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Red Rock Resources raises £600,000 for working capital

Published: 21:10 29 Sep 2010 AEST

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Red Rock Resources (LON:RRR) has boosted its working capital with £600,000 after placing 10 million shares at 6 pence.

Edison Investment Research has recently stated that Red Rock shares could potentially be worth 20 pence, offering an upbeat outlook after analysing the progress the company made during summer.

The research house highlighted the Mount Ida deposit held by Red Rock’s partly owned Jupiter Mines (ASX:JMS), which potentially has between 1.1 and 1.3 billon tonnes (Bt) at grades of 30-40% iron.

Based on the lower limit, Edison estimates a 330 million tonne (Mt) in-situ iron resource and given an industry average value of US$3.53 per tonne, giving it a value potential of US$1.165 billion and indicating that Jupiter’s shares could “rise appreciably from the current level”.

This equates to US$0.727 for each Red Rock share, while Jupiter currently trades at A$0.270, or US$0.261.

The research report said that Mount Ida could be generating between US$76.6 and US$306.5 million, at 5 million tonnes per annum (Mtpa) and 20 Mpta respectively, over a 20 year life.

Edison has estimated that the total resource at Red Rock’s Mid Migori gold project in Kenya is worth around US$304 million.

Red Rock could make a further £200,000, which would be the first consultancy payment from its Columbian partner in 2010, should the El Limon and La Aurora mine restart gold mining on schedule in November.

Earlier this month, Red Rock subscribed for 12.5 million shares in Regency Mines (LON:RGM), taking its interest to 17.9 million shares, or 3.68% of the company.

Regency in turn owns almost 30 percent of Red Rock.

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