Asset Review and Current Developments

RNS Number : 0021V

Red Rock Resources plc

05 August 2022

 

Red Rock Resources PLC

("Red Rock" or the "Company")

Asset Review and Current Developments

5 August 2022

Red Rock Resources Plc, ("Red Rock" or "the Company"), is a natural resource development company with interests in gold and base metals, principally in Africa and Australia.  

A review of current projects and news outlook was issued on 24 March 2022, and updated at the interim results announcement on 29 April 2022.

Highlights :

Ø Arbitration continuing in the DRC; outcome unknown

Ø Activity reduced in Kenya in pre-election period

Ø New contract signed for reverse circulation drill programme at Bilbale project in Burkina Faso

Ø Continue to expect near term listing of Elephant Oil

Ø Continue to plan listing for Australian JV gold company

Ø Strengthening of battery metal presence with lithium as well as cobalt/copper

Red Rock Chairman Andrew Bell comments : "As many will know, we recently returned from a trip to the DRC of over 6 weeks, the primary purpose of which was to participate in arbitration proceedings in Kinshasa where we are pursuing claims to our share of the sale proceeds of the key assets of a joint venture, which were disposed of without our knowledge.

$15m of these proceeds are held by the buyer of those assets pending the result of the arbitration.

In the light of shareholder speculation, we wish to set out to the best of our understanding the current situation.

After several hearings, which clarified the factual background, the arbitrators urged us and the other party to negotiate between ourselves before the arbitration concluded to arrive at, if possible, an agreed outcome.

A compromise, which represented a significant discount to what we believe to be our entitlement, but which exceeded 50% of the amount still retained by the buyer, was put to us and in the circumstances where we believed it was accepted by the other party and in deference to the wishes of the arbitrator at that time for an agreed solution, we were minded to concede, though with reluctance.

Subsequently it appeared that the representative and negotiator of the other party had either lacked authority or had changed his mind, and the negotiation ended without agreement. We now continue to assert our claim to over 50% of the total $20m principal paid or to be paid, plus damages.

The arbitral award, when and if made, and we hope it may be soon, will not now reflect a consensus arising from the negotiation of the parties, but the decision of the arbitrators. As we await it, we must consider a range of possible outcomes, and uncertainties of timing, but continue to press for a just solution which includes a resolution of the earlier court proceedings.

We emphasise that although we are confident in our case, it cannot be assumed that an award will be made, or that it will be at or above any previously discussed level.

Meanwhile the Company continues its activities elsewhere. We were delighted to see New Ballarat Gold Corporation bringing two high quality and historic assets into the portfolio, which takes that company to a new level. We are also able to announce the beginning of a small drilling campaign on two excellent targets in Burkina Faso."  

