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Red Rock Resources - Impact on COVID-19 Pandemic

RNS Number : 5365H
Red Rock Resources plc
25 March 2020
 

Red Rock Resources PLC

("Red Rock" or the "Company")

Update on Impact of COVID-19 Pandemic

 

25 March 2020

 

Red Rock Resources Plc, the natural resource development company with interests in gold, manganese and minerals, announces an update on the impact of COVID-19 on its business and prospects.

The pandemic has had impacts in all the key locations where the Company operates:

Democratic Republic of Congo

Over 30 cases have been recorded, with one death, with initial cases linked with arrivals from France and Belgium. Flights have been suspended and schools, bars and restaurants closed. The mining centre and second city, Lubumbashi in Haut-Katanga, is on a 48 hour lockdown after arrival by air of two infected persons from the capital, to allow contact tracing.

Planning for a new stage of exploration on the Luanshimba license, 80% owned, which is prospective for copper and gold, continues.

Meanwhile the last confirmed Ebola patient in the country has been released from hospital. A summary of the lessons learnt from this outbreak is on the Médecins sans Frontières website (msf.org).

South Africa

The country has 554 cases, with no deaths, all but a dozen or so imported by travellers, which is the highest number in sub-Saharan Africa. With fears of a rapid increase in infections as the weather cools, and a large immunocompromised population, the Government has taken action, imposing a 21 day lockdown from midnight on 26 March. Most shops and businesses are to close, and all but key workers confined to their homes. Mines have been closed for 21 days. Most international flights have been stopped. Schools have been closed.

It was initially unclear  whether this applied to open pit mines, but following clarification it appears that only coal mines supplying power stations are exempted and the Tshipi manganese mine (49.9% owned by Jupiter Mines Ltd (ASX:JMS) in which the Company is an investor) has closed its open pit mine for the 21 day period. 

Kenya

With 25 cases, and no deaths, Kenya has been early and proactive in taking measures to prevent spread. Schools closed, self-isolation and testing were introduced, and flights from countries with confirmed cases were stopped for 30 days. Now all international flights will be suspended from midnight 25 March. A compulsory 14 day quarantine on arrivals has been imposed.

Offices including Government offices remain open, and the Company has continued to maintain its camp and deal with business in the normal way. Further short term Government measures are anticipated.

Red Rock Chairman Andrew Bell comments: "For most of the first ten weeks of the year management were travelling overseas in anticipation of the current shutdowns, returning just as airports were being closed. The Company is therefore up to date on local developments and has had many interactions, now being followed up, with its local counterparts.

We are not currently able to visit any of our operations due to travel restrictions. We do not anticipate that this will inhibit our activities in the near-term.

The countries in which we operate have taken actions which should reduce the rate of transmission and keep numbers at a level where tracing, isolation, and testing can be brought to bear to eliminate infection, as in East Asia.

We have some confidence in the capability of the Governments in the African countries in which we work to handle epidemics of this kind. There are also fewer means of internal travel, and recent experience of handling epidemics. In this pandemic, countries are also learning from each other.

We note the recovery of economic activity and demand in China, evidenced by the return of normal conditions in the manganese market and the increasing manganese price over recent weeks.

China needs manganese, and particularly South African manganese, for its steel industry and to avoid shortages it is necessary that production resumes after the shortest possible delay.

The effect of the pandemic on economic activity in Europe, and on financial markets, has been severe however. The Company's share price has been affected. We are grateful to our shareholders for their calm, and for the support they have given us, in what for many investors may have been a stressful time. We feel for them. We know it is our responsibility to ensure that  the Company will be running as normal and that we must spare no efforts in preparing the Company for the period ahead, as well as the opportunities that may emerge.

The monetary expansion that is under way in many countries has the potential to create several benefits. One of these, that we already see, is in demand for gold, the price of which has already risen. Another, after a short interval, may be to market liquidity.

From this point forward, therefore, the Company sees upside potential rather than a potential for more downside surprises".

The Company will issue its interim results before the end of March.    

For further information, please contact:

Andrew Bell 0207 747 9990                                                       Chairman Red Rock Resources Plc

Scott Kaintz 0207 747 9990                                                        Director Red Rock Resources Plc

Roland Cornish/ Rosalind Hill Abrahams 0207 628 3396            NOMAD Beaumont Cornish Limited

Tim Sohal 0203 700 2500                                                              Broker Pello Capital Limited

 

 


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Price: 0.305

Market: AIM
Market Cap: £2.13 m
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