www.rrrplc.com
Red Rock Resources plc is a minerals company focussed on the discovery and development of gold, iron ore and other minerals. The principal operational focus of the Company is gold and base metal exploration in Kenya, gold production in Colombia and early stage iron ore exploration in Greenland. The Company’s iron ore interests are also held through its strategic holding in Jupiter Mines Limited (ASX:JMS) and its royalty interest in an iron ore project. Red Rock adds value to its projects through various strategies and realises value through strategies which can include production, sale, joint venture, retention of royalty and spin offs.
Red Rock Resources shares up as it reveals positive scoping study for Macalder tailings project
Shares in Red Rock Resources (LON:RRR) were lifted this afternoon after the company released a positive scoping study for its Macalder tailings project in Kenya.
The study showed that the project could support an average annual production of 10.5k ounces and a four year mine life.
This is based on the current global resource announced in October last year of 1.286 million tonnes at 1.65 g/t gold and 33.5 g/t silver.
Key considerations to the document, which was completed by London-based Saint Barbara, were the preferred mining and processing routes, plant scale and costs, throughput rate, operating costs, project life, community and environmental impacts.
The key findings were a life of mine of four years, average production of 10.5k ounces gold per year and a tailings reclaim rate of up to 328,500 tonnes per year.
The parameters included gold recovery of 61.5 per cent and a price for the yellow metal of US$1,550 per ounce.
Red Rock said that two versions of the base case scenario were modelled - the main difference being the costs associated with using either new or used processing plant and mining equipment.
Assuming a gold price of US$1,550 per ounce, both scenarios indicate the capacity to generate annual free cash flow of between US$5.6 to 6.8 million during production.
This indicates that the capital costs for the process plant and associated infrastructure could be paid back in under three years, the company pointed out.
The two scenarios produce a net present value (NPV) of around US$1.5 to 3.5 million over the life of the project.
Red Rock said it believed the positive results of the study for Macalder reinforces the firm's "strategy of boosting its exploration efforts with cash flow generative production projects".