PROJECT	2022 UPDATE
Mikei Gold Project Western Kenya Gold: 723,000 oz Mineral Resource Estimate at 1.49 g/t (JORC 2012) 100% economic interest	Results of drilling of 20 Reverse Circulation (RC) holes totalling 2,093m were announced in March 2022. Drilling was over the Central KKM project area within and just outside the Resource envelope. 16 of 20 holes intercepted gold mineralisation, in 15 holes at or above cut-off grade, including: · 37m @ 0.73 g/t Au from 120m to 157m in KKRC095 (including 5m @ 2.05 g/t Au from 135m, 1m @ 1.59g/t Au from 145m, 2m @ 2.18g/t Au from 150m) · 19m @ 0.54 g/t Au from 81m to 100m in KKRC087 (including 3m @ 1.07 g/t Au from 90m, 1m @ 2.55g/t Au from 95m) · 10m @ 1.5g/t Au from 61m to 71m in KKRC103 (including 3m @ 1.02 g/t Au from 61m, 5m @ 2.23 g/t Au from 67m) · 8m @ 1.23g/t Au from 87m to 95 m in KKRC189 (including 4m @ 1.81 g/t Au from 87m, 2m @ 1.07 g/t Au from 92m) · 17m @ 1.02 g/t Au from 116m to 133m in KKRC102 (including 1m @ 3.15 g/t Au) · 6m @ 1.17 g/t Au from 8m to 13m in KKRC082 (including 1m @ 3.75 g/t Au) · 4m @ 1.37 g/t Au from 83m to 87m in  KKRC101 (including 1m @ 2.7 g/t Au) An EIA has already been obtained for drilling on four of the remaining prospects. The next stage diamond drilling programme has begun the planning process, with consultant input, the ultimate intention being a JORC Resource revision. IP, mapping, and sampling programmes have been carried out on a number of projects. With the Presidential and General Elections due on 9 August, and with maintenance and recalibration of geophysics equipment due, activities have been reduced pending the election and any post-election period of uncertainty.
Luanshimba Copper-Cobalt Project Copper/Cobalt: Katanga, DRC 80% interest	Results of first 2,469m, 29 hole, RC drill programme on the prospect were announced in February 2022. Copper intersections of significance included: · 6 metres at 0.61% (including 1 metre at 1.45%) towards the bottom of hole DRC014 at Kilembwe · 3 metres at 0.7% and 3m at 1.14% encountered towards the bottom of holes DRC019 and DRC021 at Luanshimba North. Extensive Cobalt was encountered including: · 43m at 0.13% including 11m at 0.2% at Kilembwe in DRC015 in a brecciated argillaceous arenite · 3m at 0.37% related to a fault gouge, overlying 13m at 0.10% in a brecciated argillaceous arenite at Kilembwe in DRC008 · 5m at 0.78% including 2m at 1.4% at DRC023 in Luanshimba East. Several holes ended as they were entering pyrite and chalcopyrite mineralisation. The very promising results were reviewed during the recent visit to the DRC, and it was agreed that the next step should be diamond drilling to test for Copper and Cobalt ores deeper in the sequence.
New Ballarat Gold Corporation Plc Gold: Victoria, Australia 50.1% interest	15 granted and purchased licences totalling 1,841 sq km are held around the historic mining centre of Ballarat. A further 5 licences totalling 493 sq km are completing the grant process. Encouraging results from a modest initial diamond drill programme over two target areas were received in the course of the Spring and Summer. 520m of drilling at the O'Loughlins prospect SE of Ballarat, and 340m at Pitfield/Mt Bute SW of Ballarat, had been carried out in early 2022. In May and July NBGC obtained grant of the historic Ajax Mine with recorded production of 312,789 oz at 14.8 g/t, and purchased the historic Berringa Mines, with recorded production of just under 300,000 oz at 8.3 g/t. The acquisition of these two significant assets, among the largest producing hard rock mines in the history of the Victoria gold fields, and with significant associated exploration targets, is an important milestone for NBGC. Red Rock and its JV partner are seeking a listing for NBGC, as and when market conditions permit.
Faso Minerals Ltd Gold: Boromo and Banfora greenstone belts, SW Burkina Faso 100% subsidiary	Faso Minerals Ltd (FML) through its 100% subsidiary Faso Greenstone Resources SARL holds 348 sq km of highly prospective ground acquired from local holders in the SW of Burkina Faso at Bilbale and Boulon. Applications for other areas have been prepared. A remote sensing screening of the areas using visible near infrared (VNIR), shortwave infrared (SWIR), longwave infrared (LWIR) and ALOS-1 synthetic aperture radar (SAR) imagery, was undertaken. A sampling and mapping programme covering artisanal and other areas with evidence of surface or near surface gold was undertaken at Bilbale. Two targets have been selected for immediate drilling in an reverse circulation (RC) programme for an initial 500m: one artisanal target for orogenic gold in the main Bilbale trend, and an underexplored structural target at Djikologo where previous work had intersected 11m at over 1 g/t.
LacGold Minerals Ltd Gold: greenstone belts in Côte d'Ivoire 100% subsidiary	LacGold Minerals Ltd (LGM) through its 100% subsidiary LacGold Resources SARLU has made initial applications for five prospective areas, screened from a long list, for gold exploration. The first two totalling 745.67 sq km after adjustments, at Yamassoukro and Djekanou, have been approved by the Interministerial Committee (CIM) and the signed Décrets are awaited. Official visits have been conducted to the next 2, Tienko and Korhogo. Some initial sampling has been carried out with results to be followed up upon grant. An extension area to one of the licences has been identified. An initial MMI (mobile metal ion) programme will be undertaken immediately upon grant.
African Lithium Resources (Private) Ltd Lithium: historical pegmatite areas in Zimbabwe Subsidiary	RRR has been in the process with a local partner of assembling a lithium portfolio by purchase of old mining areas and by pegging of prospective areas with evidence of good grade lithium mineralisation. Sampling has been carried out over the areas of interest. $100,000 was raised privately for a 10% project interest, and ALR will continue to seek external finance to fund its initial activities.
Other DRC interests Copper-Cobalt Cobalt	The Company's 100% owned subsidiary has obtained an executory judgment for $2.5m (being 50.1% of $5m paid to local partner VUP by a buyer) and a $2m damages judgment currently under appeal.   The buyer retains a further $15m unpaid consideration pending determination of legal claims including that of the Red Rock group. Arbitration hearings and negotiations have been held in Kinshasa in order to resolve these matters without further litigation. The decision of the arbitrators is awaited. The acquisition of a 58% interest with a participating US partner in the historic high grade Kimono cobalt project was announced on 27 June 2022.
Other	RRR has c397,873 shares in Elephant Oil Corporation, where an application for listing on a North American market has been made. Following some changes to the shareholder register, and an updating of the accounts, we hope for a mid-August to early September listing. Should the listing occur on the terms indicated to us, the Company is likely to find itself at the conclusion of a six month escrow with a valuable liquid asset. The Company retains its royalty on the El Limon gold mine in Colombia, where following extensive refurbishment and the start of production from the Cordero mine earlier this year a re-opening of the mill and a resumption of royalty payments are expected later in the year. Other non-paying royalties include the 0.75% (fully diluted) NSR royalty over the Mt Ida iron ore asset in Australia, now part of Juno Minerals Ltd, and those over the Australian joint venture gold assets. RRR notes the statement by Juno, which listed in 2021, in its interim results announced in March 2022 that "with a renewed interest magnetite iron ore, Juno commenced a review on the Mount Ida Project. The Project is on a granted Mining Lease, has significant tenure for infrastructure, and expansive water exploration licences over areas prospective for good quality water. The Mount Ida Project remains the largest magnetite resource and most technically advanced magnetite project in the Yilgarn. Juno intends to progress the completion of the Feasibility Study on the Mount Ida Project, with the objective of developing a long-life magnetite mine". Juno described the Mt Ida project as having the "potential to become a long-life tier one magnetite mine". On 3 May 2022 the JV farm-in by Hancock Prospecting to the Legacy/Hawthorn Mt Bevan Project, adjacent along strike, was announced.

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

For further information, please contact:

Andrew Bell 0207 747 9990    Chairman Red Rock Resources Plc

Roland Cornish/ Rosalind Hill Abrahams 0207 628 3396        NOMAD Beaumont Cornish Limited

Jason Robertson 0207 374 2212    Broker First Equity Limited                                                        

 

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