Migori Mineral Resource Estimate

RNS Number : 0157U

Red Rock Resources plc

15 December 2011

 



Red Rock Resources plc

New JORC Mineral Resource Estimate Defined at Migori

Date: 15 December 2011

Red Rock Resources plc ("Red Rock" or the "Company"), a mining and exploration company with a producing gold mine in Colombia; Kenyan gold and Greenland iron ore exploration projects; and interests in steel feed, uranium and rare earths, is pleased to announce a JORC-compliant, Indicated and Inferred Mineral Resource Estimate ("MRE") of 17.75 Mt @ 1.01 g/t Au (0.5 g/t cut-off), containing 577 kOz Au for the KKM Prospect.

KKM is the first, and largest, of five mineralised prospects within the Mikei Gold Project to have JORC-compliant Mineral Resources calculated after a recent drilling program in 2011. The mineralisation of the Mikei Gold Project is contained within shear zones hosted by inter-bedded metasediments and metavolcanics of the Migori Greenstone Belt, and is a major focus of Red Rock's larger Migori Project in southwest Kenya.

JORC Classification	Tonnes (million)	Au (g/t)	Contained Au (kOz)
Indicated	16.34	1.00	524
Inferred	1.41	1.15	52
Total	17.75	1.01	577

Table 1: KKM Indicated and Inferred MRE at 0.5 g/t Au cut-off.

·     More than 90% of the KKM MRE is in the Indicated category.

·     While no direct like-for-like comparison is yet available, CSA Global (UK) Ltd ("CSA"), who prepared the KKM MRE, is confident that the MRE represents a 5-10 % increase in contained metal for this prospect.

·     Mineralisation remains potentially open at depth. Pit optimisation will be completed to determine whether these deeper zones of mineralisation, as yet untested by drilling, might be economic.

Introduction

KKM is part of a larger gold-mineralised shear system known as the Mikei Gold Project discovered in the 1980s that has been a key focus of Red Rock's successful 2011 drilling program, as reported on by the Company in November 2011. The Mikei Gold Project hosts four other prospects (see figure 1) that are scheduled for Resource Estimation work in the first quarter of 2012 as laboratory results are received and interpretation is completed.

At KKM, gold mineralisation is closely associated with silcification, sericite-chlorite alteration and sulphide mineralisation. At a local scale; shearing generated permeability within intercalated metasedimentary and metavolcanic host rocks, in preparation for the gold bearing fluids. Gold mineralisation in the Migori Greenstone Belt is typical of other Archaean greenstones elsewhere.

The KKM prospect is 2.5 km along strike and is located at the centre of the Mikei mineralised trend which has a total strike length of 7 km.

http://www.rns-pdf.londonstockexchange.com/rns/0157U_-2011-12-14.pdf

Figure 1: Resource Area for the Mikei Gold Project

Earlier Work

The Mikei Gold Project at Migori in the Nyanza Province, Kenya has undergone several phases of historical drilling since the late 1980s including a resource estimate under the Canadian National Instrument 43-101 resource reporting standard which was produced by Ddraig Mineral Resources in 2006 and is filed on SEDAR. According to this report, an Indicated MRE of 33.00 million tonnes containing 1,172,000 Oz Au at 1.10 g/t Au at a 0.25 g/t cut-off was defined in four prospects (Gori Maria, KKM, MK and Nyanza) as they are located along the same mineralised trend and are to feed the same plant.

The combined KKM and KKM-West prospects were then estimated to contain 22.1 Mt @ 0.96 g/t Au for a total of 680,000 Oz Au (Kansai, 2006) using a cut-off grade of 0.25g/t Au. The objective of the Red Rock drilling programme that has been carried out since late 2010 was to improve confidence in the historical data and to update the MRE, to increase geological and structural understanding, and to potentially increase the mineral endowment.

KKM Resource Estimation

The MRE shown in Table 1, and the complete tabulation of results displayed in the Appendix included below, was prepared by Mr Galen White, Principal Geologist of CSA Global CSA.

In total 22,187 m of historical drilling and 3,329 m of Red Rock's own 2011 drilling was used in the resource estimation for the KKM portion of the Mikei Project.

The MRE announced today and estimated by CSA in accordance with the Australasian resource reporting standard, (JORC 2004), is not directly comparable to previous resource estimates as it does not include the KKM-West area, and a more conservative 0.5 g/t Au cut-off grade has been adopted.

Results for the KKM-West area will be released as they become available. KKM-West is approximately <10% of the tonnes in the previous release figures for KKM (based on preliminary 2010 check estimates). As a result, the 2011 estimate published here represents an estimated 5-10% increase in contained metal, estimated at a higher cut-off grade.

The MRE is an upgrade of the historic resource (22.1 Mt containing 680 kOz Au at 0.96 g/t Au using a 0.25 g/t cut-off). The historic resource was for two of the five prospects, KKM and KKM-West combined.

