Jupiter Mines - Mt Ida Project Update

RNS Number : 6792Q

Red Rock Resources plc

08 November 2012

 



Red Rock Resources

Jupiter Mines freezes spending on Mt Ida magnetite project

8^th November 2012

Red Rock Resources plc ("Red Rock" or the "Company"), the mining and exploration company with an iron ore project in Greenland, a producing gold mine in Colombia, advanced gold and copper exploration in Kenya, and interests in steel feed, uranium and rare earths, announces that Jupiter Mines Ltd (ASX:JMS)("Jupiter") has suspended spending on the Mt Ida magnetite project in Western Australia.

In its announcement, Jupiter cites increased cost estimates, depressed iron ore prices, and a strong Australian dollar. It emphasises that it will continue to meet spend requirements to protect the value of the earlier work for potential future development. 

The full text of the announcement is available at: http://www.asx.com.au/asxpdf/20121108/pdf/42b22hrnjtvb5s.pdf

Red Rock has a 1.5% gross production royalty interest in the Mt Ida project, half of which it has agreed to sell in stages as announced on 2 May 2012.

Red Rock Chairman Andrew Bell comments: "This announcement is negative as far as our royalty interest is concerned, although we can be glad that we have already received $6m from the partial sale we made earlier in the year. We also have a direct stake of 2.64% in Jupiter and in relation to this holding the announcement may have more positive impacts on us. Jupiter's $100m cash will not now be spent on a project which in current markets would not provide a good return and in which the market was showing little confidence. Instead it is suddenly available, as is the balance sheet strength of Jupiter's other shareholders, to make opportunistic investments at the bottom of the market. That is good news in our view. With iron ore trading near or below the replacement cost of resources, no return may be possible from projects which require the development of new port and rail infrastructure rather than the use of existing infrastructure. And in a depressed sector of the market, it may be cheaper to buy into projects and companies than to develop them from new. Meanwhile Jupiter's new Tshipi manganese mine has been brought in on time and on budget and is scheduled to make its first shipments this month." 

Enquiries:

Andrew Bell	020 7099 5840 or 07766 474849	Red Rock Resources plc	Chairman
Sandra Spencer	020 7099 5840 or 07757 660 798	Red Rock Resources plc	Press Relations
Gerry Beaney/ Daniela Amihood	020 7383 5100	Grant Thornton Corporate Finance	Nominated Adviser
Nick Emerson	01483 413500	Simple Investments Ltd	Broker

 

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