Red Rock Resources plc reported an increase in losses of more than £1 million from its interests in Africa and Australia.
FINANCES
The company’s final audited results for the year ended 30 June 2022 showed that it had yet to generate revenue from its operations.
Pre-tax loss of £2,800,000 (2021: loss of £1,699,000) was attributed to higher costs in administration, staff at subsidiaries, accounting and increased travel.
Chairman Andrew Bell added that there had been “great progress” on the arbitration award over the sale of the copper-cobalt joint venture (JV) in the Democratic Republic of Congo (DRC), which is awaiting conclusion.
INVESTMENTS
Red Rock sold its remaining holdings in Jupiter Mines Ltd and Juno Mines Ltd in Australia, as well as shares in Power Metal Resources plc for a total £2.54m during the period.
Mr Bell said that the company’s investee company Elephant Oil faced delays in listing, leaving a gap in Red Rock’s “equity holdings buffer” but expects listing in early 2023.
He added that following a six-month hold period after listing, Red Rock may realise all or part of its holding of 397,847 shares at some US$1.85m based on a price of $4.15 to $5.15 a share.
AUSTRALIA OPTIONS
The company is looking at various options on its holding in the JV subsidiary Red Rock Resources Australia Pty Ltd (RAAL) with Power Metal Resources plc under the holding entity New Ballarat Gold Corporation plc.
The partners had intended to float RRAL but deferred the move until the gold price has recovered.
Mr Bell said that Red Rock was looking at various options for its holding in the JV with the choice possibly dependent on the outcome of the arbitration in the DRC.
“We could sell or buy to consolidate control in one partner, and we could float, or we could retain our interest as a bedrock asset in a safe jurisdiction to balance the well-defined and exciting, but risky potential in Congo.
“Some Red Rock shareholders may regret that we have not already listed, as we had indicated that this was likely to happen, but our aim is to secure the best eventual outcome for Red Rock stakeholders, not the quickest, and we and our partners believe we have our finger on the pulse of the market and have made the right decisions.”
ROYALTIES SUBSIDIARY
The company will retain royalties on all its assets which include iron ore in Australia, gold in Colombia, multiple gold and metal licences in Australia, lithium licences in Zimbabwe, gold licences in Kenya, and gold licences in Burkina Faso and Ivory Coast.
Red Rock expects to add royalties over its DRC assets, and is in the process of assembling the royalties in a dedicated royalty-holding subsidiary.
2023
Mr Bell added that the company’s 2023 budget had “considerable reliance” on receipt of judgement and arbitration proceeds from the DRC.
During the coming year, Red Rock expects to identify a “new quality project” in the DRC as well as bring into test production one or more of the lithium assets held by its Zimbabwe subsidiary.
Exploration will continue in Burkina Faso and, prospectively in Ivory Coast, partly funded by external investors.
The company will also address “as a matter of urgency” its activities in Kenya where its licences are due for renewal, operations lagged in the run up to national elections and the continuing search for a suitable partner.