RE: Fixated9 Feb 2025 14:26
Zumore - so are saying RRR are guessing? I doubt it.
2024 Accounts:
DRC
Red Rock’s copper-cobalt joint venture underwent extensive analysis of the historical records up to and after the time of signing the JV in February 2019. Geologists, working for Red Rock, gathered historical data from the area and created a 3-D model of the mineralisation. Historic work had been based on much higher cut-off grades than would be used today, and aimed to test only the upper oxide layer of mineralisation. The old pit had reached a depth at maximum of c105m, compared with workings down to 1000m in nearby licences, and had on abandonment, been backfilled with several tens of metres of rocks. Our work led to an estimation of up to 180,000 tonnes of contained copper at 2.7% grade and up to 17,000 tonnes of cobalt at 0.8% grade. This study was based on 83 drill holes, assays and over 750 pages of reports. Drilling reached to a little below the pit depth. Typical grades in the area ranged from 3-5% copper and 0.5-1% cobalt.
At a current copper price of over USD 9,000 per tonne and a cobalt price over USD 24,000 per tonne, and bearing in mind that the mineralisation would have been open pit, mined from surface at a grade far above breakeven for each mineral taken individually, and that the deeper and sulphide mineralisation would have been drill tested by us to prove up further resource, it can readily be calculated that the asset was one with a value after mining costs, royalties and taxes that was very considerable and was transformative in terms of its potential effect on Company value.
It bears repeating that transforming what was originally a JV over quite mediocre assets, as our due diligence showed, into a portfolio of exceptional value and also high prospectivity in other areas was entirely the result of our perseverance, determination, and speed of analysis. Our partners were the beneficiaries, and in particular our free-carried local partner VUP .
When our work was interrupted, we had already dozens of workers working on collection of historic drill core from the Gécamines sheds at Kolwezi to verify the written record of the old drilling, and we had a plan for the accelerated calculation of a compliant Resource based on the historic record even before, or with minimal, further drilling.
Our asset was purportedly sold behind our backs by our 25% local partner in December 2019, and to be deprived of this interest that Red Rock had worked so hard to acquire was an unexpected blow that necessitated prompt follow up action. On discovery of what had occurred but been hidden from us we went to court and obtained a final and non-appealable judgment in January 2022 that we were entitled to 50.1% of the USD 5 million consideration already paid. We then began an arbitration process in relation to the USD 15 million consideration not yet paid. These current actions relate to the initial sale back to Gécamines, not the stage 2 immediate on-sale by Géca
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