Last checked at 5 Apr 2017 15:38
Red Rock Resources plc
("Red Rock" or the "Company")
Colombia Update
5 April 2017
Further to the announcement of 23 January 2017, Red Rock announces an update in relation to the sale of certain assets including the Company's wholly owned subsidiary American Gold Mines Ltd ("AGM"), the 50.1% shareholder of the El Limon gold mine, Colombia ("Sale") to Colombia Milling Limited ("CML").
Highlights:
· On 9 January Red Rock submitted a Request for Arbitration to the International Chamber of Commerce ("ICC") in relation to certain disputes with CML and its parent company
· A full settlement has now been reached and the proceedings at the ICC discontinued
· The settlement provides that:
o CML will within 60 days make a US$250,000 partial prepayment of the US$1m Promissory Note ("Note") held by Red Rock
o The balance of the Note will remain payable on 1 April 2018
o The 3% NSR Royalty will be construed as covering all gold produced from the El Limon mill site, including gold produced from third party ore
· Each side will cover its own costs
Red Rock Chairman Andrew Bell comments: "This settlement protects our royalty revenue stream by clarifying a matter that had become important following the acquisition by CML and its parent of additional gold tenements around the mine site, from which a large part of their production is planned. We have in addition compromised our claim for early redemption or conversion of our Note and will receive a substantial sum within 60 days. This is a positive outcome achieved at minimal cost and justifies the decision we reluctantly took last year to declare a dispute.
CML has made considerable progress, including commissioning a second ball mill, and as it is part of a now more diversified and better capitalised group, our risk in holding the balance of the Note for another year is reduced, and we look forward to a much stronger flow of quarterly royalty payments".
For further information, please contact:
Andrew Bell 0207 747 9990 Chairman Red Rock Resources Plc
Scott Kaintz 0207 747 9990 Director Red Rock Resources Plc
Roland Cornish/ Rosalind Hill Abrahams 0207 628 3396 NOMAD Beaumont Cornish Limited
Jason Robertson 0129 351 7744 Broker Dowgate Capital Stockbrokers Ltd