Rockfire in contention to win Greek zinc deposit

RNS Number : 6248W

Rockfire Resources PLC

23 December 2021

 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

23 December 2021

Rockfire Resources plc

("Rockfire" or the "Company")

Rockfire in contention to win Greek zinc deposit

Rockfire Resources plc (LON: ROCK), the gold and base metal exploration company, is pleased to announce that it has reached the "Preferred Tenderer" status in an open international tender. The tender is for a 100% interest in the right to explore and mine a high-grade zinc deposit in the Hellenic Republic of Greece ("Greece"). The Company is currently in the process of submitting the final phase of the tender.

Highlights

· The Greek Government recently conducted an open international tender for participants to apply for the exploration and mining licence over the Molaoi Zinc Project ("Molaoi Project" or the "Project") in the Peloponnese region in southern Greece. Rockfire is participating in this tender under a Memorandum of Understanding ("MOU") with a local Greek company, Hellenic Minerals I.K.E. ("Hellenic"), which is the applicant in the tender. Hellenic has recently been notified of its status as one of three "Preferred Tenderers".

· Should Hellenic be the successful final applicant, Rockfire will acquire 100% of the shares in Hellenic to acquire 100% ownership of the rights to explore and mine the Project. The rights are valid for 30 years and includes the right to mine.

· Molaoi is a volcanogenic massive sulphide ("VMS") deposit with stacked, folded lodes and an initial non-JORC mineral estimate dating back to 1981. The estimate was subsequently upgraded in 1988 following additional drilling by the Greek Government. More than 150 drill holes, including diamond drilling, have been drilled into the deposit.

· In 1988, an underground portal and a 600m-long exploration decline were developed by the Greek Government to access the western-most massive sulphide lodes. The exploration decline was developed to obtain bulk samples for metallurgical purposes. If Hellenic's application is successful, Rockfire would examine opportunities to redevelop this underground access as a priority.

· Some of the many outstanding drill assay intervals from drilling in the 1980s include the following examples. Most drilling was diamond drill core.

o  10.45 m @ 10.63% Zn, 1.45% Pb and 62 g/t Ag  (Hole AN011 from 79.30 m)

o  15.0 m @ 11.94% Zn, 1.96% Pb and 66 g/t Ag  (Hole AN017 from 136.40 m)

o  7.0 m @ 14.96% Zn, 2.13% Pb and 63 g/t Ag  (Hole AN028 from 187.00 m)

o  7.0 m @ 19.17% Zn, 2.89% Pb and 76 g/t Ag  (Hole B010 from 43.00 m)

o  9.9 m @ 18.06% Zn, 2.87% Pb and 91 g/t Ag  (Hole B011 from 184.50 m)

o  2.8 m @ 26.51% Zn, 1.87% Pb and 80 g/t Ag  (Hole BGXIII from 57.00 m)

· No historical analysis for gold or copper has been undertaken and Rockfire believes potential may exist for additional metal credits.

· Only 1.5 km of a strike of more than 6 km has been explored, providing enormous upside for additional resource expansion. The entire 6 km of strike is included in the area being applied for. Intermittent historical drilling has intersected high-grade zinc in most holes drilled along the 6 km of strike.

Terms of the Acquisition of Hellenic  

Upon successful granting of the Molaoi exploration and mining licence to Hellenic, Rockfire shall acquire a 100% shareholding in Hellenic, with the issue of 50 million new ordinary shares in Rockfire, at a nominal 1p share price to Mr. Georgios Skevas (the sole shareholder of Hellenic) or his nominee/s. If successful, this issue is expected to occur within the next three months.

On achieving a minimum JORC or NI43-101 resource of 400,000 tonnes of zinc-equivalent metal content, Rockfire shall make a 50% cash and 50% share payment of a total value of £400,000, with shares being issued at a 5% discount to the 5-day VWAP share price in Rockfire at the time of the RNS of the JORC, to Mr. Georgios Skevas or his nominee/s. It is expected that this issue will occur within the first three years of exploration.

A gross Production Royalty on saleable product of 2% will be payable to Mr. Georgios Skevas or his nominee/s following the commencement of commercial production from the Project. Rockfire shall have the Option to acquire the Production Royalty for a cash consideration of £1,000,000 at any time. If a commercial zinc mine is deemed feasible, the acquisition of the Royalty is likely to occur following the first five years of exploration and successful feasibility/environmental studies. The maximum consideration payable on this transaction is £1,900,000.

Hellenic was established by Mr Georgios Skevas in April 2018 with the sole purpose of acquiring the Molaoi licence. It currently has no assets or liabilities and is 100% owned by Georgios Skevas. Subsequent to the transaction, it is proposed that Mr Skevas will remain on the board to assist with the exploration and development of the project.

Upon successful granting of the licence, Hellenic shall relinquish all its board seats to be replaced by board members proposed by Rockfire. Upon successful granting of the licence, Mr. Georgios Skevas will have all shares in Hellenic transferred to Rockfire within 30 days.

In recent months, Rockfire has provided Hellenic with technical experience and financial input throughout the tender process. The final stage of the tender process is nearing completion and Rockfire expects a decision on the winning bid within the next 90 days. A refundable tender security deposit of €50,000 has been provided by Rockfire for the submission of Hellenic's bid. Should Hellenic's bid be successful, Rockfire will have a 100% interest in the exploration and mining rights to Molaoi for the next 30 years.