The grade-tonnage curve is shown in figure 2 using the results tabulated in the appendix.

http://www.rns-pdf.londonstockexchange.com/rns/0157U_1-2011-12-14.pdf

Figure 2: Grade-Tonnage curve for CSA's MRE 2011 for the KKM Prospect

CSA worked with Red Rock's Project Geologists in interpreting mineralised domains following cross sectional 2D analysis, before creating 3D wireframes.

The MRE process adopted by CSA is summarised as follows:

·     The MRE was completed using Ordinary Kriging within 18 ore envelopes defined using a 0.25 ppm grade cut-off boundary.

·     Mineralised envelops honoured geological boundaries and ore geometries were informed by surface and orientated down-hole structural data.

·     Given the lack of drillhole weathering data, an oxide surface boundary was created by dropping the surface DTM by 20 m (the average vertical depth of oxidation, as determined from available drill hole data).

·     A density of 2.50 was applied to oxide, and 2.72 to fresh material based on current sample density data.

·     The estimate was carried out using Ordinary Kriging following variographic analysis to determine the directions and ranges of grade continuity. Directions of observed grade continuity honour the strike and dip of mineralised domains.

·     Raw assay data was composited to 1 m intervals prior to estimation.

·     Topcuts of 20 ppm were applied to all domains except domain 11 where a 35 ppm top-cut was applied to preserve an enclosed higher grade population.

KKM Resource Classification

The resource is predominantly Indicated. Smaller zones of Inferred are associated with small domains informed by a single hole and down-dip extremities of the grade envelopes where sample density is low and mineralisation continues at depth (see figure 3).

http://www.rns-pdf.londonstockexchange.com/rns/0157U_2-2011-12-14.pdf

Figure 3: Showing location of Indicated (Pink) and Inferred (Blue) portions of the global resource

Ongoing Work

Mineralised envelopes, within certain portions of the deposit, remain open at depth with zones of higher grade mineralisation intersected by historical holes:

·     MCP330 - 12 meters at 11.2 ppm Au from 192 m

·     MCP444 - 4 meters at 3.67ppm Au from 68 m

And Red Rock holes:

·     KKDD027 - 5 meters at 8.36 ppm Au from 139 m

·     KKDD077 - 14 meters at 2.79 ppm Au from 139.76 m

Additionally, higher grade zones display continuity and are represented by coherent units within the block model. This is shown in Figure 4 below which displays blocks > 0.75 g/t.

http://www.rns-pdf.londonstockexchange.com/rns/0157U_3-2011-12-14.pdf

Figure 4: Showing location of higher grade blocks (> 1.5 g/t) within the resource

Preliminary economic assessments, including pit-shell designs, will now be completed on the Mikei Gold Project areas. Any gaps in information, potential high grade shoots and areas of open mineralisation will likely be targeted in further exploration. Detailed delineation drilling will only be completed to upgrade the Resource to Measured category as part of a feasibility study should there be areas where the Indicated mineralisation is considered likely to be sufficient to generate mineable Reserves in the near term.

For further information contact

Andrew Bell	020 7402 4580 or 07766 474849	Red Rock Resources plc	Chairman
Sandra Spencer	020 7402 4580 or 07757 660 798	Red Rock Resources plc	Public and Investor Relations
Peter Trevelyan-Clark/ Ben Jeynes	020 7444 0800	Religare Capital Markets	Nominated Adviser
Nick Emerson	01483 413500	Simple Investments Ltd	Broker

 Updates on the Company's activities are regularly posted on its website, www.rrrplc.com.

Competent Person Statements

The information related to the estimation of in-situ Mineral Resources in this release has been compiled by Mr Galen White of CSA Global (UK) Ltd. He is a Fellow of the Australian Institute of Mining and Metallurgy and has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration, and to the activity he is undertaking, to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code) and as a "Qualified Person" as defined in the Note for Mining Oil & Gas Companies, June 2009, of the London Stock Exchange. Mr White has reviewed this announcement and consents to the inclusion of the information in this release in the form and context in which it appears.

Forward Looking Statements

This report contains 'forward-looking information' that is based on the Company's expectations, estimates and projections as of the date on which the statements were made. This forward-looking information might include, among other things, statements with respect to the Company's business strategy, plans, objectives, performance, outlook, growth, shareholder value, projections, targets and expectations, Mineral Reserves and Resources, results of exploration and related expenses, property acquisitions, mine development, mine operations, drilling activity, sampling and other data, grade and recovery levels, future production, capital costs, expenditures for environmental matters, life of mine, completion dates, uranium prices, demand for uranium, and currency exchange rates. Generally, this forward-looking information can be identified by the use of forward-looking terminology such as 'outlook', 'anticipate', 'project', 'target', 'likely', 'believe', 'estimate', 'expect', 'intend', 'may', 'would', 'could', 'should', 'scheduled', 'will', 'plan', 'forecast' and similar expressions. Persons reading this report are cautioned that such statements are only predictions, and that the Company's actual future results or performance may be materially different.

Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the Company's actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information. Forward-looking information is developed based on assumptions about such risks, uncertainties and other factors set out herein, including but not limited to the risk factors set out in the Company's Annual Report. This list is not exhaustive of the factors that may affect our forward-looking information. These and other factors should be considered carefully and readers should not place undue reliance on such forward-looking information. The Company disclaims any intent or obligations to update or revise any forward-looking statements whether as a result of new information, estimates or options, future events or results.

APPENDIX

INFERRED
Au (g/t) cut-off	SG	CUM_VOL	CUM_TONNES (Mt)	Au (g/t)	Total Troy Oz
1.90	2.72	65900	0.18	3.35	19,279
1.80	2.72	70140	0.19	3.25	19,960
1.70	2.72	76320	0.21	3.13	20,904
1.60	2.72	83880	0.23	3.00	21,990
1.50	2.72	86360	0.23	2.96	22,327
1.40	2.72	95380	0.26	2.81	23,471
1.30	2.72	120440	0.33	2.51	26,473
1.20	2.72	128800	0.35	2.43	27,384
1.10	2.72	142540	0.39	2.31	28,755
1.00	2.72	177660	0.48	2.06	31,950
0.90	2.69	204580	0.56	1.91	34,144
0.80	2.66	256840	0.69	1.70	37,955
0.75	2.70	283640	0.77	1.61	39,758
0.60	2.70	403580	1.09	1.33	46,712
0.50	2.69	523120	1.41	1.15	52,373
0.40	2.70	675120	1.82	0.99	58,273
0.30	2.71	878580	2.37	0.85	64,643
0.25	2.69	925040	2.50	0.82	65,761
0.10	2.71	934800	2.53	0.81	65,953
0.00	0.00	934800	2.53	0.81	65,953
INDICATED
Au (g/t) cut-off	SG	CUM_VOL	CUM_TONNES (Mt)	Au (g/t)	Total Troy Oz
1.90	2.68	439880	1.18	2.76	104,696
1.80	2.69	495260	1.33	2.66	113,502
1.70	2.67	581120	1.56	2.52	126,389
1.60	2.67	673060	1.80	2.40	139,396
1.50	2.67	778480	2.09	2.29	153,488
1.40	2.67	905320	2.42	2.17	169,227
1.30	2.68	1098100	2.94	2.03	191,676
1.20	2.69	1304620	3.50	1.90	213,892
1.10	2.69	1593300	4.27	1.77	242,423
1.00	2.67	1955080	5.24	1.63	274,979
0.90	2.69	2388860	6.40	1.51	310,443
0.80	2.69	2999280	8.05	1.37	355,110
0.75	2.69	3375380	9.06	1.31	380,292
0.60	2.69	4826080	12.96	1.11	464,704
0.50	2.69	6079500	16.34	1.00	524,237
0.40	2.69	7199160	19.35	0.91	567,699
0.30	2.69	8255520	22.19	0.84	599,782
0.25	2.68	8646380	23.24	0.82	609,103
0.10	2.65	9026720	24.25	0.79	615,833
0.00	2.52	9028160	24.25	0.79	615,847
TOTAL
Au (g/t) cut-off	SG	CUM_VOL	CUM_TONNES (Mt)	Au (g/t)	Total Troy Oz
1.90	2.69	505780	1.36	2.84	123,974
1.80	2.69	565400	1.52	2.73	133,462
1.70	2.67	657440	1.77	2.59	147,293
1.60	2.67	756940	2.03	2.47	161,389
1.50	2.68	864840	2.32	2.36	175,813
1.40	2.67	1000700	2.68	2.23	192,699
1.30	2.69	1218540	3.27	2.08	218,151
1.20	2.69	1433420	3.85	1.95	241,283
1.10	2.69	1735840	4.66	1.81	271,176
1.00	2.68	2132740	5.72	1.67	306,935
0.90	2.69	2593440	6.96	1.54	344,575
0.80	2.69	3256120	8.74	1.40	393,061
0.75	2.69	3659020	9.82	1.33	420,058
0.60	2.69	5229660	14.05	1.13	511,415
0.50	2.69	6602620	17.75	1.01	576,606
0.40	2.69	7874280	21.17	0.92	625,927
0.30	2.69	9134100	24.57	0.84	664,417
0.25	2.68	9571420	25.74	0.82	674,847
0.10	2.66	9961520	26.77	0.79	681,775
0.00	2.52	9962960	26.78	0.79	681,781

Contained ounces calculated using 31.1035 g/t (1 Oz, Troy).

 

END

 

 

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