Private Placing and Exploration Investment

RNS Number : 4641B

Red Rock Resources plc

04 March 2014

 



Red Rock Resources Plc

("Red Rock" or the "Company")

Private Placing and Exploration Investment

4 March 2014

Red Rock Resources the mining and exploration company with an iron ore project in Greenland, a producing gold mine in Colombia, a gold exploration project in Kenya, and interests in steel feed announces the completion of a private placing with a high net worth investor, as well the establishment of an investment facility focused on a new gold exploration project in Ivory Coast. 

Under the terms of the placing 21,052,631 new ordinary shares of 0.1p each (the "Ordinary Shares") are to be issued to Mr Daniel Sklan (the "Investor") at a price of 0.38 of a penny to raise £80,000 before expenses (the "Placing").  Following the Placing, Mr. Sklan will own 54,052,631 Ordinary Shares in Red Rock, which will represent 3.32% of the Company's total voting rights.  The net proceeds of the Placing will be used for working capital purposes. 

Application will be made to the London Stock Exchange for the new Ordinary Shares, which rank pari passu with the Company's existing issued ordinary shares, to be admitted to trading on AIM. Dealings are expected to commence at 8.00 a.m. on or around 10 March 2014.  Following the Placing, the Company's total issued ordinary share capital will be 1,630,050,850 ordinary shares. 

Separately, the Company has agreed to funding terms with the Investor in which £100,000 will be made available to the Company specifically for exploration (the "Investment Amount"). The Investment Amount will be used to support gold exploration activities in the Ivory Coast Gold Project (the "ICGP") which is described further below.  The Company can draw down funds in tranches by serving notice to the Investor, with no individual tranche to exceed £20,000.  The Investor will receive a gross revenue royalty of 0.6% on any production that occurs on the ICGP and will receive from the net proceeds of a sale of ICGP assets an amount equal to a return of the Investment Amount plus 15% of any realisations in excess of the Investment Amount.  The Investment Amount is to be available as and when required for exploration efforts in the ICGP.         

The ICGP is a new project for Red Rock Resources and will consist primarily of licenses currently being applied for by the Company's locally incorporated affiliates.  The Company has conducted an extensive investigation of the mineral prospects of the Ivory Coast with the object of identifying areas of interest.  A number of significant target areas for gold mineralisation have been identified in prospective geological settings to date. 

Additional announcements on the Company's plans and activities in Ivory Coast will be made in due course. 

Red Rock Chairman Andrew Bell comments:

"The 28% fall in the gold price in 2013, and decline in exploration activity in the sector, makes this an opportune time to replenish our project pipeline. Early stage exploration is an area in which we have significant experience, and is also one of the least capital intensive activities on which we can focus our efforts in 2014.

"As we have successfully progressed several of our projects in recent years, our early stage pipeline has become depleted, and some other projects may not require active exploration this year.

"Our initial findings in Ivory Coast have shown the prospectivity of much of the local geology with a number of interesting targets already identified, in what is one of the newest and most prospective gold mining countries, in the centre of the Birimian greenstone belt. 

"Further, we welcome the financial support of Daniel Sklan as a demonstration of faith in our exploration prowess, in the work we have done on the project to date and in the desirability and upside potential of Red Rock at current valuation levels.  While much of the last year has been spent in extended asset sale negotiations, where we have sought to crystallise gains and lay off risk where possible, this project brings the core focus of exploration back to the forefront of Red Rock's activities."

For further information contact:

Andrew Bell0207 747 9990 or 0776 647 4849                Chairman Red Rock Resources plc

Colin Aaronson / David Hignell 0207 383 5100           NOMAD Grant Thornton UK LLP

Nick Emerson 01483 413500                                        Broker SI Capital Ltd.

Guy Wheatley 0207 382 8416                                      Joint Broker Beaufort Securities Ltd

Rupert Trefgarne 0203 128 8817                                  Media Relations MHP Communications

 

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