Red Rock Resources (RRR), where I am a modest recent addition to the shareholder list, has updated investors having concluded the first phase of work on the Musonoi licence in the Democratic Republic of Congo, noting “the derivation of a 3-D model that appears to support some of the assumptions on which we invested is an important staging post on our journey.”
This follows historic data including 83 old drill holes and nine cross sections on the property having been obtained and digitised. Chairman Andrew Bell adds “the next stage of interpretive work is still more important, because it will give us grade and tonnage information we can share with the investing public. We aim to start work on this immediately”.
This is with the work to-date now being given to external resource consultants, with results from any core that the company is able to identify and re-test, and the consultants to advise on any further work required for them to calculate a JORC-compliant resource.
We previously noted pilot programme potential in Congo to generate free cashflow of circa £10,000 a day for Red Rock – and, at a current 0.625p share price, the market cap here is currently sub £4 million.
With this also covered by assets (shares in Australia-listed manganese producer Jupiter Mines & cash – exceed the market cap) and dividends from Jupiter plus the Colombian royalty stream covering much reduced running costs, the downside risk here is minimal.
There are also signs of movement on Kenya, assets which we had previously written off but where Red Rock now appears to be in the process of regaining its licenses. Those gold licenses are eminently marketable and could easily be worth almost as much as the current market cap again. And that is why with limited downside risk the Red Rock story is now potentially so exciting.
I continue to rate this a buy at up to 0.8p, targeting to sell 1.2p+.
You can find out why Red Rock is so exciting at a presentation in the City on February 25 where there will also be talks by Anglo African Oil & Gas and by top fund manager Gervais Williams of Miton. To grab a free seat go HERE
Filed under: Red Rock Resources, RRR, mining, Democratic Republic of Congo,
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