Red Rock Resources PLC (AIM:RRR, FRA:R2TA) said it pocketed A$2.33mln (£1.24mln) from selling a substantial part of its remaining holding in Jupiter Mines Ltd through sales in the open market.
The sales were completed at an average price of A$0.304 per Jupiter share.
As of the announcement, Red Rock retains 5,870,693 Jupiter shares.
The current share price of Jupiter is A$0.225, which it noted is 26% below the average price of Red Rock's recent sales.
Andrew Bell, chairman of Red Rock, said: “Our ability to raise over a short period a sum in excess of £1,000,000 from our share portfolio demonstrated the company's ability to respond to events and to strengthen its liquidity from internal sources as required.
“We manage our investments actively and having formed the view that prospects in the near term for Jupiter had deteriorated, were able to reduce our holdings in amounts and at prices that did not appear to affect the price in the market.”
He noted that, shortly after listing in 2005, Red Rock sold iron ore assets to Jupiter in exchange for cash, shares and a royalty, and later increased the holding to become the largest Jupiter shareholder, bringing in Pallinghurst Partners as a partner, which led to the injection into Jupiter of Pallinghurst’s manganese assets in South Africa that are currently its sole significant asset.
“Jupiter has been an exceptionally well-managed company, achieving over recent years an extraordinary near-30% annual return on assets, but the recent consolidation of shareholdings into fewer hands and the likelihood of management changes combined with a dull outlook for manganese prices convinced us that the time had come to accelerate the disposal of our stake,” he said.
“Red Rock retains other listed holdings, or holdings in companies approaching listing, in businesses where it has played a strategic role, including 45,000,000 shares valued in the market at over £900,000 in Power Metal Resources PLC (AIM:POW, FRA:2M5) (AIM:POW).
“Further announcements will be made in relation to these in due course."