Transaction completion and operational update

RNS Number : 2872X

Red Rock Resources plc

05 May 2016

 

Red Rock Resources plc

("Red Rock" or the "Company")

Completion of Transaction; Operational Update

Issue of Shares

5 May 2016

Completion of Transaction

Red Rock Resources plc, the mining and exploration company with interests in gold and oil production, announces that further to the announcement of 28 April 2016, the acquisition of 6,006,587 shares (9.645%) of Goldstone Resources Limited ("GRL)("Goldstone") has completed and accordingly the Company has issued and allotted to the vendor, Unity Mining Ltd (ASX:UML) ("Unity Mining"), a company listed on the Australian Stock Exchange, 21,315,971 new Red Rock shares credited as fully paid.

In addition, Red Rock will issue to Unity Mining 21,315,971 options giving the right within two years to exercise each option into a new Red Rock share at a price of 0.66 pence per share.      

Application has been made to the London Stock Exchange for the 21,315,971 new ordinary shares of 0.01p each, which will rank pari passu with all existing ordinary shares, to be admitted to trading on AIM ("Admission").  Admission is now expected on or around 6 May 2016. 

At the closing price of Goldstone on 3 May 2016, 3.88p, the value of Red Rock's holding in Goldstone was £233,055 compared with an acquisition cost of £112,500.

Update on Shoats Creek

As announced on 24 March 2016, the LM 21 well is expected to spud in mid-May 2016. Red Rock has funded its proportionate share of the cost for its 20% WI (and 14.4% NRI).  Further updates will be provided as appropriate. 

Update on Colombia

Para Resources Limited (TSXV:PBR)("Para") reports that the El Limon gold mine in Antioquia, Colombia, has restarted production after a USD 2.5m refurbishment. Para reports that the commissioning phase of the processing cycle began on 18 April and the full circuit will be in operation from 6 May 2016, at an initial rate of 40 TPD (tons per day), with month by month improvements thereafter. Para states that the second ball mill is expected to come on line in July 2016, at which point production is expected to increase to 200 TPD, with material mined by local miners supplementing the 100 TPD it expects to derive from the El Limon mine. Para further states that once steady state production has been achieved, it expects to produce over 20,000 oz of gold per year with a projected all-in sustaining cost of cUSD 600 per ounce.

The full statement is available on Para's website.

Para Update - 3 May 2016

Para is listed on the TSX Venture Exchange, and at the closing price on 3 May 2016 had a market capitalisation of CAN $20.0m. On 13 January 2016 Para announced a letter of intent to acquire Colombia Milling Ltd, the acquiror of Red Rock's Colombian interests, and this acquisition has subsequently been completed.

Red Rock has a principal payment of USD 225,000 in respect of the sale of its Colombian interests due in August, and will receive royalties from production at El Limon from May 2016. In addition, Red Rock holds a promissory note from the purchasers of El Limon for US $ 1m.

Red Rock Chairman Andrew Bell states: "We are pleased to have concluded the transaction whereby we and Metal Tiger plc both became substantial shareholders of Goldstone. That company requires new direction, but clearly has great potential and intrinsic upside.

The focus of Red Rock remains the generation of cash flows from its two key business areas, onshore oil and gas, and gold. With the generation of revenues at Shoats Creek having begun, and gold royalty flows about to begin, two important milestones in that process are being passed, and we expect these income sources to build through the remainder of the year.

Red Rock is also initiating an internal review to ensure that it is properly positioned and structured for the growth ahead."

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 0129 351 7744                                         Broker Dowgate Capital Stockbrokers Ltd

 

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