Update

RNS Number : 1764H

Red Rock Resources plc

24 May 2011

 



RED ROCK RESOURCES PLC

Update - Production, Issue of Equity and Other

Dated: 24 May 2011

Red Rock Resources plc ("Red Rock" or the "Company"), the gold mining and exploration company with projects in Kenya, and Colombia, and interests in steel feed, uranium, and rare earths reports on developments.

Production

Ore mined from the El Limon mine in Antioquia, Colombia in the week to 21 May 2011 rose to 53.1 tons per day, while ore processed through the plant rose to 52.6 tons per day. After selling 707.3 grams of gold in the week to 7 May 2011 and 727.32 grams of gold in the week to 14 May 2011, 758.9 grams were sold in the week to 21 May 2011. A dore bar of 1,917 grams awaits delivery to the refinery, with estimated gold content of 974 grams (the balance being mainly silver). Production indicators from the recently reopened mine continue to improve. The newly appointed head of mining operations and development for the Company has completed an initial review of the Colombian mine and plant, and Red Rock expects steady progress towards targeted levels of output.

Further details will be provided as any written reports and recommendations become available.

Advanced exploration

Final metallurgical results from the Macalder tailings at Migori, Kenya have been received and are being analysed.

Drilling continues at Migori West and Migori East licenses.

Early exploration pipeline

The Company has exercised the option announced on 3 March 2011 to enter into an earn-in agreement with North Atlantic Mining Associates Limited  ("NAMA") and will proceed with the joint venture over exploration concessions at Thule, Greenland owned by NAMA's wholly owned subsidiary NAMA Greenland Limited ("NGL"). Accordingly, the Company will issue 1,584,442 new Red Rock shares to NAMA at a price of 9.545 pence per share, in satisfaction of the agreed exercise consideration of  £151,235 (approximately USD 250,000).

The area covered by the concessions, and additional areas now applied for by the joint venture,  constitute a major and undrilled iron ore province, though one with limited mapping and structural information, and therefore uncertain economic significance.

The Company and NAMA have amended the expected outputs of the 2011 exploration programme to include an airborne magnetic survey, mapping, and ground exploration, but not to include resource definition as in the original agreement.

Strategic holdings, including formerly directly held assets

On 12 May 2011 Jupiter Mines Ltd (ASX:JMS) announced that it had completed the scoping study on its Mt Mason DSO haematite project, and characterizes it as robust, showing an internal rate of return of between 74% and 78%.

Further details may be seen at:

http://www.asx.com.au/asxpdf/20110512/pdf/41ylydt59pp55s.pdf

Following recent drill programmes at Resource Star Ltd (ASX:RSL)'s Livingstonia uranium project in Malawi, and Cue Resources' San Antonio and San Miguel uranium projects in Paraguay, the Company expects revisions to the stated Resource and grade figures for these projects to be released shortly. The Company's strategy of continuing to reinforce its uranium exposure reflects its continued belief in the long-term prospects for the uranium market in general, and for these projects in particular.

Issue of shares

Red Rock announces that YA Global Master SPV, Ltd. ('YA Global'), which is advised by Yorkville Advisors LLC, has subscribed for 8,151,066 ordinary shares of 0.1 pence each ("Shares") in the Company under the terms of the Standby Equity Distribution Agreement ("SEDA") between Red Rock and YA Global, at a price of 7.3610002 pence per Share (the "Subscription"). The proceeds of the subscription are £600,000 before expenses, conditional on the Shares being admitted to trading on AIM.

Following the Subscription and the issue of shares to NAMA, the Company's total issued ordinary share capital will be 703,741,617 ordinary shares of 0.1p. Application has been made to the London Stock Exchange for the Shares, which rank pari passu with the Company's existing issued ordinary shares, to be admitted to trading on AIM. Dealings are expected to commence at 8.00 a.m. on 27 May 2011.

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	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

Updates on the Company's activities are regularly posted on its website, www.rrrplc.com.

 

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