Drilling contract awarded at Mikei Gold Project

Red Rock Resources PLC

Drilling Contract Awarded at Mikei Gold Project

30 June 2021

Red Rock Resources Plc ("Red Rock" or "the Company"), the natural resource development company with interests in gold, manganese and copper announces that a drill contract has been entered into with Base Drilling and Mining Services Co. Ltd for a reverse circulation ("RC") drill programme at the Mikei Gold Project ("MGP" or the "Project") in Kenya.

HIGHLIGHTS:

·    2,000m RC drill programme to start at central KKM prospect

·    Infill and step-out drilling to improve Resource classification and size

·    Option to increase the programme

·    Mobilisation to site expected next week

·    c20 holes in initial drill plan

·    Targets range from shallow to over 200m depth

The programme will be for a minimum of 2,000 metres of reverse circulation ("RC") drilling in the central part of the Project within the KKM prospect area.

This follows the announcement of a revised Mineral Resource Estimate ("MRE") on 22 February 2021, covering the five prospects which together currently make up the MGP, and the completion of the comprehensive drill planning exercise referred to in the interim results released on 30 March 2021. This exercise drew both on the recommendations accompanying the MRE report ("Report") prepared by CSA Global (UK) Limited ("CSA") and on a hole-by-hole analysis by the Company's current and former geologists of Red Rock's 3.4 terabyte database of MGP exploration results.

The object of the programme is to improve the confidence and classification of future MREs at the MGP through infill drilling, and by targeted step-out drilling to potentially increase the size of the Mineral Resource.

The initial programme may be increased, and is intended to lead to further drilling of other parts of the Project covered by the MRE.

Red Rock Chairman Andrew Bell comments: "We have renovated the Mikei Camp and built an experienced technical team including some former employees who worked on the area with us before 2014.

Base Drilling was selected as our drill contractor after a competitive tender process, and we look forward to working with this experienced company.

We expect this infill and step out drill programme to give us some promising results, as well as testing the deeper mineralised zone. It is focussed on the KKM prospect where the 2021 MRE was most conservative in its adjustment downward of the 2012 MRE, and where there is most potential benefit from establishing the continuity and extent of the conceptual pit shell. 

Elsewhere our in-house team has finished a ground magnetic ("GM") survey and initial interpretation at the MK prospect, a future drill target where we seek more clarity on the structure, and has now moved to conduct ground geophysics and mapping, including GM and induced polarisation ("IP"), on some targets in the eastern license.

We have great confidence in the prospects for expanding our Resource through the exploration we are now beginning to undertake".         

Further Details and Background

The MGP comprises two prospecting licences which cover approximately 245 km2, namely PL/2018/0202 and PL/2018/0203, over the Migori Greenstone Belt, and are located along the northern margin of the Tanzanian Craton. The licences extend 63 km along strike of the belt, which also hosts the Kilimapesa Gold treatment plant. The North Mara Gold Mine, which is operated by Barrick Gold, is located 30 km to the south of the MGP in Tanzania.

Regional exploration in the project area began in the early 1930s and culminated in the identification and subsequent mining of the Macalder volcanogenic massive sulphide (VMS) base metal mine.

In 2010, Red Rock began the extensive task of file organisation, data digitisation and compilation of available historical data, following which CSA performed cross-checks and validation steps prior to loading it into a Structured Query Language (SQL) database using Datashed. During 2011 and 2012, Red Rock undertook an infill drilling program at all five of the lode gold prospects; MK, Kakula-Kalange-Munyu (KKM), Kakula-Kalange-Munyu West (KW), Nyanza (NZ), and Gori Maria (GM) within PL/2018/0202.The Report published earlier this year documented the results of Mineral Resource estimation work initially conducted in 2011 and 2012 and revised in 2021 in order to report the Mineral Resources according to JORC (2012) guidelines.   

JORC (2012) differs from earlier editions of the JORC Code in that for a Mineral Resource to be estimated it requires the application of "reasonable prospects of eventual economic extraction" ("RPEEE") principles. This has resulted in the case of the Mikei MRE in the calculation of pit shells supported by conceptual cost and gold price forecast parameters. Any material outside or below the reporting pit shell was updated as "Not Classified" since it did not meet the criteria to be reported as a Mineral Resource.

The total Mineral Resource Estimate, at both Inferred and Indicated levels, was estimated at:

15.13 Mt @ 1.49 g/t Au with contained metal content of 723 KOz Au

Key Points of the Report:

·    MRE covered the five prospect areas covered by the 2012 MRE

·    Application of RPEEE principles required by JORC (2012) led to the exclusion of some previously estimated Resource areas and a consequent 39% reduction in Resource ounces of gold

·    Gold grade of the MRE for the same reason increased by 18% to 1.49 g/t

·    Some material previously stated as Indicated in the oxidised zone was downgraded to Inferred reflecting uncertainties relating to the terrain model and the extent of artisanal activity since 2012

·    Recommendations for a first stage step-out drilling programme were made to potentially increase the size of the MRE 

All prospects, except GM, were classified as Indicated and Inferred Mineral Resources. GM was classified as Inferred only, mainly due to the relatively low average RC drill recovery of 62%.

Due to the uncertain lateral extent and depth of artisanal mining at the Mikei prospects, and the lack of topographic data to accurately deplete the Mineral Resource, all oxidised material was classified as Inferred Mineral Resources.

The term "reasonable prospects for eventual economic extraction" (RPEEE) implies a realistic inventory of mineralisation which, under assumed and justifiable technical, economic and development conditions, might, in whole or in part, become economically extractable. The assumption is that the Mikei prospects will be extracted by open pit mining. The MGP block models were assessed for RPEEE by applying conceptual benchmarked costs to calculate reporting pit shells. The following conceptual parameters were applied for open pit mining:

·    Mining cost: US$3/tonne

·    Processing cost: US$22/tonne ore

·    Pit slope angle: 52°

·    Recovery: 90%

·    Royalty: 7%

·    Gold price: US$ 1,800/troy ounce.

The Mineral Resource was reported as that material within the RPEEE pit shells, and above a cut-off grade of 0.5 g/t Au. The Mineral Resource was reported as of 18 January 2021 (Table 1).

Table 1:   Mineral Resource for the Mikei prospects reported at a cut-off of 0.5 g/t Au, as of 18 January 2021

Note:

·    Computational errors may exist due to rounding.

For comparison, there follows the MRE produced in 2012 (Table 2):

Table 2:   Mineral Resource for the Mikei prospects reported at a cut-off of 0.5 g/t Au, as of December 2012

The 2021 Mineral Resource utilised the same block models that were used to report the 2012 Mineral Resource. No additional exploration data have been collected at the project since reporting the Mineral Resource in 2012, therefore the grade and density estimates are still valid as they are representative of the available data.

The technical information in this release has been reviewed by Mr Joseph Komu, a member of AusIMM and the Project Manager of the Project. He is a member of a recognised professional organisation and has sufficient relevant experience to qualify as a qualified person as defined in the Guidance Note for Mining, Oil and Gas Companies published by AIM .

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

For further information, please contact:

Andrew Bell 0207 747 9990                                                                             Chairman Red Rock Resources Plc

Roland Cornish/ Rosalind Hill Abrahams 0207 628 3396                            NOMAD Beaumont Cornish Limited

Mark Treharne 0203 700 2500                                                                        Broker Pello Capital Limited