Greenland Update

RNS Number : 8449O

Red Rock Resources plc

16 October 2012

 



Red Rock Resources

High grade haematite potential indicated by drilling at third iron prospect at Melville Bugt

16th October 2012

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 further results from its maiden drilling program in Melville Bugt, northwest Greenland.

Highlights

Red Rock is pleased to report initial results of drilling on Haematite Nunatak, the third banded iron formation (BIF) target drilled during the recently-completed 2012 maiden drilling programme in north west Greenland (Figure 1).  Four holes were drilled for a total of 491m, with all of them intersecting iron formation.

Figure 1: Location Map of the Melville Bugt Project, Greenland

http://www.rns-pdf.londonstockexchange.com/rns/8449O_1-2012-10-16.pdf

Key outcomes from Haematite Nunatak include:

·     All holes intersected haematite-dominant BIF sequences (Table 1) with multiple intervals of high grade haematite present;

·     Estimated true thickness of the BIF sequence, at this prospect, of up to 46m;

·     Intervals of massive and locally vuggy secondary haematite demonstrate Melville Bugt's potential for hosting high grade haematite mineralisation.

Table 1: Haematite Nunatak preliminary drill results - best iron intersections 

	From (m DH)	Width**        (m DH)	Est % Fe (field XRF*)	Comments
HND001	14.8	15.0	32.9%	Haematite-rich BIF, drilling issues resulted in hole being abandoned in ore
	37.0	14.1+	25.3%
HND002	13.8	17.2	28.0%	Haematite-rich  BIF
	42.0	8.6	34.5%
HND003	23.85	48.7	36.0%	Haematite-rich BIF with several intervals of enriched haematite, up to 69.3% Fe (Fig 4)
HND004	139.2	10.9	28.9%
	162.0	5.8	37.3%
	186.8	7.3	31.1%

^* Iron grades obtained from Niton field X-ray fluorescence (XRF) "spot" analyses. Chemical compositions are representative of expected grades, which will be determined by follow up assay work, however the XRF results are not considered as reliable as the full chemical analysis planned, and should be used as an indication of potential results.  A full description of the logging procedures is included below.

^** Downhole thicknesses with a '+' indicate the lower BIF contact was not reached due to drilling issues, indicating this value as the minimum thickness.

Detailed Discussion

Drill Program Objectives

The Haematite Nunatak Prospect was the third target of Red Rock's maiden drill season on the Melville Bugt Project. The target for drilling this season was an area of exposed haematite-rich BIF, which lies along strike of the as yet unexplained Tuukkaq anomaly; a 8km-long magnetic anomaly along a ridge that is capped by relatively thin, slow-moving ice (Figure 1).

The main objectives of the 2012 diamond core drill programme were to:

·     Delineate near-surface extent and continuity of BIF by drilling 100-250m deep holes;

·     Characterise geological structures that are key to understanding the 3D geometry of BIF occurrences in the licence area;

·     Assess the extent and the implications of secondary haematite replacement;

·     Obtain a JORC Mineral Resource Estimate for one or more BIF targets in the licence area if possible.

Results

The drill programme at Haematite Nunatak was designed to test the sub-surface extent of outcropping haematite-rich BIFs that returned several high grade surface samples during the 2011 field season. These samples had some of the highest iron values seen during reconnaissance across the whole Melville Bugt Project area; up to 69.4% Fe.

A 150m-spaced drill pattern was used across the target area to help define the BIF units in terms of size, shape and structure. A total of four holes were drilled at Haematite Nunatak target area and analysed using field XRF, totalling 491m (Figure 2).

Figure 2: Drillhole location plan, Haematite Nunatak 

http://www.rns-pdf.londonstockexchange.com/rns/8449O_2-2012-10-16.pdf

Figure 3: Drilling operations on Haematite Nunatak

http://www.rns-pdf.londonstockexchange.com/rns/8449O_3-2012-10-16.pdf

Preliminary field XRF geochemical results from holes drilled to date are presented in Appendix 1, along with estimated true thicknesses of the unit based on the geological interpretation below. Results across all BIF intersections average approximately 32% Fe, from these field XRF results, and all of them are haematite-dominant, with only minor traces of remnant magnetite. The best intersection has an estimated true width of 46m @ 36.0% Fe of haematite BIF. In HND003 there were a number of intervals of massive haematite enrichment of the BIF, with results up to 0.6m @ 69.3% Fe (Figure 4).

