Red Rock Resources Regulatory News (RRR)

31 March 2020

Red Rock Resources plc

Unaudited half-yearly results for the six months ended

31 December 2019

Red Rock Resources plc ("Red Rock" or "the Company"), the natural resources investment, exploration, and development company with interests in manganese, gold, copper and cobalt, and other materials, announces its half-yearly results for the six months ended 31 December 2019.

Chairman's Statement

It is three months since the Company reported its Final Results for the year to 30 June 2019, and normally we might be reporting that nothing had changed greatly since then. In some respects this is true, in that no major initiatives have been undertaken by, or developments occurred within, Red Rock in this short period. We have continued our work towards restoration of the Kenyan licenses, and been preparing a programme for renewed exploration at our Luanshimba copper/cobalt license in the Democratic Republic of Congo, as well as at our other licenses in the Congo, but these tasks for the early part of 2020 were prefigured in the statement in the Annual Report. Yet everything has changed.

The COVID-19 coronavirus pandemic declared on 11 March 2020 has shaken up the kaleidoscope so effectively as to change every market and every part of the world economy: today they all look different. The impact of these changes has been almost universally negative in the short term, with the strength in the gold market a rare exception.

The Company has announced in a recent update the response to COVID-19 in the principal countries where it operates, and the effects on Red Rock, which are limited so far. The Company will continue to review, and if necessary announce, further Covid-related developments.

Red Rock's current assumption is that although there are short term effects on the world economy, human ingenuity will find solutions and the successes of Taiwan, South Korea, Japan, Singapore, and even China in controlling the outbreaks while limiting the damage to economic activity and people's livelihoods will provide some lessons that can be adapted to apply in the Western economies. Nearer home, the templates of Iceland, Norway and Germany may already offer directly applicable lessons in testing, tracing, and reducing mortality.

Should this be correct, the bounce back will be rapid, and the extra liquidity being pumped into economies may assist this. Red Rock believes its positioning in gold and battery metals will be well-adapted for this environment. The holding in Jupiter Mines Ltd, a very low-cost major manganese producer, will in the view of the Company continue to provide support for its asset value as well as providing ongoing cash flow.

Red Rock will however prepare itself for a less benign environment by ensuring that it can turn off a significant proportion of its costs at short notice.

In the six-month period ending 31 December 2019 the profit before tax from continuing operations was £337,000 compared with a loss of £283,000 in the comparable period of the previous year. Net finance income was at similar levels to that in the comparable period of the previous financial year, at £524,000, but this was not offset as in the previous period by impairments and project development costs. Diluted earnings per share were 0.047p for the half year.

Total comprehensive loss for the period was £227,000 compared with a total comprehensive loss of £2,085,000 for the previous year, the loss arising as a result of revaluation of available for sale investments.

Payroll and other administrative expenses were held almost unchanged from the previous year's period.

In the Annual Report in December 2019 it was noted that the directors had, despite passing two key milestones, taken the conservative decision to delay writing back any part of the £5,280,000 impairment which had been taken in relation to the Kenyan assets in the 30 June 2015 accounts, while awaiting resolution of the then pending court case. Although further progress towards a conclusion has been made in the first quarter of 2020, the directors have once again deferred any write back of previous impairments, feeling that to do this at a moment when COVID-19 has created such global uncertainty might be inappropriate.

The Company's value continues to be underwritten by its 17.02m share holding in Jupiter Mines Ltd (ASX:JMS). On 24 March 2020 Jupiter announced the results for the fourth quarter to 29 February 2020. Tshipi had fulfilled its targets for the 2020 financial year, exporting 3.4 million tons of Manganese ore, and had announced a ZAR265m dividend. Jupiter held cash of AUD84m at the end of the quarter, and had begun a feasibility study into mine expansion. Red Rock notes that the manganese price for 37% Mn FOB Port Elizabeth has increased from $2.70 per DMTU in late 2019 to $3.34 per DMTU. This must reflect a degree of restocking as China, post the Chinese New Year and post the high point of the coronavirus epidemic, starts to resume large scale industrial activity and steel production.

The Company thanks shareholders for their resilience and support at this extraordinary time, and wishes them good health and a safe passage through the current turmoil. It will in the coming days keep shareholders informed of any significant developments it sees occurring, either in the markets or in its own affairs.

