of gold mineralisation and historic gold workings, with in many cases recorded production from previous alluvial mining or underground drives.

    At a time when the Goldfields are attracting considerable new interest after a series of discoveries and the opening up of the high grade zones at the Fosterville mine, RRAL has made a strategic decision to become a regional specialist in the Victoria Goldfields with a twin focus on bringing brownfield projects back into production and discovering new mines. Often it is by producing that one makes discoveries."   

    Author: Daniel Flynn

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    MiningMaven Ltd, the owner of MiningMaven.com, does not own a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    MiningMaven Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.

    MiningMaven.com and MiningMaven Ltd are not responsible for the article's content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

     

  • Power Metal Resources to push on “innovatively and aggressively” following recent placing (POW)

    Earlier this week, Power Metal Resources (LSE:POW)outlined in detail its plans to "push on with existing interests more innovatively and aggressively" following a recent £1 million fundraise.

    The company's chief executive Paul Johnson said he and his team are pursuing two key objectives. The first of these is to make one or more major metal discoveries within the firm's gold, base, and strategic metal projects. It will then look to crystallise the value of any such discovery for the benefit of shareholders.

    Although Johnson said each of Power Metal's five projects has the potential to deliver such a discovery, he highlighted three standout opportunities for the remainder of 2020.

    The first is the firm's 51%-held Molopo Farms Complex project in Botswana, where drilling over coming months will target major nickel, copper, and platinum group metal ("PGM") targets. The second is its Haneti polymetallic project in Tanzania, where exploration drilling plans are being developed to target major nickel, copper, and PGM targets.

    The third, and arguably most exciting, opportunity is its Australia gold joint venture with AIM peer Red Rock Resources. The two firms have been building up their position in the highly-prospective region of Victoria over the past few months, and proactive exploration may be completed in 2020 subject to permitting developments.

    "So now we find ourselves with a diverse and exciting portfolio of project interests, and with the support of shareholders and investors in the recent financing, a considerable working capital position with which to drive forward those interests," added Johnson. "If we are fortunate in making a major discovery in just one of our projects, we could create significant value for our shareholders."

    Power Metal'ssecond key objective is to build up its working capital and balance sheet towards what it describes as "financial self-sufficiency". Moving forward, the company means that it aims to reduce its reliance on funding from the market to achieve its business objectives. This is something the firm does not feel like many of its junior resource peers are pursuing, highlighting their reliance on a "more traditional model of cash burn for exploration" in Monday's release.

    Johnson said that his firm would achieve financial independence in three different ways.

    The first is by taking positions in project holdings companies alongside direct project participation. This is something it has already done at Molopo Farms with Kalahari Key and Haneti with Katoro Gold, and in Botswana with Kavango Resources.

    "The aim is that successful project development will drive the value of the ultimate holding company in which Power Metal has a stake, driving the value of our investment in that company higher," the company added.

    Alongside this, the firm said it is working to monetise its existing project interests, as already described. Finally, it will invest in other junior resource sector opportunities, having recently established a "Junior Resource Fund" that allows it to invest up to £75,000 in value cases it finds across the market.

    "In the current climate there are opportunities for significant capital returns to be generated from investment in junior resource equity or related financial instruments," it added.

    Rounding up, Johnson added: "I am keen for us to be bold and adventurous with reward weighted risk-taking, but with solid underlying principles of risk management covering geopolitical, commodity, operational and financial considerations. In other words, combining boldness with risk management means diversification, which is what we have achieved.

    Many companies put their business case forward-focused around a single major project and concentrate their energies around that.  I understand this, but it's not the Power Metal approach, where instead, in our view, we have numerous major projects, each of which is capable of delivering a transformational discovery and by virtue of this shareholder wealth."

    Author: Daniel Flynn

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    MiningMaven Ltd, the owner of MiningMaven.com, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    MiningMaven Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.

    MiningMaven.com and MiningMaven Ltd are not responsible for the article's content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

  • Red Rock Resources highlights expansion progress at the Tshipi Borwa manganese mine (RRR)

    Tuesday saw Red Rock Resources (LSE:RRR) highlight the news that Jupiter Mines has made major inroads into the expansion of its Tshipi Borwa manganese mine in South Africa.

    Red Rock, which owns 0.87% of Jupiter said that the business has completed a concept study for the expansion and will shortly begin a comprehensive feasibility study for the enlarged project. This will be based on a base case scenario production profile of 4.5 million tonnes – 50% more than the property’s current three million tonne production level. Total expenditure required for the expansion is estimated to be 1.025bn South African rand.

    Although production profiles in excess of this were explored, Jupiter ultimately decided that the base case was ‘favourable from a timing perspective’. This is because a larger production profile would require more infrastructure, time, and capital as well as introducing more legal requirements.

    Some of the major constraints to go beyond the base case scenario include potential mining constraints, the lack of water in the area and logistical constraints in the medium term,’ Jupiter added.