Figure 4: High-grade haematite-BIF in core from Haematite Nunatak target   

http://www.rns-pdf.londonstockexchange.com/rns/8449O_4-2012-10-16.pdf

Geological Interpretation

Haematite Nunatak

Preliminary analysis of the drill core recovered from Haematite Nunatak and interpretation of the cross-sections indicate a NE-dipping sequence of haematite BIF, with zones of intense haematite enrichment containing intervals of >95% haematite (Figure 5).

Figure 5: Cross section of HND003 & HND004 from Haematite Nunatak

http://www.rns-pdf.londonstockexchange.com/rns/8449O_5-2012-10-16.pdf

From work to date Red Rock believes that the high grade haematite enrichment at Haematite Nunatak occurs as a result of the conversion of primary micro-banded magnetite-quartz BIFs (originally ~30% Fe) to close to pure haematite (65-70% Fe) through post-depositional/secondary alteration by the dissolution and removal of silica and the oxidation of magnetite (Fe₃O₄) to haematite (Fe₂O₃). This can occur through surficial 'supergene' enrichment, usually in tropical environments; or, as a result of hydrothermal fluids, often controlled by faulting.

Unlike less altered BIFs, which are typically micro-banded magnetite-quartz or haematite-quartz, as seen at Havik East, these enriched haematite zones are largely massive and locally comprise >95% Fe₂O₃.

The controls on the enrichment process occurring in the ironstones at Melville Bugt are as yet not understood. The extent of haematisation at Haematite Nunatak and De Dødes West, and the discovery of subsurface material that is nearly 100% pure haematite confirms that pervasive iron enrichment occurs, and does occur to the ultimate extent possible. This is considered encouraging for the discovery of coherent ironstone bodies that have been completely converted to nearly pure haematite.

Further work is required to determine the nature and extent of haematite enrichment in the area; Red Rock is already sponsoring a Master's thesis on the haematisation of Melville Bugt ironstones, and investigations will continue in future field seasons.

In the north east of the target area, a steep, sub-vertical NW-SE fault, observed in field mapping truncates the BIF at depth, as demonstrated by the geological cross section (Figure 5). Further work is required to determine the displacement of the BIF horizon.

Small amount of disseminated pyrite, typically associated with structurally complex quartz veins, occurs in the deformed volcano-sedimentary sequence that hosts the BIFs at a number of places in drilling at Melville Bugt, and might be indicative of potential gold mineralisation. In addition, within two holes (HND001 and HND002) at Haematite Nunatak there are also a number of ~20cm wide bands of massive (>80%), granular pyrite occurring in narrow fault zones with associated chlorite and clay alteration. Late-stage sulphide-bearing fluids would react strongly with the iron oxides of the BIF. No sulphides have been observed internal to the iron formations, and it is not expected to be a metallurgical issue.   

Work Planned

The results from this drill programme are incomplete; samples are in transit for full laboratory analysis, and a more detailed report on the initial findings will follow. Assessment will focus on the haematisation processes to better understand the potential for significant bodies of massive haematite at both Haematite Nunatak, and elsewhere in the Melville Bugt Project. In particular the implications of high grade secondary haematisation here could have significant implications for the exploration of the 8km long airborne magnetic anomaly Tuukkaq, which lies directly to the north west of Haematite Nunatak, and other as yet unexplored magnetic anomalies in the area.  The Tuukkaq anomaly is accessible to drilling operations and is expected to be a key focus of future exploration programmes. Work on Resource Estimation within the wider Melville Bugt Project, initially on Havik East, is expected to commence later this shortly. SRK Consulting (UK) Ltd has been engaged to complete this work, and their representative Competent Person, Principal Consultant Howard Baker, has recently completed a site visit. 

Analytical procedures

All diamond drilling is being carried out by Cartwright Drilling Inc, using two heliportable CDI 500 diamond drill rigs drilling with a BTW core size. Downhole deviation surveys are conducted at the end of the hole using an Icefield Tools Gyroshot survey tool.  Orientated core measurements are taken systematically through the entire length of the hole using a Devico Devicore DC core orientation tool to allow for structural information to be obtained from the heavily magnetic ground.  Precision collar surveys are taken using a Reflex Northfinder APS system.

