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Red Rock Resources - Update on Jupiter Mines

RNS Number : 2646Y
Red Rock Resources plc
07 September 2020
 

Red Rock Resources PLC

("Red Rock" or the "Company")

Update on Jupiter Mines Dividend and Iron Ore Spin Off

 

7 September 2020

Red Rock Resources Plc, the natural resource development company with interests in gold, manganese and minerals, announces, further to the update of 8 July 2020, an update in relation to its investment in Jupiter Mines Ltd (ASX:JMS)("Jupiter").

Jupiter has released the following statement:

"UPDATE ON IRON ORE SPIN OFF

The Board of Jupiter Mines Limited ("Jupiter") (ASX.JMS) has approved progressing the execution of the initial public offering ("IPO") of its Central Yilgarn Iron Ore ("CYIP") assets. An IPO will crystallise value from the CYIP assets via a 3-pronged strategy:

1.         Development of the Mount Mason DSO Hematite Project on a fast track basis;

2.         A consolidation platform for growing the existing DSO resource base; and

3.         Explore creative options to advance the Mount Ida Magnetite Project in the mid-term,leveraging upon the existing rail and port infrastructure and the dwindling DSO resources in the Yilgarn.

Jupiter has appointed Greg Durack as the Chief Executive Officer to lead the IPO and implement the above strategy. Greg's biography is included as an appendix to this announcement." [there is then appended to the announcement, the full text of which may be found at www.jupitermines.com, the biography of Mr Durack].

Jupiter has also announced the interim dividend declared by its operating entity in South Africa:

"TSHIPI DECLARES ZAR330M H1 DIVIDEND

Jupiter Mines Limited ("Jupiter") (ASX: JMS) is pleased to announce that the Board of Tshipi é Ntle Manganese Mining Proprietary Limited ("Tshipi") has declared a dividend to its shareholders of ZAR330 million for the first half of FY2021. Jupiter will receive ZAR156 million (approximately A$12.7 million; net of withholding tax). Jupiter will also receive ZAR25 million (approximately A$2 million) in marketing profits.

Despite the COVID-19 lockdown period in South Africa which resulted in decreased production, and depressed manganese prices, Tshipi remained profitable and maintained a healthy positive cashflow.

This dividend, yet again, demonstrates the strength of Tshipi's world class, low-cost operations throughout the cycle.

The amount of the Tshipi dividend was prudent, with sufficient cash being retained for working capital, for possible capital expenditure relating to the proposed ramp up study and to mitigate the continuing challenges in the market.

The Jupiter Board will consider the dividend to Jupiter shareholders along with its half year results, due to be released by 30 October 2020".

Red Rock Chairman Andrew Bell comments: "Higher iron ore prices seem likely to persist for some time, with Chinese iron ore demand for steelmaking running at record levels in 2020 despite Covid-19, and Jupiter has decided to float off its iron ore interests. Red Rock welcomes this development, both as a holder of Jupiter shares and as the owner of a royalty over the large Mt Ida iron ore deposit.

Although a cautious view has been taken by Tshipi in considering its dividend declaration at a point where it was unclear whether South Africa had passed the peak of infections by the virus, Jupiter itself has had a policy of a 70% plus payout, which in practice has been about 90%".     

Further Information

The Central Yilgarn Iron Ore Project consists of (a) the Mt Ida magnetite deposit, where a 1.23 bn ton JORC compliant Indicated Resource of 29.79% Fe in its Central Zone, capable of beneficiation to a 66.65% concentrate, and a JORC compliant Inferred Resource of 615m tons at 28.86% in the Northern and Southern Zones, was announced by Jupiter on 8 January 2013, and (b) the Mt Mason DSO haematite deposit, where JMS announced a 5.9m ton Measured and Indicated Resource of 60.1% ore on 30 January 2012. 

Red Rock has a holding in Jupiter Mines valued currently at approximately AUD 4.0m (£2.21m). The Company also has a 1.3% gross revenue royalty over the Mt Ida iron ore project. Anglo-Pacific Group plc has an obligation to purchase 0.45% of this royalty interest from Red Rock for $8m upon the achievement by Jupiter of certain milestones in relation to Mt Ida, namely (a) a definitive feasibility study and decision to proceed, and (b) commercial production.

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

Mark Treharnel 0203 700 2500                                                     Broker Pello Capital Limited

 

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