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(Alliance News) - Power Metal Resources PLC and Red Rock Resources PLC on Wednesday announced the formation of a joint venture aimed at building an Australian gold exploration portfolio.
Shares in Red Rock were up 19% at 0.25 pence in afternoon trading in London, while Power Metal shares were up 13% at 0.30p.
Metals explorer and developer Power Metal will pay the, so-far minimal, licence application expenses and take a 49.9% stake in Red Rock subsidiary Red Rock Australasia Pty Ltd. This subsidiary is to be renamed to reflect this change.
The joint venture already has submitted an application for exploration licence area EL007271, totalling around 130 square kilometres in the Victoria Goldfield of Australia, south of Ballarat. This area will form the Blue Whale project.
The nearby Ballarate gold mine presently produces 40,000 ounces per year of gold at a grade of 5.6 grams of gold per tonne of ore.
Between 1851 and 1917, the Ballarat area produced more than 160 tonnes of gold, of which 47 tonnes was produced at Ballarat East.
Power Metals Chief Executive Paul Johnson said: "Historic mining in the Victoria Goldfields has been alluvial or at shallow depths, and they have been under-explored in modern times. I am delighted that, simultaneously with the launch of this joint venture, we have been able to lodge an application for an exploration licence forming the Blue Whale project near to the producing Ballarat gold mine in Victoria.
"The Blue Whale project is the company's first project in Australia, and opens the door for the potential establishment of an Australian gold portfolio. In this regard, we expect to provide further updates on Blue Whale and additional opportunities in the near future."
Separately, Red Rock announced that Jupiter Mines, in which it holds 17.0 million shares, released its annual results showing a net profit after tax of AUD95.1 million, down from AUD138.0 million the prior year.
Jupiter declared a final 0.75 Australian cents per share final dividend. Given Red Rock's stake, this will represent around AUD127,500 - about GBP66,500 - of dividend income.
By Anna Farley; annafarley@alliancenews.com
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