Update re Kansai Mining

RNS Number : 7343T

Red Rock Resources plc

01 October 2010

 



RED ROCK RESOURCES PLC

Update re Kansai Mining

Dated: 1 October 2010

Red Rock Resources plc ("Red Rock" or the "Company"), the gold mining and exploration company with projects in Kenya and Colombia, and interests in steel feed  and uranium, notes the announcement made yesterday to the NEX board of the TSX Venture Exchange by Kansai Mining Corporation ("Kansai", NEX:KAN) that it has reached agreement with IPCM, an international private equity group, to sell Kansai's interests in two of its subsidiary companies, Mid Migori Mining Company Limited ("MMM") and Compania Minera Adamantine C.A. for a total cash consideration of C$40 million. The agreement is subject inter alia to Kansai shareholder and regulatory approvals, but Red Rock expects to support the transaction and it is expected that on completion Kansai shareholders will receive a total C$0.275 per Kansai share with CS0.240 expected to be paid by approximately 20 December 2010 and the balance of C$0.035 on final settlement.

Red Rock's acquired a holding of 10,000,000 new Kansai shares, as announced on 30 November 2009, for a total consideration of C$100,000.  As announced on 3 December 2009, Red Rock has an option to acquire an interest in a further 29,629,000 existing shares in Kansai, bringing the number of shares in which it is interested to 39,629,000, or 35.2 per cent of Kansai's issued capital as enlarged by the issue of the new shares.  The option, which was acquired for C$360,000, is exercisable for a total further consideration of C$10.  Red Rock intends to exercise this option and, on the assumption that the Kansai IPCM transaction completes, would expect to receive a total C$10,897,975 (approximately £6.7 million) subject to any relevant Canadian withholding taxes in return for its total investment of C$460,010.

Red Rock's interests in MMM will not be affected by the Kansai IPCM agreement.  These interests were acquired pursuant to an agreement with Kansai dated 14 August 2009 under which it agreed to acquire a 15% shareholding in MMM for a total consideration of US$725,000, of which US$350,000 has been paid in cash and the balance has been paid in Red Rock shares. A further 45% shareholding in MMM is issuable to Red Rock upon completion of a bankable feasibility study on the Migori gold project by September 2015.

Enquiries:

Red Rock Resources plc          Andrew Bell, Chairman                               0207 402 4580

                                               Sandra Spencer, Public and

                                               Investor Relations                                        0207 402 4580

Nominated Adviser

Religare Capital Markets          Peter Trevelyan-Clark/Ben Jeynes               020 7444 0800

Broker

Simple Investments Ltd            Nick Emerson                                              01483 413500

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

 

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