Cobalt/Copper Joint Venture - Congo

RNS Number : 2333I

Red Rock Resources plc

22 November 2018

 

Red Rock Resources PLC

("Red Rock" or the "Company")

Cobalt/Copper Joint Venture - Congo

22 November 2018

Red Rock Resources Plc, the natural resource development company with interests in gold, manganese and oil production, announces latest developments in relation to the conditional joint venture agreement ("Agreement") announced on 26 September 2017 for the development of cobalt and copper assets (the "Project") in the Democratic Republic of Congo ("DRC") under which Red Rock will acquire 50.1% on completion of the joint venture.

Further to the announcements of 30 August 2018 and 28 September 2018 reducing the cost and updating certain terms of the joint venture, Red Rock considers that the conditions precedent noted as remaining in the announcement of 30 August 2018 (being defining and outlining the final areas comprising the Project and legal and technical due diligence) have now been fulfilled, and is therefore proceeding to completion with Bring Minerals SAU ("BRO"), its counterparty under the updated terms of the Agreement.

Completion Summary:        

·     Red Rock has made the initial cash payment of $250,000  

·     Cash payments of $250,000 and £490,000, the latter payable in Red Rock shares ("Shares") at 0.7 pence a share with attached 1-for-1 three year warrants to subscribe for new Shares at 1p ("Warrants"), will be made upon execution of the detailed documents governing the conduct of the joint venture

Post-Completion Obligations:

·     Further payments will be made in accordance with the announcement of 30 August 2018, being $200,000 upon the earliest of (a) confirmation of economic mineralisation to the satisfaction of the parties (b) definition of a compliant Resource at Indicated or above status or of a Reserve (c) decision to mine and $1m as a post-completion obligation if and when commercial production begins.

·     Formation of a joint venture company between Red Rock, BRO and local partner Vumilia Pendeza SA in the proportions 50.1:29.9:20

Geological Information

Extracts from the report provided by Red Rock's consultant geologists are set out below:

"The JV partnership comprises 3 copper-cobalt permits in the heart of the Katanga segment of the Central African Copperbelt. These are the Musonoi PE4962 equivalent to 1.683km² just 3km west of Kolwezi; the Kamukongo block PE663 some 5.268km² in area and <20km southeast of Kolwezi, and the 3.503km² Kasombo South permit (PE2360) just west of Lubumbashi.

Figure 1: Central African Copperbelt and Red Rock Resources projects [http://www.rns-pdf.londonstockexchange.com/rns/2333I_1-2018-11-22.pdf]

This illustration is derived from: Schuh, W., 2012. Geology of the Tenke Fungurume Sediment-hosted Stratabound Copper-Cobalt District, Katanga, Democratic Republic of Congo, Soc. Econ. Geol. Spec. Pub.16, pp299-301

Musonoi - PE4962

The Musonoi deposit lies within the Kolwezi Klippe, possibly the most prolific copper-cobalt district within Katanga that despite >80 years of mining, still holds delineated resources and target potential mineralisation.(Figures 2,3 and 4). The area is favoured by very adequate infrastructure in an established mining area.                                                                           

Figure 2: Geology and Mineral Deposits of the Kolwezi Klippe [http://www.rns-pdf.londonstockexchange.com/rns/2333I_2-2018-11-22.pdf]

Figure 3: Regional geology of the area around Kolwezi showing the Musonoi and Kamukongo deposits [http://www.rns-pdf.londonstockexchange.com/rns/2333I_3-2018-11-22.pdf]

Figure 4: Local Geology of the Musonoi Deposit and PE4962 outlined in black [http://www.rns-pdf.londonstockexchange.com/rns/2333I_4-2018-11-22.pdf]

The Musonoi deposit is based on some of the most consistently well mineralised Roan Supergroup, Mines Series strata in western Katanga region within dolomite shales, argillite and dolomites. Mineralisation occurs in proximal, laterally extensive, 6-25m thick horizons known as the Lower, Upper and Third orebodies. Classic Cu-Co mineralisation begins in the Lower Orebody (LOB) above red, oxidised, talcose dolomite argillite (R.A.T.) in the reduced G.R.A.T. dolomitic shale that prevails throughout the area and continues for 20-40metres up the stratigraphic column.

