Red Rock Resources plc said it had paid $1 million of its obligation to Kansai Mining Corporation Ltd towards completing the purchase of the remaining interest in the Mikei gold project in Kenya.
The outstanding amount of $1,500,000 will be in the form of an issue of 101,550,000 new ordinary shares of 0.01p in the company at a price of 1.05 pence per share to Kansai.
The issue of the shares is conditional on the approval of the company’s shareholders who are due to discuss the payment at a general meeting on 19 March.
Kansai has agreed to sell 52,437,048 shares to be issued under the share payment to a number of substantial private investors.
Red Rock said that Kansai intended to hold the remaining 49,112,953 shares for long-term investment.
Red Rock plans to gain approval from shareholders for the issue of the shares required for the share payment and the issue of non-tradeable warrants with a life of two years and an exercise price of 2 pence to be issued to Kansai or its nominees on the basis of one warrant for each two shares issued under the share payment.
Chairman Andrew Bell said that the company’s overall position would be greatly strengthened by the move ahead of drill programmes in Kenya and the DRC and an IPO for its Australian assets.
“These payments to Kansai will complete the purchase obligations under which we acquired a 100% beneficial interest in the project and represent a milestone in the life of the company.
“Together with the publication of a new mineral resource estimate under the JORC 2012 Code, announced last week, this secures Kenya’s position as a key asset going forward.”
“The retention of a significant number of shares by Kansai will be a strong vote of confidence in our prospects.
“We look forward to welcoming a new shareholder with a long term perspective and a deep knowledge of the mining sector.”
BACKGROUND
Under an agreement announced on 15 June 2018, Red Rock acquired the 25% interest in the company’s mineral licences in Kenya still held by Kansai Mining Corporation Ltd.
The payment, part of which was $2,500,000, was to be within a short period after restoration or re-grant of the licences.
The restoration of the licences was announced on 17 August 2020.