All geological and structural core logging, core photography, Magnetic Susceptibility measurements and sampling is carried out on-site. Magnetic Susceptibility measurements are taken 3 times each metre using a Terraplus KT-10 Magnetic Susceptibility Meter. Sampling procedures, quality assurance and control (QAQC) and Rock Quality Designation (RQD) assessments are carried out commensurate with the Company's Standard Operating Procedures, which have been approved by the project consultants, SRK Consulting (UK) Ltd. Core is halved on site, with blanks, duplicates and standards inserted at systematic intervals. One half of the core is kept for reference and the other sent to the ISO17025 accredited ALS Minerals Laboratory in Ireland for assay. Analytical work includes XRF spectroscopy on homogeneous fused glass disks, Magnetic Susceptibility, Davis Tube Recovery, with selected exploration samples being tested by Fire Assay and Inductively Coupled Plasma Mass Spectrometry.

Ahead of obtaining laboratory assays, the Company is using a Niton XL3t GOLDD handheld XRF analyser to obtain first-pass chemical compositions from the core. This analysis, alongside Magnetic Susceptibility measurements, enables the geological team to obtain field results from the core, allowing construction of a working model of the composition of iron formation as drilling progresses. The geologists operate the handheld XRF as a standard part of the core logging process, with one spot analysis every meter. Analysing core at strict metre intervals eliminates selective sampling and acts as an internal QAQC safeguard against sample bias. It should be noted that although the handheld XRF is a good indicator of bulk composition, data can be misrepresented as a result of factors, such as grain size, weathering/alteration and sample heterogeneity.  Consequently, the XRF data presented in Table 1 and the Appendix provides representative profile of the distribution of grades in iron formation at De Dødes West but should be considered an indicative result pending assay data.

Background

Red Rock currently operates under a Joint Venture agreement with North Atlantic Mining Associates Limited ("NAMA") under which it has already earned 25% in NAMA Greenland Ltd, which holds the exploration concessions at Melville Bugt.  Red Rock has the right to increase this percentage to 60% by funding 2012 exploration and defining a JORC Mineral Resource Estimate.

Enquiries:

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	Press Relations
Gerry Beaney / Daniela Amihood	020 7383 5100	Grant Thornton Corporate Finance	Nominated Adviser
Nick Emerson	01483 413500	Simple Investments Ltd	Broker

Competent Person's Statement

The information in this report that relates to Exploration Results is based on information reviewed by Mr Gary Hurst (MSci), who is a Fellow of The Geological Society of London and Member of The Society of Economic Geologists. Mr Hurst is an employee of Red Rock Resources plc and has sufficient experience which is relevant to the style of mineralisation under consideration, and to the activities being undertaken. Mr Hurst has reviewed the information in this announcement and consents to the inclusion of the 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, commodity prices, demand for commodities, 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.

Appendix 1:  Haematite Nunatak drilling information

Drillhole	UTM (mE)	UTM (mN)	End of Hole Depth (m)	Dip	Azimuth True	From (m)	BIF DH Width (m)	Est'd True Thickness (m)	Est'd Fe%*	Max Fe%	Comments
HND001	534 126	8 461 093	51	-60	212	14.8	15.0	12.3	32.9	56.4	Hole ended in BIF due to drilling issues.
						37.0	14.1+	13.9	25.3	52.2
HND002	534 126	8 461 093	126	-70	213	13.8	17.2	14.9	28.0	34.0	Haematite rich BIF
						35.2	3.8	3.5	21.8	25.4
						42.0	8.6	8.6	34.5	43.1
HND003	534 005	8 461 206	89	-61	221	23.85	48.7	45.8	36.0	69.3	Haematite rich BIF. Several intervals of vuggy, enriched haematite mineralisation
						77.05	3.3	3.0	23.9	32.5
HND004	534 100	8 461 323	225	-82	206	123.0	1.2	-	28.7	38.2	Multiple thin horizons of haematite rich BIF, within an inferred fault zone It is not possible to estimate true thicknesses from a single hole in this circumstance
						139.2	10.9	-	28.9	54.0
						162.0	5.8	-	37.3	50.2
						186.8	7.3	-	31.1	41.2

^* Iron grades obtained from Niton field XRF "spot" analyses. Chemical compositions are representative of expected grades, which will be determined by follow up assay work, however the XRF results are not considered as reliable as the full chemical analysis planned, and should be used as an indication of potential results.  A full description of the logging procedures is included in the text.

^** Thicknesses with a '+' indicate the lower BIF contact was not reached due to drilling issues, indicating this value as the minimum thickness.

 

END

 

 

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