Red Rock Resources plc
("Red Rock" or the "Company")
Pit Optimisation Study for the Mikei Gold Project, Migori, SW Kenya
Date: 12th June 2013
Red Rock Resources plc (AIM:RRR), the mining and exploration company with an iron ore project in Greenland, a producing gold mine in Colombia and interests in steel feed, uranium and rare earths is pleased to announce the results of a Pit Optimisation Study ("The Study") on its Migori Gold Project, in which it has a combined direct and indirect investment of approximately 47%. Based on the technical and economic parameters the Company considers that these results demonstrate economic potential and support project advancement to Scoping Study level. The pit optimisation work has been undertaken by SRK Consulting (UK) Limited ("SRK").
Pit Optimisation Results
Highlights
· Conceptual results from Pit Optimisation Study completed on the Mikei Gold Project ("MGP") supports on-going development to Scoping Study stage;
· Nyanza ("NZ") prospect followed by the MK prospect show the best potential as starter pits due to lower metal price sensitivity and favourable conversion from Mineral Resources to diluted pit shell metal inventories (NZ ~77%);
· 6.5 Mt diluted mineral inventory at 2.0 g/t Au for 419 koz Au at a stripping ratio of 4.3 (twaste:tore) contained within a 1,300 US$/oz pit shell, representative of the potential open pit mining inventory;
· Identification of potential high grade starter pits at the NZ and MK prospects with a combined diluted mineral inventory of 1.8 Mt at 3.9 g/t Au for 221 koz Au and relatively low optimised pit shell Cash Cost of 476 US$/oz Au;
· 11.4 Mt undiluted mineral inventory at 1.9 g/t Au for 689 koz Au contained within a 1,700 US$/oz pit shell, representative of the Mineral Resources limited by open pit potential; and
· The results of the pit optimisation will be used to guide further Resource development including drilling, metallurgy and a more detailed scoping level study ahead of feasibility.
A more detailed discussion of the pit optimisation results and glossary can be found here:
SRK Comments on Project Potential
SRK concludes that the work completed to date (resource modelling, metallurgical test work and pit optimisations) is sufficient for a scoping study to be undertaken for the MGP. Additional potential exists to integrate a scoping study with the adjacent Macalder Tailings Resource to develop a larger overall project for Red Rock's Kenyan assets.
SRK Comments on Exploration Potential
The pit optimisation work demonstrates that the pit shell economics are limited for the KKM, KKM-West ("KW") and Gori Maria ("GM") deposits based on the current Mineral Resource, there is however potential for larger optimised pit shells for the MK and NZ deposit if geological grade continuity is realised and lateral and/or depth extensions to the high grade ore shoots.
Detailed interpretation work is on-going by site geologists to determine the structural controls on mineralisation and delineate the high grade ore shoot at the NZ prospect. This will guide future resource delineation drilling for improving confidence in grade continuity and investigating potential lateral or depth extensions to the Mikei Resource.
Further Work
With these results, the company is working on a detailed plan of activities to examine the potential of the MGP to be developed as a small scale open pit project, with particular focus on the NZ deposit. Further work on the MGP will include:
· Drilling to test both the plunge extent of the high grade shoot at NZ, and the continuity and grade distribution within the defined system.
· Exploration drilling along the Mikei shear zone to target potential lateral and depth extensions to current 1.2Moz JORC resource;
· Advanced metallurgical test work to assess whether there is a correlation between the high sulphide content and a decrease in leach recoveries;
· Possible geotechnical (RQD) drilling, further geodetic survey, and plant design and costing, hydrology and environment will be examined;
The work completed to date on the MGP (resource modelling, metallurgical test work and pit optimisations) is sufficient for a scoping level study to be undertaken. This would provide a conceptual evaluation of the project economics inclusive of production schedules, derived operating costs and capital cost estimates and a discounted cashflow model. The results of a scoping study, in addition to an economic assessment of the MGP would provide a more detailed project evaluation on which a decision to progress the project to advanced feasibility can be made.
Company Chairman Andrew Bell comments:
"This work takes the existing Resources, at the tonnages and grades so far reported, and gives us a snapshot of optimised pits at a certain gold price and certain cost assumptions. This shows where we have opportunity, and where we need to do more work. This is an important step forward on the path to feasibility."
For further information contact:
Andrew Bell 020 7402 4580 or 07766 474849 Chairman Red Rock Resources plc
Sandra Spencer 020 7402 4580 or 07757 660 798 Investor Relations Red Rock Resources plc
Gerry Beaney / Daniela Amihood 020 7383 5100 NOMAD Grant Thornton Corp Finance
Nick Emerson 01483 413500 Broker Simple Investments Ltd
Updates on the Company's activities are regularly posted on its website, www.rrrplc.com.
The technical data included in the Pit Optimisation Study for this announcement has been prepared and compiled by Gabor Bacsfalusi, BEng, MAusIMM (CP), Senior Consultant (Mining Engineering) for SRK Consulting (UK) Ltd.
Forward Looking Statements
This report contains 'forward-looking information' that is based on the Company's expectations, estimates and projections as of the date on which the statements were made. This forward-looking information might include, among other things, statements with respect to the Company's business strategy, plans, objectives, performance, outlook, growth, shareholder value, projections, targets and expectations, Mineral Reserves and Resources, results of exploration and related expenses, property acquisitions, mine development, mine operations, drilling activity, sampling and other data, grade and recovery levels, future production, capital costs, expenditures for environmental matters, life of mine, completion dates, uranium prices, demand for uranium, and currency exchange rates.
Generally, this forward-looking information can be identified by the use of forward-looking terminology such as 'outlook', 'anticipate', 'project', 'target', 'likely', 'believe', 'estimate', 'expect', 'intend', 'may', 'would', 'could', 'should', 'scheduled', 'will', 'plan', 'forecast' and similar expressions. Persons reading this report are cautioned that such statements are only predictions, and that the Company's actual future results or performance may be materially different.
Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the Company's actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information. Forward-looking information is developed based on assumptions about such risks, uncertainties and other factors set out herein, including but not limited to the risk factors set out in the Company's Annual Report. This list is not exhaustive of the factors that may affect our forward-looking information. These and other factors should be considered carefully and readers should not place undue reliance on such forward-looking information. The Company disclaims any intent or obligations to update or revise any forward-looking statements whether as a result of new information, estimates or options, future events or results.
