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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (42090)	8/25/2009 10:24:17 PM
From: LoneClone	Read Replies (1) \| Respond to of 193918

Red Rock Moves Into Gold In A Major Way, With The Acquisition Of A Stake In The Million Ounce Migori Gold Project In Kenya By Alastair Ford minesite.com “We’ve always been a little bit of a gold company”, says Andrew Bell when it’s put to him that Red Rock’s recent acquisition of a stake in the Migori Gold project in Kenya represents a major departure for the company. As chairman, Andrew has successfully steered Red Rock through the worst days of the credit crunch and out the other side, cutting a string of deals along the way, and pulling the company’s share price out of a steep dive and initiating a new upward climb. Red Rock’s shares are now trading at around 1.3p, compared to a January low of around 0.4p. To be sure, the glory days of a 3p share price, which is where we were exactly two years ago, now seem a long way away. But a note of optimism creeps into Andrew Bell’s voice as he talks about the Migori deal, almost as if he can see those sunlit uplands on the horizon once more. While it’s fair to say that gold is not a completely new asset class in the Red Rock portfolio, it’s certainly true that the focus on gold is new - so new that Red Rock has yet to adjust its website, where it boldly states that the company’s focus is on “the discovery of iron ore, manganese, and uranium”. Followers of Andrew will know that he likes to keep several irons in the fire, and that the current chapter in the iron ore and manganese part of the story is now drawing to a successful close as the company sells down its Australian assets at profit to Jupiter Mines. Red Rock’s stake in Jupiter itself remains, for now, but long term a complete exit has always been on the cards. The uranium remains too, though on a backburner, in the shape of assets in Northern Territory and Malawi. But in the last couple of weeks the company has also just turned a small £91,000 profit on the sale of a stake in West African manganese specialist Africa China Mining Corporation, a deal which brought a total of £600,000 into Red Rock’s coffers. When Minesite phoned Andrew after the Africa China Mining deal, all he would say is, “we wanted to have some working capital”. Now we know why. The new 60 per cent stake in Migori will need some looking after. There’s the initial cash element of the US$750,000 cash and shares price tag to settle, and there’s a need to get down on the ground and work out how best to proceed. Migori already boasts nearly 1.2 million ounces in the indicated category, so this is no grass roots early stage exploration play. But development work had to be suspended when Kenyan politics went into meltdown following the disputed election in 2007. That left Migori’s owner, Kansai Mining Corporation somewhat out on a limb in terms of budgeting for a resumption of drilling, and it turned instead to focus on its diamond and gemstone interests in West Africa. “I know that area of Kenya well”, says Andrew Bell. So, up stepped Red Rock Resources, ahead, it might be added, of certain other interests with Tanzanian gold properties in their back pockets. Kenya is not widely known for its gold mineralisation, but Migori runs along the Tanzanian border in the west of Kenya. “We have a number of different styles of mineralization”, says Andrew, “on a number of targets”. The succinct version, though, is that Migori covers over 300 square kilometres of ground including a 68 kilometre Archaean greenstone belt which has a number of outcropping gold shows, structures and geochemical anomalies. It also hosts the previously worked Macalder copper-zinc mine. To the east, Goldplat’s small mine has recently started producing too. So it’s an area with enormous potential. With the previous work programme having ended in inglorious limbo, Andrew Bell is confident that a re-start with Red Rock as the new operator could yield significant further ounces. “I think that there’s potentially a few million ounces there”, he says. “We can quickly get to two million. We’ve really got a complete gold camp. It’s just a question of finding it and mining it.” Such optimism surely bodes well for the future. To earn its full 60 per cent entitlement, Red Rock must complete a bankable feasibility study on Migori. But there may be some tangible production to show before then, as artisans are already on the property, producing gold and selling it. If Red Rock can pick up a piece of that action then the company’s first cash flow from production may be just around the corner.