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Red Rock closing on Colombia sale, will assess results from Kenya and Greenland

Diversified miner Red Rock Resources said today its expects soon to complete the sale of its gold interests in Colombia.

Diversified miner Red Rock Resources (LON:RRR) said today its expects soon to complete the sale of its gold interests in Colombia.

Canadian firm Ashmont Resources made an offer in July to buy Red Rock's subsidiary, American Gold Mines, which holds a 50.5% interest in Four Points Mining SAS (FPM). 

FPM is the owner of the El Limon and EWl Mango gold mines in Antioquia, Colombia.

Red Rock added it also expects to release a mineral resource for the MK gold prospect in Kenya “in due course” and from its iron ore deposits in Greenland before the end of 2012.

The Greenland resource would mean all major objectives had been achieved from the last two years' exploration. Red Rock said.
“Looking forward, we will then have no budgeted expenditure plans of significance and we expect our balance sheet to be considerably more liquid in 2013,” added executive chairman Andrew Bell.
He said the results from Greenland and Kenya would also be assessed to work out the next exploration steps.
“It would be our expectation that we would conduct some follow-up work in Kenya, though at a lower level than in the 2011-12 programme.” 

Bell added he expects to see a strong gold price over the coming year, while underlying market demand will keep iron ore prices above the level at which recently added capacity becomes uneconomic. 

In the absence of a decline in steel production, we believe, iron ore demand, though subject to destocking and restocking cycles, will remain high, while the installation of new capacity is subject to infrastructural constraints and will not meet analysts' projections. 

Red Rock added it will look to realise some of the new value in our projects, "either by disposals or by sharing the ongoing costs with investors who can help us take these projects forward more rapidly". 

“We will, as a priority, be looking to maximise the value of our holdings in Kenya by rationalising the structures through which they are held. 

“At the same time, by moving to hold higher levels of cash, we will be better prepared to take advantage of new opportunities that may appear.”

Red Rock posted a pre-tax loss of £4.6 mln in the year to June against a profit of £15.9 mln, though the previous year included a large one-off gain from Jupiter Mines ceasing to be an associate. Its holding in Jupiter is now 2.6% following a recent share disposal that raised US$1.54 mln.

Shares rose 3% to 1.6p.

Quick facts: Red Rock Resources PLC

Price: 1.07 GBX

Market: AIM
Market Cap: £9.82 m

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