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

     

  • EXCLUSIVE REPORT: Victoria, Australia - The Next Frontier in Gold Exploration

    A gold opportunity of epic proportions has opened up in southern Australia.

    Beneath the planes of Victoria lie as many as 75 million high-grade ounces of the precious metal, just waiting to be found.

    That’s the view of the Geological Survey of Victoria, at least, and the global exploration community has begun to cotton on. After all, plays like this don’t go long unnoticed.

    It all started with Kirkland Lake Gold’s (NYSE:KL) Fosterville Gold Project – the world’s highest grade and lowest cost gold mine.

    Local media reports that this world-class mining region is reaching “frenzy state”.

    Juniors have flocked to Victoria from all over the world hoping to replicate Fosterville’s success. These firms have been aggressively acquiring licenses and commencing drill programmes. In the past 12 months they’ve enjoyed increasingly exceptional results.

    It’s not just these smaller firms that have zoned in on Victoria though. Juggernaut miner Newmont (NYSE:NEM) has even staked a vast land package in the region.

    Majors like this typically leave exploration to the junior explorers, jumping in when a commercial discovery is made. But with so much high-grade gold and such low mining costs on offer, what’s the point in waiting? Especially when even the locals are even getting involved.

    In July last year, one Victoria retiree discovered a 2 kilogram gold nugget worth USD$130,000 armed only with a metal detector and a shovel.

    In these goldfields, great riches are everywhere to be found.

    And amid this tidal wave of interest, three London-listed exploration companies are among the best placed to seize the Victoria gold opportunity.

    Red Rock Resources (LSE:RRR), Power Metal Resources (LSE:POW) and ECR Minerals (LSE:ECR) were the first in London to spot this an enormous opportunity and moved before anyone else could blink.

    The three firms staked vast claims in three of the most prospective mining areas in Victoria – Ballarat, Bendigo, and Creswick.

    With each company now getting ready to accelerate its plans, the potential for multiple investment returns is tantalising.

    Click here to download our exclusive report for a deep dive into the three UK firms working to generate fortunes in Victoria - the world's hottest gold exploration frontier

    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

     

  • IPO plans accelerate as Red Rock Resources and Power Metal celebrate new JV licences (RRR, POW)

    Red Rock Resources (LON: RRR) and Power Metal Resources (LON:POW) on Friday revealed that their Australian joint venture has been granted another two licences, with the IPO process now set to accelerate.

    The Red Rock Australasia joint venture (“JV”) has gold exploration interests in the prestigious Victoria goldfields – the same goldfields as Kirkland Lake Gold’s (NYSE:KL) Fosterville mine.

    Fosterville, as the world’s highest grade and lowest cost gold mine, has drawn a great deal of interest to Victoria. This includes from Red Rock Resources and Power Metal, who have 50.1% and 49.9% stakes respectively in the JV.

    The two have applied for a considerable licence area, with seven total licences now granted and applications in process for another nine. The latest two licences are Evergreen, covering 484 square kilometres (“sq km”), and the 85 sq km Mt Bute.

    The seven licences now cover an 848 sq km exploration area, with Power Metal noting this includes “numerous old mines and workings and identified geological targets”. The presence of old mines and workings is particularly significant for the Victoria goldfields, as Fosterville was discovered after digging deeper at a former gold mine.

    As the majority of ground covered by the NI 43-101 technical report has now reached granted status, the IPO process for the Red Rock Australasia JV is set to pick up speed.

    Impressively, licence applications are in process for another nine new gold exploration licence areas covering an incredible 1,488 sq km.

    Power Metal chief executive Paul Johnson noted that the Evergreen tenement is among the “larger licence applications and sits in an area of particular interest”.As evidence for this, he pointed to “increasing investment by peer companies in project acquisition and exploration”.

    On the topic of the JV IPO, he said: “Grant of the two licences moves the IPO process front and centre. We believe that the core interests of RRAL forming the basis for an IPO on the Canadian capital markets represents one of the most comprehensive investment opportunities in the Victoria Goldfields for Canadian and international investors.”

    Red Rock Resources chair Andrew Bell said the IPO plans “can finally move up a gear” and called the current tenement package “a strong and competitive investment offering”.

