Update - Ivory Coast Exploration and Other

RNS Number : 1478E

Red Rock Resources plc

04 April 2014

 



Red Rock Resources plc

Update - Ivory Coast Exploration and Other

4 April 2014

Red Rock Resources plc ("Red Rock" or the "Company") the mineral exploration and development company focused on iron ore and manganese, and gold, and operating in Greenland, Colombia, and East Africa is pleased to announce it has applied for several exploration licences in Ivory Coast (Cote d'Ivoire), West Africa.

Highlights:

·      Red Rock has applied for three exploration licences in southeast Ivory Coast, along trend from Newmont's 17Moz Ahafo Gold Mine in Ghana

·      Red Rock is to provide technical advisory services to Basse Terre, a closely affiliated Ivorian company with four exploration licences under application in central Ivory Coast

Gold - Ivory Coast

Ivory Coast possesses some of West Africa's best infrastructure yet remains a largely underexplored country with exceptional mineral potential. As political stability has returned to the country in recent years, a new wave of explorers including successful gold producers have begun operations and, since 2010, opened mines.

West Africa's extensive Birimian Greenstone Belt is a fast growing region for gold exploration and production. Ivory Coast contains more than a third of the Birimian geology yet, due to the relative lack of exploration, produces less gold than neighbouring countries. Ghana is the region's greatest producer, with most production coming from the rich Ashanti Belt, home to numerous multi-million ounce world-class deposits in southwest Ghana, close by the Ivorian border.

Red Rock, through a locally incorporated affiliate, has recently applied for three exploration licences in Ivory Coast proximal to the Ghanaian border, in the same prospective greenstone units and along trend from Newmont's 17Moz Ahafo Gold Mine. The licences are located near the town of Bettié, whose name has been adopted for the new project.

In addition, Red Rock has taken a technical advisory role for Basse Terre sarl, a local affiliate which has in turn applied for four exploration licences in central Ivory Coast near the towns of Oume, Tiéningboué and Niofoin. All licences are underlain by prospective Birimian greenstone rocks and three of the four are located along trend or proximal to major gold deposits.

A map showing the locations of the licences under application is available at:

http://www.rns-pdf.londonstockexchange.com/rns/1478E_-2014-4-4.pdf

All areas under application were selected after a thorough and detailed analysis of the mineral potential of Ivory Coast by a geological team experienced in greenstone gold exploration in West, East and Central Africa, as well as Canada. Advice was also sought from in-country experts with extensive local knowledge. Criteria assessed included regional and local geology, structural trends, spatial relationships with the region's numerous gold deposits, local artisanal mining sites and other known mineral occurrences. The quality of local infrastructure and land accessibility were also taken into consideration.

Gold - Kenya

The Company continues to work with the Government, the office of the Provincial Governor, and local stakeholders as the new Constitution and administrative system bring new personnel to key positions and as the new Mining Bill nears enactment. This active engagement will enable Red Rock to adapt, and strengthen its relationships.

Meanwhile the scoping/feasibility studies announced on 17 January 2014 have progressed and a draft phase 1 report with recommendations has been submitted to the Company and is under review internally.

Further announcements will be made in due course.

Gold - Colombia

Production continues at a satisfactory level. We expect to announce quarterly figures to March 2014 when these are available.

Three underground holes were drilled to identify the orientation and location of the vein below the current lowest working level and confirm continuity. This work was terminated when sufficient information was obtained. Due to the small diameter of the drill, these cores would not be considered reliable indicators of grade. Initial plans have been prepared locally for drilling campaigns from surface to the north and south of the current working area, and these will now undergo review.

Preliminary proposals have been received from new buyers for a purchase of the Company's interest, and Red Rock expects to meet this group and another in the course of the next week. All options remain under consideration.

Greenland - Iron Ore    

In previous updates, the Company placed reliance on information received as to progress from lawyers engaged in the proposed transaction for purchase of part of the Company's interest.

Given the lack of recent progress the Company has sought, but not received, further comfort on this point.  The lawyers are unable to speak as to progress currently. Although parties have received verbal indications that the transaction will progress, there is no recent activity that shows it is being actively worked on.   In the circumstances, the probability of eventual contract with these investor parties must be reduced to some degree, and the probability of an early contract and completion must be considerably reduced.

The Company has in any case been engaging with possible alternative investors, and these discussions will continue.

In the absence of a transaction, the Company does not intend to mount an active exploration programme in Greenland in the 2014 season.

Jupiter Mines Ltd - Residual Investment

The Company retains 27,324,375 shares (1.2%) of Jupiter Mines Ltd ("JMS"), which delisted from the Australian Stock Exchange in January 2014 as it was deriving no benefit from the listing. JMS' 49% owned Tshipi é Ntle, which owns the Tshipi Borwa opencast Manganese Mine in the Kalahari Basin, continues to generate strong profits, exceeding expectations in the first year of operations.

Results to 31 December 2013 showed net assets per share of A$0.213. Those wishing to track the performance of this important part of the Company's asset base may do so through JMS's website at www.jupitermines.com, where it continues to provide investor updates and information.

Resource Star Ltd - Investment

The Company divested the uranium interests that were associated with some of its original iron ore prospects into Australian Stock Exchange listed Resource Star Ltd ("RSL") where it holds 54,908,554 shares (35.2%). A poor investment environment for uranium since the Fukushima nuclear accident has led the Company to reappraise this investment and take active measures to restructure and strengthen RSL, at the same time introducing new key investors.

Further announcements are expected to be made in the coming weeks. 

Andrew Bell, Chairman, comments:  "With our increasingly gold-directed focus, we are an early mover into Ivory Coast. Not as early as some, but with our smaller capital base we could not afford to be too early.  It is plainly evident the country holds great mineral potential, yet through most of its history it has not sought to explore or develop those resources. Only recently has this begun to change and Ivory Coast now appears set to undergo a mining revolution. It seems probable that world-class discoveries will be made, as in neighboring countries, and as noted by some of our peers the hurdle rate for investment is lower. Red Rock is extremely pleased to be part of this early wave and to have identified ground that we think is good.

With the mooted Greenland transaction, we have said that when our perception of probabilities changes, we will be prompt in advising investors. That time is now. When we receive a new or restated offer we shall announce, but our reading of geopolitics leads us to think that the Eastern European investors who were pursuing this opportunity would currently be cautious, and nobody has been able to show us this is not so. The path of prudence is to assume the negative for now.

The astonishing performance of Jupiter's Manganese mine has been the stand-out for us recently. This asset has historically been extremely important for us, and the price declined so greatly, that it is a relief to see true value beginning to show through."

For further information contact:

Andrew Bell 0207 747 9990 or 0776 647 4849                Chairman Red Rock Resources plc

Colin Aaronson / David Hignell 0207 383 5100             NOMAD Grant Thornton UK LLP

Nick Emerson 01483 413500                                            Broker SI Capital Ltd.

Saif Janjua 0207 382 8416                                                Joint Broker Beaufort Securities Ltd

Rupert Trefgarne0203 128 8817                                       Media Relations MHP Communications

 

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