Red Rock Resources (RRR) has announced results and emphasised that it has a balance of gold, copper/cobalt and manganese exposure that plays into the trends it sees developing...
Firstly, the results for its year ended 30th June 2020 showed a profit of £5.2 million – that though reflecting slightly more than that written back as licences in Kenya (gold) were returned to it; it noting the potential to build on the foundation of a 1.2 million oz Mineral Resource Estimate and corporate discussions on this. The balance sheet showed current assets against liabilities of minus £3.8 million, £2.1 million worse than the prior year. However, there was also £2.8 million of ‘non-current asset’ investments - and the company recently noting its holding in Jupiter Mines (ASX - JMS) now approximately £2.2 million and in Power Metal Resources (POW) £1.1 million - and a £1 million placing.
There’s also that Jupiter is to distribute to its shareholders its iron ore interests via a separate listing early this year – Red Rock set to benefit both as a shareholder and as it holds a 1.3% gross revenue royalty over one of the iron ore interests with there an obligation for a purchase of 0.45% for $8 million on the achievement of certain milestones re. that project. There’s also interests in Congo, where currently a ground geophysics field programme is under way (“the indications from preliminary analysis are encouraging”) and a recent arbitration interest.
With the shares at 1.05p, it’s all with a market cap here of £10.2 million. With dividends from recovering Jupiter Mines production to fund administrative costs, the question is what is the overall asset backing and the key here is the 50.1% owned joint venture Red Rock Australasia. This is looking to establish a strong ground position in the Victoria Gold Fields, with 14 applications the first three of which are well advanced. It will soon be in a position to start work on them and to seek a stock market listing on the TSX. Awash with offers of funding, we believe that Red Rock's post IPO stake in Red Rock Australasia will be worth a multiple of the current market capitalisation. As such, despite the shares already massively up from the 0.145p hit in March and well over 50% up on our share tip, our target price is 1.5p and one could see the shares starting with a 2 or a 3 this year.
Filed under: Red Rock Resources, Buy2LetCars.Com, FRC, Deloitte, Autonomy, WANdisco, HotStockRockets
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