Andrew Bell

Chairman

31 March 2020

Notes

31 December 2019

31 December 2018

30 June 2019

Unaudited,

 £'000

Unaudited,

£'000

Audited,

 £'000

ASSETS

Non-current assets

Investments in associates and joint ventures

1,584

1,490

1,584

Financial instruments

8

3,103

3,127

4,210

Exploration assets

278

62

235

Non-current receivables

5,473

5,150

5,234

Total non-current assets

10,438

9,829

11,263

Current assets

Cash and cash equivalents

139

27

64

Financial assets - investment in derivatives

56

60

60

Loans and other receivables

795

2,438

975

Total current assets

990

2,525

1,099

TOTAL ASSETS

11,428

12,354

12,362

EQUITY AND LIABILITIES

Equity attributable to owners of the parent

Called up share capital

9

2,781

2,774

2,781

Share premium account

26,853

26,499

26,853

Other reserves

1,623

1,591

2,563

Retained earnings

(22,169)

(21,223)

(22,668)

Total equity attributable to owners of the parent

9,088

9,641

9,529

Non-controlling interest

(22)

(20)

(21)

Total equity

9,066

9,621

9,508

LIABILITIES

Current liabilities

Trade and other payables

1,283

1,681

1,733

Short term borrowings

10

1,079

1,052

1,121

Total current liabilities

2,362

2,733

2,854

TOTAL EQUITY AND LIABILITIES

11,428

12,354

12,362

Notes

6 months to 31 December 2019

6 months to 31 December 2018

Unaudited, £'000

Unaudited,

£'000

Administrative expenses

4

(282)

(269)

Project development costs

5

-

(303)

Other project expenses

5

(126)

(95)

Exploration expenses

(6)

(3)

Other income

246

-

Impairment of loans and receivables

-

(257)

Share of losses of associates and joint ventures

-

-

Foreign exchange gain/(loss)

(19)

106

Finance income/(expenses), net

6

524

538

Profit/(loss) for the period

337

(283)

Tax credit

-

-

Profit/(loss) for the period

7

337

(283)

Profit/(loss) for the period attributable to:

Equity holders of the parent

338

(282)

Non-controlling interest

(1)

(1)

337

(283)

Profit/(loss) per share

Profit/(loss) per share - basic, pence

3

0.050

(0.053)

Profit/(loss) per share - diluted, pence

3

0.047

(0.053)

6 months to 31 December 2019

6 months to 31 December 2018

Unaudited, £'000

Unaudited, £'000

Profit/(loss) for the period

337

(283)

Revaluation of FVTOCI investments

(713)

(1,825)

(Loss) on sale of FVTOCI investments taken directly to reserves

161

-

Unrealised foreign currency gain arising upon retranslation of foreign operations

(12)

23

Total comprehensive (loss)/profit for the period

(227)

(2,085)

Total comprehensive (loss)/income for the period attributable to:

Equity holders of the parent

(226)

(2,084)

Non-controlling interest

(1)

(1)

(227)

(2,085)

Share capital

Share premium account

Retained earnings

Other reserves

Total attributable to owners of the Parent

Non- controlling interest

Total equity

Unaudited

£'000

£'000

£'000

£'000

£'000

£'000

£'000

As at 30 June 2019 (audited)

2,781

26,853

(22,668)

2,563

9,529

(21)

9,508

Changes in equity for the six-month period ending 31 December 2019

Profit for the period

-

-

338

-

338

(1)

337

Other comprehensive income for the period

-

-

161

(940)

(779)

-

(779)

Total comprehensive income/(loss) for the period

-

-

499

(940)

(441)

(1)

(442)

As at 31 December 2019 (unaudited)

2,781

26,853

(22,169)

1,623

9,088

(22)

9,066

As at 30 June 2018 (audited)

2,767

26,016

(20,941)

3,392

11,234

(19)

11,215

Changes in equity for the six-month period ending 31 December 2018

Loss for the period

-

-

(282)

-

(282)

(1)

(283)

Other comprehensive income for the period

-

-

-

(1,801)

(1,801)

-

(1,801)

Total comprehensive income/(loss) for the period

-

-

(282)

(1,801)

(2,083)

(1)

(2,084)

Transactions with owners

Issue of shares

7

483

-

-

490

-

490

Total Transactions with owners

7

483

-

-

490

-

490

As at 31 December 2018 (unaudited)

2,774

26,499

(21,223)

1,591

9,641

(20)

9,621

FVTOCI financial assets reserve

Foreign currency translation reserve

Share-based payment reserve

Total other reserves

Unaudited

£'000

£'000

£'000

£'000

As at 30 June 2019 (audited)

2,256

143

164

2,563

Changes in equity for six months ended 31 December 2018

Decrease in FVTOCI reserve in relation to disposals

(215)

-

-

(215)

Change in reserves related to FVTOCI investments revaluations

(713)

-

-

(713)

