Development of Lithium Assets

RNS Number : 1953K

Red Rock Resources plc

19 December 2022

 

Red Rock Resources PLC

("Red Rock" or the "Company")

Development of Lithium Assets

19 December 2022

Red Rock Resources PLC (LON:RRR), a natural resource development company with interests in gold and base metals, principally in Africa and Australia, announces, further to the announcements of 31 March 2022, 6 May 2022, and 5 August 2022, an update on its lithium assets held through African Lithium Resources Pvt Ltd ("ALR"), its subsidiary in Zimbabwe.

ALR has funded development to date from its own resources and by raising $240,000 of external funding and has now raised so far a further $80,000 of external finance for the development into small scale production of one of its lithium assets. At the conclusion of this funding round, the Company's ownership of ALR is expected to be about 50% .

An Environmental Impact Assessment ("EIA") is now being prepared for ALR's Tin Hill property, 29 km North-West of Bikita in South-East Zimbabwe. This is expected to be completed by early February, and the process of preparation of the site for mineral extraction and sale is expected to be completed some two weeks later.

A further EIA may then be prepared for a second operation on its Beatrice site where there are lithium ore stockpiles and test results have been positive.

The initial plan is to produce and sell Lithium ore with a target grade of 2% (1.5%-3%) into the local market, on a pick-up basis and with a seven day sales to payment cycle. When the operation has been stabilised, ALR plans to introduce a flotation unit in order to beneficiate the ore to 4.5%-5%, so that it may be sold into the export market. There are no immediate plans to delineate a mineral resource estimate.

Red Rock Chairman Andrew Bell comments:  

"Our local partners and staff at ALR have in the past brought small mineral deposits into test production in Zimbabwe, and this local knowledge complements our existing expertise as we accelerate progress on this project. We plan initially to exploit the top 10 metres of the pegmatite, selectively mining for saleable grade as we build experience.

ALR will be moving into small-scale trial production without having carried out extensive drilling or produced a full feasibility study. The purpose of such programmes is usually to protect the investment of considerable sums of capital, including that by third parties, by increasing as far as possible certainty in regard to the grade and extent of mineralisation.

In this case the mineralised structure is simple, the mineralisation is from surface, the capital commitment is small, and our investors have assessed the risks. Grade control will be key to getting the full benefit of the investment, but we will be working on the ground with our team.   

Our aim is to have once again a cash flow generative project in Red Rock, which will provide an internal source of funds as we move through what has become a difficult market for explorers, and so help to reduce our dependence on capital markets. "

BACKGROUND TO LITHUM PRODUCTION IN ZIMABAWE

Zimbabwe is the biggest lithium producer in Africa, and one of the largest in the world. Its pegmatites have been shown to contain high grades of lithium in the form of the minerals spodumene and petalite.

Two key lithium mining centres in Zimbabwe are Bikita, known as the site of the best known Zimbabwean producer, the Bikita mine, which is now 74% controlled by Sinomine group, and Arcturus, but there are other areas of pegmatites that are also prospective. ALR has a spread of interests both in the Arcturus and Bikita areas and elsewhere.

Recent transactions by ASX and AIM listed companies demonstrate the pick-up in interest in Zimbabwean lithium including equity stakes and debt funding for large-scale production projects provided by Chinese entities. Examples include the sale by Australian miner Prospect Resources Ltd (PSC:AX) of its interest in the Arcadia project to Zhejiang Huayou Cobalt in December 2021. It should be noted that these projects are for large scale mining and processing, and so not directly comparable with what is at this stage planned by ALR.

ALR has acquired the Tin Hill licence near Bikita and several other applications and purchases in the Bikita, Arcturus and other areas are at different stages of application and grant. An update on overall progress will be given in the New Year.

The technical information in this release has been reviewed by Mr Bakhile Batakathi, a geologist registered as a Professional Scientist with the Engineering Institute of Zambia, and a member of the Geological Society of Zimbabwe. He has acted as a consultant to African Compass International, the Company's local partner, on project origination, and is the designated geologist of ALR advising on future operations. He is a member of a recognized professional organization and has sufficient relevant experience to qualify as a qualified person as defined in the Guidance Note for Mining, Oil and Gas Companies published by AIM.

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 visit www.rrrplc.com or 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     

NOTE TO EDITORS

Red Rock Resources plc - Background

Red Rock Resources plc (LON:RRR) is an AIM listed metals exploration company focused on gold, copper and battery metals and principally active in Africa and Australia. It has historically been involved with production as well as exploration, having brought a historic gold mine back into production in Colombia and participated in the development to production of a major open pit manganese mine in South Africa.

The Company currently has gold exploration projects in Kenya, West Africa and Australia, copper/cobalt exploration in Congo, and lithium exploration in Zimbabwe.

 

END

 

 

MSCFZMMZZLNGZZM