Red Rock Resources PLC (LON:RRR) shares rose on Thursday after it said it is proceeding to completion of a joint venture (JV) for the development of cobalt and copper assets in the Democratic Republic of Congo (DRC).
The AIM-listed natural resource development company, with interests in gold, manganese and oil production will acquire 50.1% on completion of the joint venture with Bring Minerals SAU, its counterparty, and local partner Vumilia Pendeza SA.
Red Rock said it has made an initial cash payment of US$250,000 under the JV agreement, with further payments due of another US$250,000 in cash, and of £490,000 payable in Red Rock shares at 0.7p each with attached 1-for-1 three-year warrants to subscribe for new shares at 1p.
It added that further payments will be made in accordance with its announcement of 30 August 2018, being US$200,000 upon the earliest of (a) confirmation of economic mineralisation to the satisfaction of the parties (b) definition of a compliant Resource at Indicated or above status or of a Reserve (c) decision to mine and US$1m as a post-completion obligation if and when commercial production begins.
Andrew Bell, Red Rock’s chairman, comments: "After due diligence, and following substitution, and the provision of alternatives in compensation for assets shown to be unavailable, we consider, following discussion with Gécamines experts and with our consultant geologist, that the assets now forming the Project justify proceeding with the transaction.”
He added: “The fact they do not include tailings means that some extra preparatory work will be required, and this is reflected in the postponement of part of the cash consideration.
“A detailed geological report by our consultant geologists Minex Consulting SA is being prepared, which will form the basis for a review, and further announcements will be made as work progresses."
Three copper-cobalt permits in Katanga
The JV partnership comprises three copper-cobalt permits in the heart of the Katanga segment of the Central African Copperbelt in the DRC.
These are the Musonoi PE4962 equivalent to 1.683km2 just 3km west of Kolwezi; the Kamukongo block PE663 some 5.268km2 in area and about 20km southeast of Kolwezi, and the 3.503km2 Kasombo South permit (PE2360) just west of Lubumbashi.
The project now encompasses important and highly prospective hard rock interests, and not the tailings which were the original objective in the conditional agreement outlined back in September 2017.
The hard rock assets are expected to be higher grade (circa 3.5%+ copper and 0.5%+ cobalt) and to provide for much greater development and exploration upside potential than tailings projects.
In afternoon trading, Red Rock shares were 4.2% higher at 0.62p.
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