    Alongside the update on the JV, Red Rock Resources also gave an update on its interest in Jupiter Mines (ASX:JMS) and Jupiter’s spin-off plans. Red Rock Resources owns around 1% of Jupiter Mines, a manganese producer in South Africa.

    Jupiter is to pay a final A$0.02 per share dividend for its year ended February 2021, payable May 27, with Red Rock Resources receiving around £150,000. The Jupiter dividend yield for its financial year is 10.1%, dipping from 15.7% and 22.7% the two years prior as a result of lockdowns.

    Additionally, a Jupiter general meeting has now approved a capital reduction, paving the way for the spin-out of iron ore business Juno Minerals on the Australian Stock Exchange.

    Bell noted that Jupiter’s yield was in the double digits for the third year in a row and was very pleased with the Juno float.

    “This long life, low cost, manganese producer is now distributing out to shareholders its iron ore assets in an ASX float, which for us as royalty holders over the main iron ore asset is a doubly encouraging development,”Bell said.

    Author: Anna Farley

    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

  • Market conditions favour Red Rock as it pushes forward DRC-based cobalt/copper project

    On 20th November 2020, Red Rock Resources PLC, a UK-based natural resource development company, mobilised a team to the company’s 80% owned Luanshimba license in the Democratic Republic of Congo. 

    The company sent the team on a programme of geophysics to follow up on two anomalies identified in late 2018. 

    At the time, a comprehensive termite mound sampling programme and a reconnaissance geological mapping were conducted over a 100x100m area of prospective Roan group sediments within the company’s 420-hectare prospecting license, highlighting: 

    • A 2km long anomaly up to 500m wide that follows a carbonaceous shale and silicified dolomite. 
    • Anomalous metal assays of 519ppm Cu and 425ppm Co, likely indicative of Cu-Co mineralisation. 

    The recently deployed programme takes the form of a 71km ground magnetics survey, a 12km induced polarisation survey, and the checking of on-site artisanal activity based on the findings from two years ago. The programme aims to identify conductive targets and provide Red Rock with a better understanding of the license’s structure for upcoming drilling.

    The Chairman of Red Rock, Andrew Bell, said:“Once we start pitting and drilling, we are likely to have to maintain a continuous presence on-site to keep artisanal activity under control, so good preparatory work including geophysics […] was a critical next step.”

    The news comes at an interesting time for the copper and cobalt markets.

    Better than expected demand for portable electronics, mobility products such as eBikes, and an influx of home workers have seen cobalt demand improve considerably from the early days of the pandemic. In March, the metal was priced at just $28,500 per tonne, compared to its value of $31,990 at the end of November.

    This, coupled with a recent report by Benchmark Mineral Intelligence suggesting that the battery industry, which at the moment makes up over half of the world’s cobalt demand, will require a further 100,000 tonnes of the metal by 2025, suggests a bullish outlook for the metal.

    And while automakers, another large market for cobalt, move towards less costly electric vehicles and improvements in technology that reduce the need for cobalt, the positive sentiment around battery demand seems to outweigh the bearish fears of cobalt’s antiquatedness. 

    Copper has had a similar, more dramatic trajectory, rallying to a seven-year peak at the start of December. Copper prices on the London Metal Exchange hit $7,719 a tonne in afternoon trading, highs that the metal hasn’t seen since 2013, after Goldman Sachs in Asia said the metal was in the first leg of a bull market that could see record highs.

    A weak US dollar, which makes copper and other commodities cheaper in other currencies, and the hopes that a COVID-19 vaccine will slow the spread of the virus, has lent support to copper’s stock, which fell to $4,600 in March. 

    With both metals having quite the positive outlook, Red Rock’s programme could prove to be a timely venture. If the two metals continue on their bullish path, the company’s drilling in DRC is definitely one to watch. 

    Author: Mark Sheridan

    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

  • 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 and Power Metals push forward at Victoria gold JV with two more licence approvals (RRR, POW)

    Red Rock Resources (LON: RRR) has charged ahead in Australia, announcing on Wednesday that another two licences have been granted for its exciting Australian gold joint venture with more soon to come. The project has serious potential, being located in the same state as the widely renowned Fosterville mine.

    The company’s Red Rock Australasiajoint venture (“JV”) with Power Metal Resources (LON:POW) now has five licences already granted in Australia’s Victoria Goldfields. The JV is split almost evenly, with Red Rock holding a slightly higher 50.1% stake.

    Importantly, all five licences so far are located in Red Rock Australasia’s high priority areas, where the JV is already developing its early drill targets.

    Victoria has undeniably drawn huge attention in recent years after Kirkland Lake Gold’s (NYSE:KL) incredible discoveries at Fosterville, the world’s highest-grade and lowest-cost gold mine.

    Red Rock Australasia now has licences covering 279 square kilometres (“sq km”). The latest two licences are EL007385 – named Sardinia – and EL007327, aka Blue Stocking. Sardinia is a 60 sq km licence south west of Ballarat, and Sardinia is 4 sq km in size and located north of existing JV licence Daylesford. Both new licences are for a five-year period.

    More licences soon

    In yet more excellent news, Red Rock chair Andrew Bell has revealed that “several more” of the 11 other JV licences are in the final processing stage. In total, these 11 cover a further 2,057 sq km of the Victoria Goldfields.

    Red Rock and Power Metal plan to list core Red Rock Australasia assets with a Canadian public listing, a process well underway and taking place in parallel with other work.

    Bell described these newly granted licences, and those just ahead, as “an encouraging background to our continuing work on the planned IPO”.

    Both Red Rock and Power Metal were enthusiastic over new appointments at the JV. This includes the addition of current Red Rock Australasia exploration manager David Holden as a director on the JV board, and the hire of Jack McInerney as exploration geologist at the JV.

    Bell noted McInerney’s “four years of regional experience at the Ballarat Gold Mine”in particular.

    Meanwhile, Paul Johnson, chief executive officer of Power Metal, emphasised the recent announcement that Red Rock Australasia’s exploration programmes have already begun. He added that work is “targeting a large scale gold discovery or discoveries” with first exploration results expected to be announced “in the near future”.

    Gold’s shine hasn’t dimmed yet

    Gold has risen 11% since the start of 2020, from $1,557.32 per ounce to $1,734.28 an ounce. While it has fallen from its July peak of more than $2,036, as investors look towards the end of the pandemic, a later rise doesn’t seem too unlikely.

    Not only will markets have to keep enduring the Covid-19 virus, likely indefinitely, but they will also have to reckon with the massive amounts of debt issued in the weeks after the 2020 pandemic. This could well trigger a return to the safe haven asset.

    Alongside all this, Red Rock announced that the IPO date for its iron ore spin-out, Juno Minerals, has been delayed so that a general meeting can be called to remove some conditions after compliance issues with an overseas shareholder.

    Bell said Red Rock has “sought guidance and taken appropriate advice” and can now move forward with the deal “with minimal delay”.

    Author: Anna Farley

    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 not 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 boss Bell says firm in better position than ever to increase liquidity (RRR)

    Red Rock Resources (LON: RRR) chair Andrew Bell said Tuesday the company was in a better position than ever to improve liquidity, paving the way for evolution to a mid-tier exploration and production firm.

     

    In its half-year ended December 31, Red Rock’s total equity climbed a highly encouraging 20% to £16.7 million, after rising 54% over the previous six months. 

    Not only that, but there was a £2.3 million increase in current and non-current assets over the half-year while liabilities dropped by £530,000. Red Rock has, since December, paid out £1.4 million to Kansai Mining.

    “If we want to advance to become a mid-tier mineral exploration and production company, we need from here to give increasing importance to building and maintaining a high level of liquidity. We are in a better position to do so than we have ever been,”said Bell.

    The value of Red Rock’s marketable securities and cash now approaches £4 million. This has been higher of late and is expected to rise by its year end in June thanks to dividends from Jupiter Mines, as well as Juno Minerals’ in specie share distribution and floatation.

    The company’s value is also set to rise thanks to “the dynamism of Power Metal Resources”. Red Rock owns 25.0 million shares in Power Metal (LON: POW), as well as another 25.0 million warrants. The two are partners in the Red Rock Australasia joint venture (“JV”), which holds a major position in Australia’s highly lucrative Victoria goldfields.

    Victoria is where Kirkland Lake Gold’s (NYSE:KL) astonishing Fosterville mine is located, the highest grade and lowest cost gold mine in the world.

    Red Rock and Power Metal are planning an IPO for Red Rock Australasia. Bell expects this will crystallise the value of Red Rock’s holding in the JV to result in “a valuation uplift significant in relation to our market value”. The JV is split almost evenly, with Red Rock holding the slightly higher 50.1% stake.

    Earlier this month, the JV obtained another two licences, bringing the total to five, with more expected soon. All licences so far are located in Red Rock Australasia’s high priority areas, where the JV is already developing its early drill targets. The 11 other JV licences are in the final processing stage.

    Juno and Red Rock Australasia are not even the only upcoming IPOs in Red Rock’s portfolio, with Elephant Oil also poised for a market listing. Bell pointed out that if results from Juno’s passive seismic two years ago in onshore Benin are fulfilled “to any degree” then Juno could become one of Red Rock’s significant assets.

    The company’s liquidity is improving already in its second half, with the company aiming to hit a £20 million cash and liquid investments target in the medium term.

    Author: Anna Farley

    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 not 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

    Loss for the six months amounted to £430,000, swinging from a £337,000 profit the prior year. This results from higher administration costs, including employment costs, as a partial result of Red Rock Australasia’s elevated activity level amid increasing land holdings plus preparations for exploration and listing.

    Lower dividends from Jupiter Mining also played into the interim loss.

    Big things ahead

    Red Rock has a variety of exciting plans lined up. For example, the firm is preparing to drill short reverse circulation holes at its Luanshimba copper-cobalt prospect, located in the DRC, once geophysics is done and ground conditions allow.

    Elsewhere, in Kenya, the company is finalising its drill programme to follow up a recently announced JORC resource while in Australia it has started active exploration with the first targets set for drilling later this year.

    “We live in volatile times”said Bell, noting the need to prepare “for sieges as well as marches”. While there appear to be promising opportunities in all directions for Red Rock, there are also grounds for caution.

    Bell explained that while this could be the time for “move up by an order of magnitude to a new level” thanks to exciting project and a strong market, it is important for Red Rock to keep its footing and not put “the hard won gains of the last year” at risk.

     

  • Red Rock Resources and Power Metal in Victoria – on the hunt for Fosterville-scale gold (RRR, POW)

    Red Rock Resources’ (LON:RRR) joint venture in Victoria could be on track to discover Fosterville-scale gold, as its exploration of Australia’s hottest goldfields continues.

    The discovery of Fosterville, the world’s highest grade and lowest cost gold mine, triggered huge interest in Victoria, which lies in southeast Australia. And now, Red Rock and Power Metal Resources (LSE:POW) have teamed up to focus on exploring the area further with their gold joint venture (“JV”) Red Rock Australasia. Red Rock has a 51.1% stake in the JV, and Power Metal the remainder.

    Red Rock Australasia has applied for 30 licences in Victoria in total, covering around 2,300 square kilometres (“sq km”). In an interview with ValueTheMarkets, chief executive Andrew Bell noted that the JV’s entry into the area was timed perfectly, being followed by “a rush for all available land”by explorers and high-profile producers alike.

    Asked if the Red Rock Australasia JV has the same potential as Fosterville, Bell noted the region’s considerable geological potential.

    He also highlighted that the JV has targets “just waiting to be explored”, with two in particular that clearly “could be big”.

    The chief executive also pointed to Fosterville’s extraordinary recent results, and its hunger to “find another Fosterville”:

    “There must be other Fostervilles out there, or other rich deposits. And with the footprint we have in really good ground, we have as good a chance of finding them,”Bell said.

    Bell said the JV’s wisdom lies in using old gold mines to find new ones, pointing out that it has “a lot of old workings” alongside targets based purely on geology and geophysics.

     

    Past and future

    Red Rock and Power Metals have major plans for Red Rock Australasia. Of the total licences applied for, the JV has been granted five – covering 279 sq km – while several of its other eleven licences are in the last processing stage.

    Eventually, the JV partners plan to list core Red Rock Australasia assets through a Canadian public listing. This process is now well underway in parallel with other project work.

    There is a strong mining history in Victoria, with a discovery in Ballarat in 1851 triggering a gold rush with around 6,000 diggers arriving every week. During the 1850s, an incredible one-third of global production came from the region.

    Indeed, despite being Australia’s smallest state, Victoria has produced in excess of 2,400 tons of gold – an incredible 32% of all gold mined in the country – to date.

    Production ceased in the 1920s for mines at the two centres, Bendigo and Ballarat ahead of a sixty-year hiatus.

    But that all changed in 2005 when commercial mining started at Fosterville, located east of Bendigo, with a million ounces mined by 2016.

     

    What next for gold?

    Adding to Red Rock’s interest in Victoria is the gold price itself, which has been “very strong”.

    Bell attributed this to extreme quantitative easing (“QE”) measures, which were introduced in the wake of the 2008 financial crash as a way to expand the monetary base while maintaining a low interest rate.

    The chief executive commented on how difficult it has been for the US to stop issuing new credit through QE and begin reducing the central bank balance sheet in spite of its strength. Each time, Bell explained, markets were spooked and the policy had to be reversed. With even the US unable to achieve this goal, Bell does not expect others like Japan or the EU to fare any better.

    Bell added that the pandemic has taken this “to a new level”, making it “difficult to imagine that there will not be inflation in the next two or three years”.

    While the impact of inflation on the gold price in early stages might be ambiguous, Bell stressed that gold will ultimately “be seen as a safe haven and an inflation hedge” for “any prolonged period”.

    Adding to this has been a lack of new gold discoveries, with not enough investment to meet foreseeable demands. Bell pointed out that, as the world gets richer, demand will rise. As such, if gold is “to hold its own as a percentage of assets”,its production must increase.

    Bell acknowledged that some countries have been increasing production – with China in particular hitting around 380 metric tonnes in 2020. But nothing so far, he said, “has been able to replace the old position of South Africa, which, in the 1970s, was still producing 900 tons a year.”

    Much of this was obscured by gold sale programmes conducted by central banks. However, as Bell pointed out, “non-traditional countries” have been “building up gold as part of their reserves”.

    The chief executive asserted that, marginally speaking, there is an inclination among private investors and central banks to increase gold holdings. At a time when the gold supply is now increasing, this will put upward pressure on the precious yellow metal.

    For that reason, Bell asserted that gold was not high risk and represents “a great insurance policy”. Not only that, but he believed it was “more probable than not” that gold will “go considerably higher”.

    Red Rock and Power Metal have identified Victoria as just the right place for their exploration efforts, with its rich history and thriving present. Not only that, but they also have excellent timing – picking gold just as the element is set to rise. This could well mean great things for the early investor.

     

    Author: Anna Farley

    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

  • 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 poised for cobalt success amid EV revolution (RRR)

    Red Rock Resources (LON: RRR) looks to be perfectly positioned at the moment when it comes to the electric vehicle revolution. This is particularly the case for its interests in the DRC, origin of more than half of the world’s cobalt.

    In an interview with ValueTheMarkets, chair and chief executive Andrew Bell highlighted the excellent combination of Red Rock’s copper/cobalt joint ventures amid the push for electrification.

    Red Rock has a controlling position in its projects, which cover potentially four copper/cobalt licences and one copper licence in the heart of the Katanga provinces, located within the Central African Copperbelt.

    Around 60% of the globe’s cobalt resources come from the DRC. Not only that, but, as Bell explained, “50% of that cobalt comes from the areas around Kolwezi, including where we have one project”.

    In terms of cobalt reserves by country, the DRC had 3.6 million metric tons as of 2020. Meanwhile, there is an estimated $24 trillion worth of cobalt, copper, gold, diamonds, and other mineral deposits untapped in the country, making it one of the world’s most in-demand mining destinations.

    Specifically, the global electrification trend that is currently playing out is reliant heavily on both cobalt and copper.  

    Indeed, right now, around 50% of cobalt produced worldwide ends up in rechargeable batteries, and when it comes to the total battery metals market, cobalt has the second-biggest volume share.

    Meanwhile, copper is another major electric vehicle (“EV”) component used in electric motors, batteries, and wiring. The red metal is also used for EV charging stations, part of the infrastructure needed to make electrification possible.

    This is all great news for Red Rock and its investors, because the JVs target both cobalt andcopper. As Bell explained:

    “The argument for copper is really good already. The argument for copper including electric cars is even better. Copper and cobalt are often found together, as in the parts of the DRC where we're exploring.”

    Bell also pointed out the “government pressure” that is helping to push electrification forward. He highlighted that “a lot of money”is going into driving the change.

    “Humans are so innovative that people will find cheaper and cheaper car batteries and this market will expand,” he added.

    Evidence of this direction of travel is playing out everywhere.

    For example, Norway is poised to ban the sale of fossil fuel-powered cars within just four years. The UK is to follow suit with a ban in 2030 and Japan in the mid-2030s. The EU is also proposing a crackdown in order to hit its legally-binding 2050 zero emissions target while China, too, is considering its own ban.

    Likewise, over in the US, California intends a halt the sale of passenger cars and trucks that use gasoline by 2035. 

    This will sit alongside broader US measures under the Biden administration’s American Jobs Plan. These include sales rebates and tax incentives to encourage the purchase of EVs. Further, the plan will also involve the creation of a network of 500,000 EV chargers by 2030.

    Moving back to the JVs, and Bell said Red Rock is right now conducting exploration on one licence, which will involve drilling. “We have taken a greenfield project from zero to high expectations of an imminent resource with careful, economical, systematic, intelligent exploration,” he added

    Bell also said the company was also “negotiating with other parties about assets that contain resources”. 

    Alongside its position in the DRC, Red Rock also owns 25 million shares in its London-peer Power Metal Resources(LON: POW) along with a further 20 million warrants.

    Power Metals is also exploring for key metals needed to fuel the EV revolution – including nickel, copper, lithium, and cobalt. As a result, Red Rock’s position adds further diversified exposure to the electrification trend and another string to its already-well-crafted bow.

    With all of this combined Red Rock is perfectly positioned right now to capitalise on the EV revolution. It has electrification exposure just as the sector is booming, both regulation and incentives in place to encourage huge growth in the EV space.

    On top of that, Red Rock also has gold exposure at a time when prices of the yellow metal are on the rise. While there was some premature optimism at the start of 2021, which led a few investors away from safe havens, reality has set in again. A resurgence of Covid-19 outbreaks, like one right now in India, remain a threat and make gold all the more enticing.

    It is also worth considering the firm’s c.1% ownership of Jupiter Mines(ASX:JMS), a manganese producer in South Africa and a significant part of Red Rock’s investment portfolio since 2007. In the past two years, Jupiter has made a number of distributions totalling more than $200 million.

    Red Rock is in the perfect position, with plenty of catalysts waiting in the wings that could trigger a significant re-rate from its current £10.2 million market cap. The Congo JVs alone stands to benefit not only from any strong drill results and production in the DRC, but also increasing demand from the EV space keeping prices high.

    Author: Anna Farley

    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

  • Red Rock Resources pushes forward at Kenyan gold project (RRR)

    Wednesday saw Red Rock Resources (LSE:RRR)provide an update on its recently renewed and highly prospective gold project in Kenya.

    After a prolonged dispute with the Kenyan authorities, the firm finally returned to the Migori project in August after many years.

    Specifically, it was able to renew the two licenses that make up make up the property, which sits on a gold-rich greenstone belt lying between North Mara over the border to the south and Shanta Gold’s (LSE:SHG) growing project to the north.

    Red Rock is now ready to forge ahead in its quest to build on the 1.2 million ounce (“Moz”) ‘starter’ resource it previously defined at Migori and realise this project’s enormous potential. And having raised £1 million at the end of September, the company is fully funded, and its stock looks primed to make a sharp move higher as news is rolled out.

    On Wednesday, Red Rockannounced that it has now satisfied all of the conditions associated with taking a 100% interest in Migori, as laid out back in June 2018. Namely, it has paid previous owner Kansai £25,000 in shares at 0.7p each as well as issuing it a $1 million promissory note, and granting it £500,000 worth of 30-month warrants exercisable at 0.7p each.

    Meanwhile, the company also announced that it has appointed CSA Global to provide an updated mineral resource report for the project.

    The purpose of the update is to bring the historic 1.2 million ounce mineral resource estimate into compliance with the JORC 2012 code. This will enable it to be reported as a code-compliant mineral resource estimate in accordance with an AIM standard.

    Red Rock chairman Andrew Bell said: "Obtaining a 100% interest in 2018 was an important step forward in adding value to the Project and enables us now to deal in respect of the Project with a free hand. Red Rock has come a very long way since its first modest involvement in Kenya, which was on a farm-in basis, has overcome all vicissitudes, and now controls what we believe to be a significant and potentially expandable deposit.

    “Our consultants will immediately begin the work to enable us to declare a compliant resource which we will notify as soon as it is completed. This is an important step in our planning process for the next phases of exploration which will be aiming to build on the existing resource ounces and grade.”

    To read our recent, in-depth look into the Migori project, please click here.

    Author: Daniel Flynn

    The Author does not hold a 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 reinforces its compelling story with exciting Australia and Kenya updates (RRR)

    Every great success is made up of smaller successes, and it’s those smaller victories that ultimately lead to a win.

    Red Rock Resources(LON: RRR) is right now enjoying a slew of these kinds of small and cumulative successes across its portfolio, and the latest reports from Kenya and Australia have gone a long a long way to proving this once again.

    In Kenya, exploration in the historically underexploited Eastern Licence of the Mikei Gold Project is proving fruitful as new targets are identified along strike from the existing Resources.

    Meanwhile, at the Victoria Goldfields in Australia, the company has unearthed workings and areas that can be drilled later this year.

    The drilling for cobalt and copper in the Congo has been completed, and the company, which was sufficiently confident to build a camp before drilling at Luanshimba, has gone quiet as it awaits final results from the lab. Now, Red Rock is using the period before it announces exploration results to complete some long lead time license transfer paperwork before it announces exploration results,  

    Here, Red Rock’s chairman Andrew Bell walks Mining Maven through the significance of his firm’s latest update and Red Rock’s ambitions.

    If the firm can indeed make a discovery at one of the “really exciting” targets Bell describes, then a considerable re-rate from its current sub-£10 million market cap could be just around the corner.

    Victoria joint venture unearths “enticing targets”

    From Australia comes an exploration update from joint venture (“JV”) subsidiary Red Rock Australasia (“RRAL”) – an entity owned 50.1% by Red Rock and 49.9% by Power Metals Resources (LON: POW).

    Victoria was the site of a gold rush back in the mid-1800s after a discovery in Ballarat in 1851 resulted in a riot of activity in the state. At one point, an astonishing one third of the world’s gold production came from Victoria.

    While production dwindled after that, interest returned in 2005 when commercial mining started at the Fosterville mine and the State Government started to produce a series of geophysical studies. Fosterville was subsequently bought by Kirkland Lake Gold (NYSE:KL) and is now one of the highest grade and lowest cost gold mines on Earth.

    Since Kirkland’s success, explorers have returned to the area, seeking their share of the riches on offer in Victoria.

    The latest news reveals the JV’s success so far in the state – with critical steps including the discovery of workings, well-developed adits, and shafts at the O’Laughlins prospect, located in already granted license EL 007271.

    Given the lack of prior reports or indications of historical grade so far in the literature, it looks like this will be the first modern day exploration in these once-forgotten workings since the 1860s.

    Bell outlines the extent of the discovery here:

    “We think that we have a channel with two distinct lines of mineralization with old workings along them, production from which is unrecorded. But you can see a lot of money was put in the 1860s, and we think there’s possibly another similar channel in the middle and there may be shearing or cross-cutting faults.”

    As Bell explains, the structures could even turn out to be an offset to the east of the Ballarat trend going through the Ballarat mine.

    With safety requirements now complete, RRAL’s geologists are re-entering the old workings at O’Laughlins. There, they’ll investigate how much gold mineralisation was historically exploited, and the nature of that mineralisation.

    The re-entry programme also includes the additional underground excavations and shafts located in the immediate area, with the hope of better understanding the lode systems. The aim is also to improve targeting ahead of scheduled diamond drilling.

    Bell says the company has identified “some really exciting, enticing targets”. Specifically, there are two or three areas where the plan is to “book the drills to start diamond drilling at the end of November or beginning of December”. 

    As Bell comments:

    “We think that the prospects now are quite good, that we’ll be able to piece together good-grade resources around old mines workings, which would together potentially support a processing plant.

    “With each announcement, and with each piece of news we come out with, we are laying out a little more of the picture of what we potentially have, and what the next steps can be in exploration and drilling.”

    It’s these individual pieces of news that go into making the investment case for Red Rock. When put together, they reveal a company undertaking active exploration in some of the most prospective regions on the planet.

    Multi-million-ounce potential at Mikei

    Strengthening its investment case further, Red Rock also posted an update on the Mikei Gold Project in Kenya.

    The company revealed that it has completed 115 line km of induced polarisation (“IP”) surveying in the Masurura area of the Eastern licence. What’s more, because it has its own geophysics team and equipment, Bell highlighted that the firm was able to do so with great efficiency.

    Explorers use IP surveys as one tool to identify gold deposits, along with additional metals like copper and silver. The chargeability map generated from this IP survey coincides well with the presence of artisanal miners, as well as the soil geochemical contours already delineated. The map also coincides with shallow historic drilled assay intercepts.

    Red Rock’s survey recorded a total of four important anomalous areas in Francis 2, Francis 3, Lake Bush and Lake Bush Banded Iron Formation. Today, work continues and will focus on prioritising targets and locations for a 2022 drill programme.

    Mikei is a powerful project, covering “nearly 250 square kilometres along a Greenstone belt with 24 good targets”, as Bell says. This belt is the next along from the parallel North Mara mine – operated by Barrick Gold (NYSE: GOLD).

    North Mara lies 30km away, over the border from Mikei in Tanzania. Both projects are on the northern part of the Tanzanian Craton, which crosses into Kenya.

    As Bell explains, North Mara is what Barrick calls a “tier one asset”, putting it among their top mines with production at “nearly 200,000 ounces a year”.

    Bell goes on to add that:

    “In the last seven or eight years, North Mara has gone from looking like a declining mine to one which, having produced 3 million ounces since 2002, has another 5 million-plus ounces of resource and reserves – including underground at higher grades than we were seeing a few years ago.

    “Ultimately, I think when we look back on it, we will say that was a 10-million-ounce mine.”

    The latest Kenya release also mentions that drilling continues in the Western licence at Mikei, though has been interrupted by an equipment breakdown.

    Red Rock is bringing in an additional compressor so as to improve penetration and recoveries where graphitic shales around the water table level have impacted drill performance.

    Bell is enthusiastic about the drilling in the Western licence, noting:

    “We’ve already begun to be able to model something underground and say where the higher-grade zones are, and how we think the structure works. Each new hole we drill can be positioned to give us more information in relation to what we already have.”

    So, there’s the promising existing drilling in the Western licence, and then there’s the potential in the Eastern licence as well – as shown in these new IP survey results.

    If the Eastern and Western licences reveal what the company thinks they might, Bell says, the potential is huge.

    “If we find something there, then we could start talking about a target of not just one or two million ounces, but potentially three or four million,” says Bell, “but the ground will not give up all its secrets quickly, or cheaply”.  

    With so much on offer, then, it’s imperative to look not just at individual releases, but to put them in context and focus on the bigger picture.

    “Making progress all the time” – Red Rock’s efforts continue to bear fruit

    Shares in Red Rock are up 8% since September began. At the same time, the shares remain below their heights back in February – making this an affordable point to buy.

    There tends to be this tendency among exploration investors to wait to for a single moment of victory, of triumph, the long-awaited result.

    But this short-sighted outlook prevents investors from taking a company in as a whole, and understanding its merit. It puts people on the back foot, waiting for something big to happen instead of taking action.

    In Bell’s words:

    “It’s been quite difficult to get across the fact that we are in three jurisdictions – Congo, Kenya and Australia – actually drilling this year.

    “Even when we’re not announcing ‘today we had dramatically good drill results’ we are still making progress all the time. We’re doing things that add to the story. Not everything we do is going to produce an instant headline, but we’re building the picture. You have to focus out on the big picture. We are currently working in three countries with three projects which we believe can deliver three mines.”

    The case for Red Rock is compelling enough when taken in these small updates, but is stronger still when taking the span of the company’s history into account.

    As newsflow builds – with drilling in so many jurisdictions in this year alone – the chance to get in on the ground floor is unlikely to last.

    Author: Anna Farley

    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 not 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