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Red Rock Resources PLC: DEEP DIVE
OVERVIEW

Red Rock Resources re-cycles Jupiter Mines dividend into other opportunities

The cash flow provides ballast against dilution, allowing the company carefully to consider each new opportunity on its merits
Red Rock Resources re-cycles Jupiter Mines dividend into other opportunities
OVERVIEW: RRR The Big Picture
Shipping out the ore from the Tshipi manganese mine
 

 

  • Portfolio of assets across diverse commodities and jurisdictions

  • Dividends from Jupiter Mines providing cashflow

  • Restructuring of African Battery Metals could offer substantial upside

 

What Red Rock Resources owns

Red Rock Resources owns around 1% of Jupiter Mines, a manganese producer with an asset in South Africa.

It also has a stake in Steelmin LTD, a metal smelting complex located in Jajce, Bosnia. This is projected to generate €35mln in revenue and €7mln in earnings once in production.

There’s also a 75% economic interest in the Migori gold project in Kenya, and an early stage gold exploration project in Ivory Coast.

In copper and cobalt the company holds a 50.1% interest in a joint venture in the Democratic Republic of Congo, one of the world’s major copper and cobalt producing jurisdictions.

In oil and gas there is a small 4.64% stake in an onshore oil exploration play in Benin.

Red Rock also holds 1.69mln shares in sister company Regency Mines (LON:RGM), which has exposure to nickel and coal, amongst other commodities.

Most recently the company acquired 100,000 shares in African Battery Metals (LON:ABM) as part of a wider refinancing package.

Inflection points

  • Continuing cash flow from Jupiter Mines half-yearly dividends
  • Government of Kenya to rule on right to operate at Migori
  • Restructuring of African Battery Metals could unlock value
  • Ongoing activities in the DRC, following recent elections

Chairman Andrew Bell upbeat about Red Rock’s positioning

"It is a great relief and an important development that the Presidency of the DRC is going to pass relatively seamlessly to a candidate of the opposition, and a sign of the growing political maturity of the country and its neighbours,” says Red Rock chairman Andrew Bell.

“We have suffered no disruption in our work and currently expect none. We are now quite positive on the prospects for our main Congolese licenses, and so will have to decide where to focus our efforts and whether to seek joint venture partners to progress some of them.

“In Kenya, bringing this matter to a conclusion and regaining our 1.2 mln ounce gold resource there, with all its exploration and expansion potential, is our most immediate priority.

Blue sky 

Red Rock posted higher losses in the half year to December with a write-down on its stake in Jupiter Mines leadig to attributable net losses of £2.1mln (£4.62mln profit).

Australia-listed Jupiter is paying dividends, however.

For the year ended February 2019 the payment was 7.5c and as manganese prices have been steady dividend payments are expected to continue. 

Red Rock owns 18.525mln shares in Jupiter (0.95%), which means a dividend receipt of A$1.39mln (£750,000) for the year just ended.

 

 

 

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