    Subject to the completion of the feasibility study and commercial process, Jupiter expects Tshipi to reach stead state exports of 4.5 million tonnes in three years.

    Red Rock’s chairman Andrew Bell said: ‘A potential 50% production increase over 3 years is one of a number of encouraging developments at Jupiter, which continues its drive to improved efficiencies and stringent cost control.

    ‘Jupiter has over the last 18 months exceeded its benchmark 70% dividend payout ratio, and the significant strengthening in the manganese price over the last two months testifies to the resilience of underlying demand. The company [Red Rock] expects a continued growth over time in the level of contributions received from its holding in Jupiter.’

    Tshipi Borwa entered production in early 2013. Since then, the mine – one of the largest of its kind in the world with a 432Mt resource base - has more than doubled its production and export volumes to over three million tonnes of manganese ore annually. The project currently boasts a maximum capacity of 3.6 million tonnes per annum and a 100-year life of mine – both with the potential for expansion. As well as being one of the only manganese mines in the market, Tshipi also boasts some of the lowest operating costs in its space at a current average of $2.18 per dry metric tonne.

    Jupiter offers Red Rock a reliable revenue stream owing to its progressive payout policy. Indeed, Red Rock received income from dividends and share sales totalling A$1.47m for Jupiter’s financial year to 28 February 2019.

    Author: Daniel Flynn

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    MiningMaven Ltd, the owner of MiningMaven.com, does not a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    MiningMaven Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.

    MiningMaven.com and MiningMaven Ltd are not responsible for the article’s content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

  • Red Rock Resources secures transformational licence renewal for 1.2Moz African gold project (RRR)

    Monday saw Red Rock Resources(LSE:RRR) reveal the long-awaited renewal of its licence areas covering its Mikei and Macalder gold projects in south-west Kenya. This is a huge step forward for the company, which the market has yet to wake up to.

    The projects were 75% beneficially owned by Red Rock until a renegotiation with its partners in 2018 that will see ownership interest rise to 100%. They cover 245km2in the under-explored Migori gold belt near Barrick’s North Mara gold operations in Tanzania.

    Migori’s greater Mikei area already boasts a 1.2Moz JORC gold resource, while tailings on the property from the Macalder VMS present another 68,000 ounces of the precious metal ready for early production. The latter are in the most valuable Measured category.

    The projects offer a great deal of upside potential, with a key component of Red Rock’s regional activities focusing on identifying new potentially economic areas of mineralization and expanding the project’s existing resource base.

    Work by the company in the early 2010s already highlighted opportunities through a pit optimisation study and 12 new regional exploration targets.

    Back in 2014, Red Rock had got as far completing the first stage of a Bankable Feasible Study for the project’s 200,000 oz Nyanza gold deposit as a stand-alone open pit operation.

    A PEA provided projected life of mine revenue of US$95 million based on US$1,200/oz as well as an NPV(10) of US$8 million and CAPEX costs of just US$3 million – recoverable within six months of operation.

    Meanwhile, Red Rock had also submitted in 2012 a mining lease application to the Kenya Government for the processing of the Macalder tailings.

    However, in 2015, the then Minister moved to terminate the licenses covering the area.

    After many years of patiently working through the issue, with the added complexity of straddling a period when 2016’s new Mining Act was coming into force, Red Rock finally announced on Monday that the anticipated issue of Prospecting Licenses PL/2018/0202 and PL/2018/0203 under the new Act have now been received for a period of three years from 2 August 2020.

    Given the company has not been able to complete any exploration or technical work on the project for several years, it will now begin a review of how it intends to proceed across the project.

    Speaking exclusively to MiningMaven, Red Rock’s chairman, Andrew Bell, told us:

    “It has taken a long time for us to get to this point, but the timing could not now be more perfect for Red Rock. With gold prices setting all-time highs, there is a huge amount of renewed interest in the sector.

    With a 1.2Moz JORC resource already in place, Red Rock has a platform to build on and expects to be able to achieve a substantial increase in resource size in the next phases of exploration with the eventual aim of building up a multi-million ounce deposit like North Mara.. We have an extremely strong foundation on which to work.

    This represents a transformational opportunity for us and our shareholders and I expect plenty of positive updates in the coming months as we bring this project of enormous potential back to life.”

    Author: Daniel Flynn

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    MiningMaven Ltd, the owner of MiningMaven.com, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    MiningMaven Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.

    MiningMaven.com and MiningMaven Ltd are not responsible for the article's content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

     

     

  • Red Rock Resources to push forward at prospective DRC copper-cobalt project (DRC)

    Red Rock Resources (LSE:RRR) will push forward in the Democratic Republic of Congo (“DRC”) with a second round of work at its Luanshimba copper/cobalt project. The natural resources development player was trading at 0.3p on Tuesday after revealing that the work will enable it to “test hypotheses and step up activity quickly if justified”at the asset.

