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Red Rock Resources shares rocket as it updates on Greenland sale

The explorer revealed on Monday that the sale of a majority stake in Nama Greenland could get the formal sign-off later this month.


Shares in Red Rock Resources (LON:RRR) surged on Tuesday after revealing yesterday that the sale of a majority stake in Nama Greenland could get the formal sign-off later this month.

Shares surged over 65% on Tuesday but reached an intra-day highs of 0.81p.

Speaking to Proactive, Andrew Bell, chairman of Red Rock, suggested that with the Greenland deal now looking about to happen, and other company deals progressing, the market had been spurred into life.

"People are suddenly getting the sense, that having panicked and thought the company was more or less valueless, actually if you look at one of these assets - each one maybe supports the share price to a considerable extent," he noted.

Once the formal Greenland offer is made, he said, there will only be one condition remaining, which is that the Greenland government give approval for the transfer, something that is unlikely to cause a delay, said Bell.

Nama own the Melville Bugt iron ore property in Greenland.

Red Rock said lawyers acting on behalf of the buyer had approved the deal terms but without definitive signed agreements, a deal could not be assumed.

The sale had been earlier thrown into doubt after delays due to an investor holding significant amounts of cash in Cypriot banks at the height of that country's financial turmoil.

Meanwhile, in Kenya, at one of Red Rock’s other projects, Bell said he did not expect the firm to be affected by news on Monday that the country's government will revoke licences issued during the first five months of the year and review any possible irregularities in licensing during that period.

The time frame is between the dissolution of parliament and before the elections held under the new constitution.

Red Rock has an interest in the Macalder gold tailings project in Kenya through its direct and indirect holdings in the Mid Midori Mining Company.

The firm submitted an application for a mining licence over the small part of these Kenyan licences covering the tailings in August last year and before the period in question.

Meanwhile, at the gold mining operations in Colombia, Red Rock says an illegal stoppage, first announced last month, had not entirely ended, but the impact on production at the El Limon mine has so far been minimal.

The firm also highlighted the progress being made by 38.6% owned Australian investee Resource Star (ASX:RSL), which is currently working to re-launch itself as an oil business and set to buy a leases containing 96 wells in Texas.

Red Rock will be conducting the due diligence on behalf of Resource Star and Bell said the project is "potentially very exciting if it all works".

Finally, Red Rock revealed Monday that it continues in mediation efforts to find an optimal solution for Ascot Mining, which is currently suspended on the ISDX market following a loan default.

Quick facts: Red Rock Resources PLC

Price: 0.34 GBX

Market: AIM
Market Cap: £2.37 m

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on 1/4/16

3 min read