Unrealised foreign currency loss on translation of foreign operations

-

(12)

-

(12)

Total comprehensive income for the period

(928)

(12)

-

(940)

As at 31 December 2019 (unaudited)

1,328

131

164

1,623

As at 30 June 2018 (audited)

3,108

120

164

3,392

Changes in equity for six months ended 31 December 2018

Change in reserves related to FVTOCI investments revaluations

(1,825)

-

-

(1,825)

Unrealised foreign currency loss on translation of foreign operations

-

24

-

24

Total comprehensive income for the period

(1,825)

24

-

(1,801)

As at 31 December 2018 (unaudited)

1,283

144

164

1,591

6 months to 31 December 2019

6 months to 31 December 2018

Unaudited, £'000

Unaudited, £'000

Cash flows from operating activities

Profit/(loss) before tax

337

(283)

(Increase)/decrease in receivables

(19)

(232)

(Decrease)/increase in payables

(8)

118

Share of losses in associates and joint ventures

-

-

Finance income, net

(524)

(538)

Currency adjustments

19

(106)

Other income

(246)

-

Impairment of loans and receivables

-

257

Net cash inflow/(outflow) from operations

(441)

(784)

Cash flows from investing activities

Dividends received

357

499

Loans granted during the period

-

(1,550)

Proceeds from sale of investments

306

-

Payments for capitalised exploration costs

(43)

(61)

Payments to acquire FVTOCI investments

-

(247)

Net cash (outflow)/inflow from investing activities

620

(1,359)

Cash flows from financing activities

Proceeds from issue of shares

-

-

Interest paid

(26)

(84)

Proceeds from new borrowings

-

325

Repayments of borrowings

(83)

(290)

Net cash (outflow)/inflow from financing activities

(109)

(49)

Net (decrease)/increase in cash and cash equivalents

70

(2,192)

Cash and cash equivalents at the beginning of period

64

2,266

Exchange losses on cash and cash equivalents

5

(47)

Cash and cash equivalents at end of period

139

27

1

Company and group

As at 31 December 2019, 30 June 2019 and 31 December 2018 the Company had one or more operating subsidiaries and has therefore prepared full and interim consolidated financial statements respectively.

The Company will report again for the year ending 30 June 2020.

The financial information contained in this half yearly report does not constitute statutory accounts as defined in section 435 of the Companies Act 2006. The financial information for the year ended 30 June 2019 has been extracted from the statutory accounts for the Group for that year. Statutory accounts for the year ended 30 June 2019, upon which the auditors gave an unqualified audit report which did not contain a statement under Section 498(2) or (3) of the Companies Act 2006, have been filed with the Registrar of Companies.

2

Accounting Polices

Basis of preparation

The consolidated interim financial information has been prepared in accordance with IAS 34 'Interim Financial Reporting.' The accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 30 June 2018, which have been prepared in accordance with IFRS.

During the period the following new standards were adopted. The adoption of these standards has not had a material impact on the financial information of the Group in future periods.

IFRS 16 is effective for periods beginning on or after 1 January 2019. The Group has elected to apply paragraph C5(b) and adopt IFRS 16 retrospectively with the cumulative effect of initially applying IFRS 16 recognised at the date of initial application (1 July 2019). Consequently, the comparative period has not been restated. Under IFRS 16 lessees may elect not to recognise assets and liabilities for leases with a lease term of 12 months or less. The Company's offices premises are currently under a rolling monthly lease and are short-term leases, so the Company took IFRS 16 scope exemption and chose to recognise the lease payments in profit or loss on a straight-line basis over the lease term.

IFRIC 23 is effective for periods beginning on or after 1 January 2019. The Group elected to adopt IFRIC 23 retrospectively with the cumulative effect of initially applying the Interpretation recognised at the date of initial application (1 July 2019). Consequently, the comparative period has not been restated.

3

Earnings per share

The following reflects the loss and number of shares data used in the basic and diluted loss per share computations:

6 months to

 31 December 2019

6 months to

 31 December 2018

Unaudited

Unaudited

£'000

£'000

Profit/(loss) attributable to equity holders of the parent company, Thousand pounds Sterling

338

(282)

Adjusted for interest accrued on convertible loan notes, Thousand pounds Sterling

34

-

Adjusted profit/(loss) attributable to equity holders of the parent company, Thousand pounds Sterling

372

(282)

Weighted average number of Ordinary shares of £0.0001 in issue, used for basic EPS

676,049,662

535,699,971

Effect of all dilutive potential ordinary shares from potential ordinary shares that would have to be issued, if all loan notes convertible at the discretion of the noteholder converted at the beginning of the period

115,980,823

-

Weighted average number of Ordinary shares of £0.0001 in issue, including potential ordinary shares, used for diluted EPS

792,030,485

535,699,971

Profit/(loss) per share - basic, pence

0.050

(0.053)

Profit/(loss) per share - diluted, pence

0.047

(0.053)

Half-yearly report notes

for the period ended 31 December 2019, continued

At 31 December 2019 and 31 December 2018, the effect of the following the instruments is anti-dilutive, therefore they were not included into the diluted earnings per share calculation.