David Price, the Chief Executive Officer of Rockfire, first identified the Molaoi Project in 2005 from archived scientific reports. There is an historic agreement between Hellenic and David Price which entitles him to 50% of all income (including shares and Royalties) derived from the sale, joint venture or farm-out of all projects acquired by Hellenic and/or the sale of the Company itself. The independent Directors of Rockfire believe that the Molaoi Project represents excellent potential and expands Rockfire's existing base and precious metal portfolio. The independent Directors also believe the acquisition of Hellenic is in the best interest of the Company and all shareholders. David, due to his involvement with Molaoi and Hellenic, abstained from the Board's decision to approve this transaction.

Gordon Hart, Chairman of Rockfire, said:

"The Molaoi Project may represent a transformational project for Rockfire. If Hellenic is successful in the final stage of the tender process, then Rockfire will have a 100% Greek subsidiary with an important zinc deposit in a tier 1 jurisdiction. The Greek Government is proactive in securing sound investment in its resources sector and Greece has a proven and active mining industry.

"Molaoi has advanced development via a 600 m-long exploration decline and has been extensively diamond drilled over a strike of approximately 1.5 km. The deposit remains open along strike for an additional 4.5 km to the north and is open at depth. VMS deposits tend to be layered and there are already good indications that multiple layers of zinc occur, providing upside for further ore definition. The lack of historical analysis for copper and gold would also be an opportunity for Rockfire to add significant value to the project.

"Molaoi has been tested on several occasions for metallurgical recoveries. A study in the early 1980s identified excellent recoveries of zinc and other elements. In the late 1980s, a secondary round of tests revealed issues with lower recoveries and higher extraction costs. Rockfire intends to address these issues as a priority by testing modern metallurgical methods and improved extraction processes.

"The tender process has been underway for several months and Hellenic (with the assistance of Rockfire) has completed the first phase of the process and been awarded "Preferred Tenderer" status. The second and final phase of the process is now underway, with Rockfire lodging the documents on 22 December 2021. Of course, it is important to state that there is no guarantee that Hellenic will be the final, successful bidder.

"Our team is working hard to build material value in Rockfire. The Company's enviable portfolio includes:

· A drilled JORC resource of 200,000 ounces of gold at Plateau

· A large-scale, recently drilled copper asset, with a JORC resource pending at Copperhead

· A potentially large-scale copper asset at Copper Dome

· A high-grade historical zinc resource at Molaoi (should Hellenic be successful in its bid)

"The Company is positioned for solid growth over the coming years. The market will be informed of the result of the Tender when that decision is made."

For further information on the Company, please visit www.rockfireresources.com or contact the following: 

Rockfire Resources plc:	[e-mail]
David Price, Chief Executive Officer
Allenby Capital Limited (Nominated Adviser & Broker)	Tel: [phone]
John Depasquale / George Payne
Matt Butlin / Kelly Gardiner
Yellow Jersey	[e-mail]
Sarah Hollins / Henry Wilkinson	Tel: [phone]

About the Molaoi Zinc Deposit

The Molaoi Zinc Deposit ("Molaoi") was discovered by the Institute of Geology and Mineral Exploration of Greece in 1980, as part of its internal geological resource investigations. In subsequent years, the Greek Government undertook geological mapping, geochemical sampling, and geophysical surveys. Drilling of more than 150 holes was undertaken by the government and by 1983, a portal and 600m-long decline was developed to the western-most massive sulphide lodes.

Molaoi represents an outstanding project in a tier 1 investment destination. Greece offers a low-risk jurisdiction (sovereign, political and personal) with a modern mining legislation and an active and progressive mining industry. Hellenic Minerals I.K.E. is a private company incorporated and operational in Greece. The Molaoi Project offers potential for rapid conversion of non-JORC historical mineral estimates to JORC resources, and with an improving outlook for base metals, the Project provides Rockfire a timely and exceptional growth project.

The Project has had two estimates of mineral content over the years, however neither of them comply with either the JORC or NI43-101 guidelines. An initial estimate in 1981 was followed up with additional drilling, which subsequently fed into a second estimate in 1988. Mineralisation has been drilled for 1,300 m along strike (north-south), 200 m across dip and down to the -50rl level (215 m below surface).

Through extensive research of European mining projects, Hellenic Minerals identified Molaoi as a strategic and important zinc resource. Hellenic instigated participation in the open international tender and has recently been supported by Rockfire in both a technical and financial capacity to attempt to win the bidding process. Hellenic is now deemed a "Preferred Tenderer".

Notes to Editors

Rockfire Resources plc (LON: ROCK) is an exploration company with a portfolio of 100%-owned near-surface gold and large-scale copper projects in Queensland, Australia. Each of the gold projects are located within 50 km of operating gold mines and the Company's copper projects lie within 250 km of Australia's largest copper refinery.

The Company's flagship project, the Plateau Gold Deposit, is part of the Lighthouse Tenement, and bears significant geological similarities to the nearby Mt Wright gold mine (45km to the northeast), where 1.5 million ounces of gold have been mined. More than 14,000 m have been drilled within the Lighthouse tenement.

Drilling to date at the Company's copper projects, Copperhead and Copper Dome (35 km and 85 km southwest of the town of Proserpine respectively), are indicative of large-scale porphyry targets. Both projects have been drilled by previous explorers but remain under-explored, leading the Board to believe that they demonstrate significant exploration upside potential.

Rockfire Resources has adopted a strategy of growth based on advancing exploration across its existing portfolio of projects, as well as the continual assessment of opportunities to acquire outstanding strategic mineral projects worldwide.

The Company is led by a highly skilled management team, with a proven track record in exploring and discovering projects.

 

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