The basal profile of the LOB contains significant gold, palladium and uranium that, although not adequately quantified in the past, Red Rock believes may carry the highest grades of these metals of this style of stratiform sediment-hosted deposit in the region.

Red Rock has inherited a large database and a substantial number of recent and historical drill cores will be available for inspection and re-sampling. This work is expected to take 3 to 4 weeks.

Kamukongo PE663

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. This corridor encloses the Kisanfu, Mutanda, Deziwa and Tilwezembe deposits that contain resources or have produced large volumes of ore exceeding 1% Co (Figure 3).

The permit is underlain by a poorly exposed intrusion of mixed and brecciated Roan sediments containing at least 2 fragments of Mines Series sediments that have not been subject to modern exploration. The more richly mineralised basal sequence was mapped but the extent of any mineralisation has not been assessed.  Apart from very minor scratching by artisanal miners, mostly outside the obvious Mines Series beds, there has been little attempt to engage in any systematic exploration although archive work in Gécamines may reveal more information. The area lends itself to detailed soil sampling and trenching to delineate drill targets

Figure 5: Setting of PE663 [http://www.rns-pdf.londonstockexchange.com/rns/2333I_5-2018-11-22.pdf]

Pale blue = Roan sediments, breccias with Mines Series fragments

Figure 6: Geological map of the Kamukongo Project (1/5000) [http://www.rns-pdf.londonstockexchange.com/rns/2333I_6-2018-11-22.pdf]

Kasombo (4 Carrés of the PE2360)

The PE2360 lies at the mid-eastern part of the Kasonta anticline which hosts some well-known high-grade copper-cobalt deposits among which Luputo, Kasonta and the eleven (xi) fragments that consitute the Kasombo project. These mines have produced considerable volume of both copper and cobalt in the past. Some of them re-started to be operational in the past decade and exploration activities are currently undertaken on a few Kasombo fragments.

The area which is concerned under the agreement between Red Rock  and the Congolese company is situated at the eastern part of the Kasombo VII and XI fragments (PE4886). The exploration activities undetaken to the west of the zone reveal the existence of a zone of low magnetic intensity which was described as a burried typical R2 Mines fragment. These fragments are striking NW-SE and are inferred to extend into the western part of the PE2360.

The zone is not subject of significant exploration activities the past decades and no artisanal activities have been reported in the zone. Therefore, the area will required a detailed geochemical sampling and geological mapping to delineate any highly prospective target.

Figure 7: Settings of the PE2360" [http://www.rns-pdf.londonstockexchange.com/rns/2333I_7-2018-11-22.pdf]

ENDS

It is emphasised that none of the assets being acquired by Red Rock have any Reserves or Resources reported on to an AIM Standard.

Andrew Bell, Chairman of Red Rock, comments: "The Agreement entered into in September 2017 provided for some substitution of the original assets . After due diligence, and following substitution, and the provision of alternatives in compensation for assets shown to be unavailable, we consider, following discussion with Gécamines experts and with our consultant geologist, that the assets now forming the Project  justify proceeding with the transaction.    

The fact they do not include tailings means that some extra preparatory work will be required, and this is reflected in the postponement of part of the cash consideration.

A detailed geological report by our consultant geologists Minex Consulting SA is being prepared, which will form the basis for a review, and further announcements will be made as work progresses." 

Competent Person Statement

The technical and related information in this report relates to exploration results based on information from third parties and data compiled by Steffen Kalbskopf Pr.Sci.Nat, FGSSA and Barry Kazadi (MSc), Pr.Sc.Nat, MGSSA. who are members of the South African Council for Natural Scientific Professions. Mr. Kalbskopf and Mr Kazadi have sufficient experience in the style of mineralisation and type of deposit under consideration.  Mr. Kalbskopf and Mr Kazadi consent to the inclusion in this announcement of the matters based on their information in the form and context in which it appears. Mr Kazadi is a managing Director of Mineral Exploration Associates SARL Consultants (Minex Consulting) to the Company. Mr Kalbskopf is a self-employed consultant and managing director of Hidden Treasure Consulting and a senior associate of Minex Consulting, both independent of Red Rock.

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

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

Jason Robertson 0207 374 2212                                                Broker First Equity Limited                                                           

 

END

 

 

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