    Red Rock will begin by carrying out pitting in two areas identified as being strongly anomalous for both copper and cobalt in a successful initial round of work completed in 2018. It will then follow up with trenching in any areas where mineralisation is encountered.

    The organisation will also carry out geophysics over the as-yet-untested north-west sector of the property, carrying out pitting once these results have been interpreted.

    To avoid the risk of artisanal miners exploiting the project, Red Rock will begin to seek out quotes for its next round of work immediately if significant copper mineralisation is encountered. The company said this would likely take the form of reverse circulation drilling.

    Chairman Andrew Bell said Red Rock was working to build on “very promising”results from its first round of work that suggested the presence of mineralisation at depth.

    “As the wet season ends, we want to take the opportunity to follow up these earlier results and find out more about the mineralisation and the lithological units in which it is contained,” he added.

    The director also hailed the DRC as “one of the world’s most prospective environments for the minerals we seek”.

    Red Rock’s work at Luanshimba forms just one arm of its ongoing operations, which span sectors such as steel, and oil & gas, and countries like South Africa and Benin.

    Of particular interest is the firm’s Migori gold project in Kenya, which contains a 1.2-million-ounce gold resource. The company, alongside its investors, is currently appealing the termination of the licences covering Migori back in 2015.

    If it is successful in upending this decision, then the project could potentially provide a great deal of upside in a market that is presently booming due to fears surrounding coronavirus. Indeed, Migori presents project life of mine revenues from gold sales of $95 million against capital costs of just $3 million at $1,200 an ounce gold – the precious metal currently sits much higher than this at $1.651 an ounce.

    With Red Rock’s market cap currently sitting at just £2.2 million, removing the legal block at the asset could be a real game-changer.

    Author: Daniel Flynn

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    MiningMaven Ltd, the owner of MiningMaven.com, does not a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    MiningMaven Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.

    MiningMaven.com and MiningMaven Ltd are not responsible for the article’s content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance.

  • Red Rock Resources updates on investments in DRC and Jupiter Mines (RRR)

    Natural resource development company Red Rock resources (LSE:RRR) gave an update on two of its investments this morning. First is news regarding Red Rocks’ joint venture agreement for the development of cobalt and copper assets in the Democratic Republic of Congo. The company has now paid a second tranche of the consideration for its interest in the project by way of issuing 70m Red Rock shares at 0.7p per share. The payment equates to £490k and the shares issued have 1-for-1 three year warrants exercisable at 1p attached.

    Red Rock announced it had made the initial cash payment of $250k in November and a further $250k payment will be made upon completion of the remaining documentation, which is expected early in the New Year.

    The company initially announced the joint venture in September 2017, but final amended terms were announced on 30 August 2018. Red Rock will now own 50.1% of a local joint venture company, Musonoi Mining SA on completion.

    A final payment of $200k will be made upon confirmation of economic mineralisation to the satisfaction of all parties, or the definition of a compliant Resource at Indicated or above status or of a Reserve, or on the decision to mine. In the latter case, Red Rock has a post-completion obligation to pay $1m if and when commercial production begins.

    "The JV partnership comprises of 3 copper-cobalt permits in the heart of the Katanga segment of the Central African Copperbelt. These are the Musonoi deposit, Kamukongo block, and Kasombo South permit.

    The Musonoi deposit lies within possibly the most prolific copper-cobalt district within Katanga. The area has been mined for more than 80 years and therefore has very adequate infrastructure. Despite being such a well-established mining area, Katanga still holds delineated resources and target potential mineralization. The Musonoi deposit contains significant gold, palladium and uranium , while the Kamukongo permit lies at the western end of the regional Kansuki and Kamikongwa structural trend that hosts some of the most productive high-grade cobalt-copper deposits in the Katanga Copperbelt.

    Andrew Bell, Chairman of Red Rock, comments: "We are forming a very positive impression of the potential from the data we are assembling and look forward to providing the market with further detailed information on our targets and intentions, in particular for early mobilisation on to the Musonoi license." 

    In a second update today, Red Rock announced that Jupiter Mines has released its quarterly results. Red Rock owns a 0.95% share of Jupiter Mines who disclose an attributable cash position of $96m as of 30 November 2018. Jupiter Mines owns 49.9% of the Tshipi manganese mine in the Northern Cape province of South Africa, which Subject to Tshipi performing as per plan and manganese price holding over January and February 2019, plans to distribute approx. R1 billion ($70m) in dividends to its shareholders.

    Andrew Bell, comments: "Jupiter continues to generate strong cash flow and solid results and its distribution policy makes it a valuable high yielding asset for Red Rock. The CIF manganese price achieved remained strong at $6.43 DMTU during the quarter."     

    Author: Stuart Langelaan

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.
    The Author has not been paid to produce this piece by the company or companies mentioned above.
    Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.
    MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance