Assay results for Melville Bugt Project

RNS Number : 0888U

Red Rock Resources plc

15 December 2011

 



Red Rock Resources

Assay Results for the Melville Bugt Project

 confirm the presence of a high grade iron ore province  in north west Greenland

15^th December 2011

Red Rock Resources plc ("Red Rock" or the "Company"), the mining and exploration company with an iron ore project in Greenland, a producing gold mine in Colombia, advanced gold and copper exploration in Kenya, and interests in steel feed, uranium and rare earths, is pleased to announce analytical results from its 2011 field season on the Melville Bugt Project in north west Greenland.

Highlights

·     A number of highly prospective iron formations were discovered during 2011 field reconnaissance program at Melville Bugt

·     These iron formation have an estimated combined strike length of 19km

·     Assay results show iron contents up to 69.4% in banded to massive haematite- and magnetite-rich rocks

·    Airborne geophysical surveys have identified several extensive magnetic anomalies, also indicating local structural thickenings of mineralised zones

·     Discovery of previously unknown iron ore outcrop associated with a major 5km magnetic anomaly, with sampled haematite mineralisation along strike within a new application for licence enlargement

·     Geological correlations have been identified with the iron formations of the Mary River Project, Baffin Island, which was recently purchased for C$593M (365Mt @ 64.6% Fe)

Exploration Results

The 2011 exploration program has been highly successful in confirming the existence of a significant iron ore province at Melville Bugt, on the coast of northwest Greenland. A short initial reconnaissance field season during the summer of 2011 included geological traversing, sampling, prospect-scale mapping and airborne geophysical surveys over an extensive area.

Assisted by the detailed geophysical surveys a number of occurrences of magnetite-bearing iron formation were explored; for example the structurally thickened zones in the Havik area, which translates to 'iron' in the local dialect, among which a 2.5km outcrop was traced along strike with an estimated true thickness of 100m.

In addition to the magnetite-bearing rocks easily visible in the aeromagnetic data banded to massive haematite iron formation was encountered in a number of areas, the most promising of which is located in the De Dødes Fjord region, including a series of four associated occurrences across 7.5 km.

Figure 1  

http://www.rns-pdf.londonstockexchange.com/rns/0888U_-2011-12-15.pdf

Detailed Discussion

Sample Results

294 samples were collected from the field area, of which 218 were analysed for iron. The samples were prepared at Activation Laboratories Ltd's facility in Nuuk, Greenland, and forwarded to Activation Laboratories Canada for assaying using Inductively Coupled Plasma ("ICP"), Instrumental Neutron Activation Analysis("INAA"), ICP/MS (/mass spectrometry) and x-ray fluorescence ("XRF") methods to completely characterise the samples (full results are included in the linked APPENDIX). 

These assay results have confirmed the presence of extensive iron ore mineralisation within the Melville Bugt region. Analysis of geochemical, geophysical and field data has identified six major iron-mineralised prospects with the current licence area. The ironstones are interpreted to be metamorphosed Algoma-type banded iron formations (BIFs) hosted within the 2.7 billion year old Lauge Koch Kyst supracrustal complex, which has undergone subsequent natural enrichment.  

Based on mineralisation character and location, these six key target areas defined to date can segregated into two distinct groups:

·     Haematite-rich Eastern Targets - De Dødes Fjord Area

o  De Dødes West and Haematite Nunatak targets:

§ Massive to weakly banded ironstones capped by quartzite;

§ Mineralisation dominated by haematite, with minor magnetite-bearing zones;

§ Areas of very high grade mineralisation with near complete replacement by haematite;

§ Fe concentrations up to 69.4% Fe;

§ Up to 100m estimated true thickness;

§ Total strike length of anomalies and outcrops of 8km, with the single largest feature being nearly 5km;

§ Massive to banded sheets, dipping typically 30°-45°;

§ Potential for high grade Direct Shipping Ore (DSO) type deposits;

§ Deleterious element averages; P(0.023%), S(0.003%), SiO₂(32.1%), Al₂0₃(0.21%).  

·     Magnetite-rich Western Targets - Havik Area

o  Havik East, Havik Central, Havik West and Hans Nielsen Fjeld targets:

§ Banded iron formations (BIF)

§ Mineralisation dominated by magnetite;

§ Fe concentrations up to 53.7% Fe;

§ Up to 100m estimated true thickness;

§ Structurally deformed, with potential for thickening of BIF;

§ Total strike length of anomalies and outcrops of 11km, with the single largest feature being 4.3km;

§ Deleterious element averages; P(0.062%), S(0.002%), SiO₂(42.3%), Al₂O₃(0.01%).  

Figure 2 

http://www.rns-pdf.londonstockexchange.com/rns/0888U_1-2011-12-15.pdf 

Figure 3

http://www.rns-pdf.londonstockexchange.com/rns/0888U_2-2011-12-15.pdf 

Table 1 gives a summary of measured Fe content within six of the most prospective exploration targets;

PROSPECT	Fe CONTENT	# of Samples	Ore Mineralogy
De Dødes West	68.4% - 21.1%	42	Haematite and Magnetite
Haematite Nunatak	69.4% - 37.1%	9	Haematite and Magnetite
Havik East	36.5% - 24.2%	46	Magnetite and Haematite
Havik Central	53.7% - 27.3%	17	Magnetite
Havik West	46.1% - 35.3%	8	Magnetite
Hans Nielson Fjeld	45.3% - 35.8%	7	Magnetite

Table 1: Iron content and dominant mineralisation of key exploration targets

Field and laboratory blanks and duplicates were run to provide Quality Assurance Quality Control ("QAQC") control. Laboratory results were well within expectations, and all but one of the field duplicates registered average Fe₂O₃ and SiO₂ variation of less than 5%, which is considered acceptable for un-homogenised field duplicates.

One field duplicate pair returned results with a difference of about 15% in both iron and silica, which would be considered beyond the limits of acceptability. However, the close match of the differences in weight per cent in iron and silica for this one pair does however suggest that both samples lie on the very consistent trend of iron to silica ratios seen in all BIF samples, and as such the difference is due to a real difference in rock chemistry between the two halves of the pair, rather than any failure in analysis. This sample pair, and improvements to the field duplicate sampling techniques for the 2012 season, will be investigated.

Other rock-forming and trace element variation was very low for all duplicates.

QAQC performance is considered to have been acceptable for this stage of exploration.

Whilst in the field samples were tested using a handheld Niton XL3 XRF analyser, before they were shipped to the laboratory for confirmation. Gaining live information, allowed for efficient and effective exploration during the short field season.

A comparison between the field XRF and assay results revealed an overall increase in iron grade in the samples collected from the XRF to the assay results. 108 samples were shown to have increased in measured iron content by more than 2%, while only 14 samples dropped by more than 2%. This is consistent with expectations due to the uneven surface of natural samples causing some degree of scatter.

Appendix

http://www.rns-pdf.londonstockexchange.com/rns/0888U_4-2011-12-15.pdf

Geophysics Results

13,170 line kilometres of fixed wing airborne magnetic and radiometric survey were flown over the license area by Aeroquest Airborne Ltd. Line spacing was between 200m and 1.6km. Comprehensive analysis and interpretation is underway on the geophysical data, with a full report outlining this year's results to follow early 2012.

An initial interpretation of the geophysical data, combined with field observations, has allowed confirmation of dimensions for each of the targets highlighted during this year's field season, especially in poorly exposed areas. At this early stage, preliminary interpretation indicates the potential for structural stacking and thickening of the iron formation, most distinctly in the Havik East target.

It must be noted that substantial bodies of haematite mineralisation, such as De Dødes West, do not have significant magnetic content and do not produce obvious geophysical anomalies. Any magnetic signatures present in areas of haematite mineralisation will be due to the residual presence of magnetite, rather than haematite.

Stratigraphic Correlation

The iron-bearing metasediments of the Lauge Koch Kyst supracrustal complex in Melville Bugt have long been correlated with the Mary River Group of north-central Baffin Island. Recent work undertaken at Red Rock has sought to qualify these correlations based on a comparison of new field data with geology, structure, metamorphism and geochronology in the published literature.

Initial findings indicate that both the Lauge Koch Kyst and Mary River Group are Neoarchaean in age and unconformably overlie Meso- to Neoarchaean basement orthogneisses. They have both been metamorphosed to at least amphibolite facies and show geometrically similar fold structures.  The two units have a comparable stratigraphy, with significant thicknesses of iron formation overlying interbedded psammite-amphibolite and underlying quartzite (see FIGURE 4). Oxide facies iron formation is dominant, comprising a mixture of massive to banded haematite and magnetite. Where developed, massive haematite occurs as specularite or martite, formed from the alteration of primary magnetite, yielding iron contents  greater than 64% iron in both units.

Figure 4

http://www.rns-pdf.londonstockexchange.com/rns/0888U_3-2011-12-15.pdf

2012 Program

Planning for a potential 2012 exploration program is underway, with integration of these assay results, geological mapping and the full geophysical interpretation to define a program of intensified exploration. This would be expected to include exploration drilling to start to define the sub-surface extent of the iron mineralisation discovered at surface this year, with additional detailed mapping, trenching and geochemical sampling of prospective targets. Preliminary Resource Estimation work will be carried out should this be warranted by the drill results received. 

Continued regional and prospect definition exploration is planned alongside the drill program to continue to generate new areas of interest in the very prospective ground at Melville Bugt.

A 2012 program would also be expected to include a full exploration program over the extension to the existing tenement between the De Dødes & Havik Prospects, as only brief reconnaissance was possible during the 2011 program. Geophysical surveys identified magnetic anomalies totalling 9,500m strike length, within the licence enlargement area. These magnetic anomalies have similar magnetic signatures to the Havik targets visited this year, with the added potential for additional haematite mineralisation, as discovered at Haematite Nunatak, not easily seen in aeromagnetic surveying.

About the Melville Bugt Project

The recent purchase of the Mary River Iron Ore Project in neighbouring Baffin Island, Canada, highlighted the potential of the region and led to the JV's original tenement applications. Little prior exploration had taken place in the area in advance to Red Rock's 2011 field season, with regional mapping undertaken by Geological Survey of Denmark and Greenland during the 1970's.   

The 1,013km² Melville Bugt license is located in north western Greenland, predominantly within 200km of seasonally ice-free coastline with deep water access. The area is situated 1,500km north of Nuuk and 130km south of the nearest major settlement of Qaanaaq. The Company is awaiting final approval for an adjacent 558km² license extension, applied for on the basis of this season's positive field results. RRR's JV vehicle NGL also holds a prospecting license for Western Greenland.

The area covered by the concessions, and additional areas now applied for by the joint venture, constitute a potentially major but as yet undrilled iron ore province, though one with limited detailed mapping and structural information, and therefore uncertain economic significance. The short 2011 RRR/NAMA JV program effectively constitutes the first economic exploration of the area.

The Company has an earn-in agreement with North Atlantic Mining Associates Limited ("NAMA") under which it has already earned 25% in NAMA Greenland Ltd ("NGL"), which holds the exploration concessions at Melville Bugt, North West Greenland.  Red Rock has the right to increase this percentage to 60% by funding 2012 exploration and declaring a mineral resource.

The Melville Bugt Iron Ore Project tenements constitute an extensive area of Archaean- Palaeoproterozic crystalline shield, which based on key geological events, is interpreted to form part of the north east trending late Archaean Committee Belt, which extends from northern Baffin Island, Canada, where it hosts the 365Mt @ 64.6% Fe Mary River Iron Ore project.

Regional mapping carried out by the Greenland Geological Survey between 1971-1980 identified numerous iron occurrences. The majority of which occur as Algoma type banded iron formations hosted within the 2.7 billion year old Lauge Koch Kyst supracrustal complex.

For further information contact

Andrew Bell	020 7402 4580 or 07766 474849	Red Rock Resources plc	Chairman
Sandra Spencer	020 7402 4580 or 07757 660 798	Red Rock Resources plc	Public and Investor Relations
Peter Trevelyan-Clark/ Ben Jeynes	020 7444 0800	Religare Capital Markets	Nominated Adviser
Nick Emerson	01483 413500	Simple Investments Ltd	Broker

 Updates on the Company's activities are regularly posted on its website, www.rrrplc.com.

Competent Person Statements

The information in this report that relates to Exploration Results is based on information reviewed by Mr Richard Evans, who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Evans is an employee of the Red Rock Group of Companies and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking, to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" and as a "Qualified Person" as defined in the Note for Mining Oil & Gas Companies, June 2009, of the London Stock Exchange. Mr Evans consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Forward Looking Statements

This report contains 'forward-looking information' that is based on the Company's expectations, estimates and projections as of the date on which the statements were made. This forward-looking information might include, among other things, statements with respect to the Company's business strategy, plans, objectives, performance, outlook, growth, shareholder value, projections, targets and expectations, Mineral Reserves and Resources, results of exploration and related expenses, property acquisitions, mine development, mine operations, drilling activity, sampling and other data, grade and recovery levels, future production, capital costs, expenditures for environmental matters, life of mine, completion dates, uranium prices, demand for uranium, and currency exchange rates. Generally, this forward-looking information can be identified by the use of forward-looking terminology such as 'outlook', 'anticipate', 'project', 'target', 'likely', 'believe', 'estimate', 'expect', 'intend', 'may', 'would', 'could', 'should', 'scheduled', 'will', 'plan', 'forecast' and similar expressions. Persons reading this report are cautioned that such statements are only predictions, and that the Company's actual future results or performance may be materially different.

Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the Company's actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information. Forward-looking information is developed based on assumptions about such risks, uncertainties and other factors set out herein, including but not limited to the risk factors set out in the Company's Annual Report. This list is not exhaustive of the factors that may affect our forward-looking information. These and other factors should be considered carefully and readers should not place undue reliance on such forward-looking information. The Company disclaims any intent or obligations to update or revise any forward-looking statements whether as a result of new information, estimates or options, future events or results.

 

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