6 months to

 31 December 2019

6 months to

 31 December 2018

Unaudited

£'000

Unaudited

£'000

Share options granted to employees - not vested and/or out of the money

48,320,000

41,660,000

Number of warrants given to shareholders as a part of placing equity instruments - out of the money

101,740,195

118,489,582

Total number of contingently issuable shares that could potentially dilute basic earnings per share in future

150,060,195

160,149,582

Number of warrants - vested and in the money at year end but not included into diluted EPS calculation due to their effect being anti-dilutive

-

-

Number of potential ordinary shares that would have to be issued if all loan notes convertible at the discretion of the noteholder converted

-

131,538,908

Number of share options granted to employees - vested and in the money at year end but not included into diluted EPS calculation due to their effect being anti-dilutive

-

6,660,000

Total number of contingently issuable shares that could potentially dilute basic earnings per share in future and anti-dilutive potential ordinary shares that were not included into the fully diluted EPS calculation

150,060,195

298,348,490

There were no ordinary share transactions after 31 December 2019, that that could have changed the EPS calculations significantly if those transactions had occurred before the end of the reporting period.

4

Administrative expenses

5

Project development and Other project expenses

Project development expenses include costs incurred during the assessment and due diligence phases of a project, when material uncertainties exist regarding whether the project meets the Company's investment and development criteria and whether as a result the project will be advanced further. Other Project Expenses include costs associated with current and previous projects and include remediation and administration expenses.

Half-yearly report notes

for the period ended 31 December 2019, continued

6

Finance income/(expenses), net

7

Segmental analysis

Jupiter Mines

Limited

Kenyan exploration

DRC

exploration

Corporate and unallocated

Total

For the six-month period to 31 December 2019

£'000

£'000

£'000

£'000

£'000

Revenue

Total segment external revenue

-

-

-

-

-

Result

Segment results

357

(34)

-

(153)

170

Loss before tax and finance costs

Interest income

238

Interest expense

(71)

Loss before tax

337

Tax

-

Loss for the period

337

Jupiter Mines

Limited

Kenyan exploration

DRC

exploration

Corporate and unallocated

Total

For the six-month period to 31 December 2018

£'000

£'000

£'000

£'000

£'000

Revenue

Total segment external revenue

-

-

-

-

-

Result

Segment results

499

(17)

(306)

(497)

(321)

Loss before tax and finance costs

(321)

Interest income

131

Interest expense

(92)

Loss before tax

(283)

Tax

-

Loss for the period

(283)

A measure of total assets and liabilities for each segment is not readily available and so this information has not been presented.

8

Financial instruments - Fair value through other comprehensive income

31 December 2019

Unaudited

£'000

31 December

2018

Unaudited

£'000

30 June

2019

Audited

£'000

At the beginning of the period

4,210

4,705

4,705

Additions

146

247

392

Disposals

(540)

-

(25)

Change in fair value

(713)

(1,825)

(862)

At the end of the period

3,103

3,127

4,210

9

Share Capital of the company

Number

Nominal, £'000

Deferred shares of £0.0009 each

2,371,116,172

2,134

A deferred shares of £0.000096 each

6,033,861,125

579

Ordinary shares of £0.0001 each

676,049,662

68

As at 30 June 2019 and at 31 December 2019

2,781

10

Short-term borrowings

31 December 2019

Unaudited

£'000

31 December

2018

Unaudited

£'000

30 June

2019

Audited

£'000

Loan from institutional investors

46

-

122

Convertible loan notes

1,033

1,052

999

At the end of the period

1,079

1,052

1,121

11

Capital Management

Management controls the capital of the Group in order to control risks, provide the shareholders with adequate returns and ensure that the Group can fund its operations and continue as a going concern.

The Group's debt and capital includes ordinary share capital and financial liabilities, supported by financial assets.

There are no externally imposed capital requirements.

Management effectively manages the Group's capital by assessing the Group's financial risks and adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of debt levels, distributions to shareholders and share issues.

There have been no changes in the strategy adopted by management to control the capital of the Group since the prior period.

12

Subsequent events