Australian Joint Venture

RNS Number : 2293L

Red Rock Resources plc

29 April 2020

 

Red Rock Resources PLC

("Red Rock" or the "Company")

Australian Joint Venture

29 April 2020

Red Rock Resources Plc, the natural resource development company with interests in gold, manganese and minerals, announces an update on its wholly owned subsidiary Red Rock Australasia Pty Ltd ("RRAL").

The Company through RRAL has applied for EL 007271, a 130 sq km exploration license area in the Victoria Goldfield of Australia south of Ballarat, and has agreed to issue new shares in RRAL to Power Metal Resources plc ("POW")(AIM:POW) to give POW a 49.9% shareholding in RRAL.

Red Rock Chairman Andrew Bell comments :

"Red Rock's origins lay in Australian exploration from 2005 on and now we are going back.

The Company's Australian subsidiary Red Rock Australasia Pty Ltd was incorporated in April 2008 and for a number of years conducted active exploration as an incubator of exploration projects. In the last two years it has not been active and has held no licenses, although it has reviewed various opportunities.   

The introduction of an exciting opportunity in the Victoria Goldfields came at the same time as -POW, which has no Australian subsidiary, expressed a desire to enter the Australian exploration market, and Red Rock agreed to make RRA available as the application vehicle for the two companies and to explore the license as a joint venture.

By sharing their energies and the risks and costs of exploration, the partners can maximise their effectiveness without needing to take on additional staff or overhead. 

There is an increasing momentum of exploration at the Victoria Goldfields following the remarkable discoveries at Fosterville, where in Q1 2020 Kirkland Lake produced 159,864 oz at 42.4g/t. Historic mining in the Victoria Goldfields has  been alluvial or at shallow depths and they have been underexplored in modern times. The potential at depth is largely unexplored. Our license application, EL 007271, the Blue Whale project, is at the important historic gold mining centre of Ballarat, where in the neighbouring license the Ballarat mine is now in production. As at 30 September 2019 Liongold, the operator of the Ballarat mine, stated gold production since reopening in 2011 the mine as 296,000 ounces.

The Blue Whale project covers an area with a known gold endowment in the heart of one of the world's most famous gold mining districts, now coming back to life, and is a significant strengthening of Red Rock's exploration portfolio." 

HIGHLIGHTS:

· POW to pay the license application expenses, currently $2,159.30, to become a 49.9% shareholder in RRAL, a wholly owned and currently non-operating exploration subsidiary;  

· RRAL to be renamed to reflect the new business identity and may acquire further exploration tenements in Australia;  

· Paul Johnson, Chief Executive Officer of POW, is to join the board of RRAL and POW and RRR will be joint operators of the Blue Whale project and will contribute to the funding requirements of RRAL in line with their shareholdings;  

· RRAL has commenced gold exploration project acquisition with the submission of an application for a circa 130 sq km exploration licence area, EL 007271, in Victoria, Australia;  

· The new licence application to be called the Blue Whale gold project is located in the south-western portion of the Victoria Goldfields, 120km northwest of Melbourne and adjacent to and south-east of the producing Ballarat gold mine owned and operated by Castlemaine Goldfields Pty Limited, a wholly owned subsidiary of Singapore based Liongold Corporation; to the North of the Ballarat mine at Creswick are tenements owned by ECR Minerals (AIM:ECR);  

· The current application follows approximately the boundary of the former EL 4996 tenement, an area which has historically produced 112,055 oz gold (102,641 oz alluvial, 9,444 oz hard rock from shallow mining); ¹  

Further Information

· Liongold's  adjacent Ballarat mine has been producing 40,000 oz a year at an average grade of 5.6g/t Au from underground mining and has historically produced over 13 million ounces of gold mainly derived from alluvial mines;  

· The broader Ballarat area produced over 160t of gold between 1851 and 1917 (88t alluvial and 72t hard rock); within this, within that Ballarat East produced 47 t at 10 g/t between 1857 and 1917; ²    

· Ballarat East mining took place along a 16km 800m wide NNE trend from Black Hill in the North to Buningong in the South, and the application covers the southern extension along strike of this trend, including Buningong.

^1.  Open File Report for Navarre Discovery No.1 Pty Ltd by Dr Allison Dugdale of Geological Research Services, 10.9.09, "Exploration Potential of EL 4996", citing Geological Survey of Victoria database and summing individual mines' production, noting considerable number to east of license where no production records exist.

^2.  Finlay I.S. and Douglas P.M. 1992, Ballarat 1:100,000 mines and deep lead map geological report, Geological Survey of Victoria Report 94

OTHER INFORMATION

RRAL has 1000 shares of $1 each outstanding, all of which are owned by Red Rock. The cost of the acquisition of 49.9% of RRAL by POW is the costs of application, currently $2,159.30. The total assets of RRAL as at the last balance sheet date were $600.

Andrew Bell is a director and shareholder of POW, and has therefore abstained from the board decision in relation to the arrangements with POW.  

All references to $ in this announcement are to Australian dollars.

The information contained within this announcement is considered to be inside information prior to its release, as defined in Article 7 of the Market Abuse Regulation No.596/2014 and is disclosed in accordance with the Company's obligations under Article 17 of those Regulations.

For further information, please contact:

Andrew Bell 0207 747 9990                                                          Chairman Red Rock Resources Plc

Scott Kaintz 0207 747 9990                                                           Director Red Rock Resources Plc

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

Mark Treharne 0203 700 2500   Broker Pello Capital Limited

 

END

 

 

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