Update re Jupiter Mines

RNS Number : 9641C

Red Rock Resources plc

15 March 2011

 



RED ROCK RESOURCES PLC

("Red Rock" or the "Company")

Announcement re Jupiter Mines Limited

15 March 2011

Red Rock notes the announcement made by its 4.5% owned associate Jupiter Mines Limited (ASX:JMS) ("JMS") today, in which JMS announced the delivery of a scoping study on JMS' 100% owned Mt. Ida Manganese Magnetite Project ("Mt. Ida"). Red Rock maintains a 1.5% gross production royalty in respect of Mt. Ida.

Key points of the JMS announcement, in which JMS stated that the scoping study carried out by ProMet Engineers Pty Ltd indicates a financially robust magnetite operation, include:

·      Scoping study based on a 20 year mine life, mining 25 mtpa to produce 10mtpa of Magnetite concentrate

·      Base Case capital cost is A$1,583 million, and operating costs A$62.78 per tonne of concentrate FOB

·      Project NPV is A$1,685 million at an 8% discount rate and IRR is 19.8% pa (based on a number of early-stage assumptions)

·      Major infrastructure already exists and requires little upgrading

The Scoping Study was based on the Mt Ida maiden inferred mineral resource of 530 million tonnes grading 31.9% Fe at the Central Area (which represents only 30% of the magnetite mineralization strike length). An open pit contract mining operation will extract 25mtpa ROM ore to produce 10mtpa of high grade magnetite concentrate, with an iron grade in excess of 68% Fe, a silica content of 4.5%, and very low levels of impurities (sulphur, phosphorous and alumina). An average 43.4% weight recovery was assumed, based on test work already completed. Given the grade and quality of the concentrate JMS anticipates a premium to benchmark iron ore price. Based on these attractive scoping study results a full Feasibility Study will now be launched for completion at the end of 2012 so as to identify the best strategic option to develop the project.

JMS also has a Scoping Study underway on the Mt. Mason DSO Hematite Project ("Mt. Mason") due for completion in late April 2011. Mt. Mason has an Inferred Resource of 5.75 million tonnes at 59.9% Fe and offers an opportunity to generate early cashflows from a 1.5mtpa DSO operation commencing early 2013. Jupiter plans to undertake a Feasibility Study on Mt. Mason concurrently with that for Mt. Ida.

The full text of the JMS announcement, together with an    Investor Presentation in relation to the Mt Ida Scoping Study, can be accessed via:

http://www.asx.com.au/asx/research/companyInfo.do?by=asxCode&asxCode=JMS

Enquiries:

Andrew Bell	0207 402 4580 or 07766 474849	Red Rock Resources plc	Chairman
Sandra Spencer	0207 402 4580 or 07757 660 798	Red Rock Resources plc	Public and Investor Relations
Peter Trevelyan-Clark/ Ben Jeynes	020 7444 0800	Religare Capital Markets	Nominated Adviser
Nick Emerson	01483 413500	Simple Investments Ltd	Broker

 

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