Last checked at 11 May 2016 07:00
Red Rock Resources plc
("Red Rock" or the "Company")
Update - Colombia
11 May 2016
Update on Colombia
Further to the announcement on 5 May 2016 of the re-start of production at El Limon after a US$ 2.5m refurbishment, Para Resources Limited (TSXV:PBR)("Para") has issued a further release headed "Para Resources Announces Letter of Intent to Purchase 17,000 Ha of Mineral Rights Surrounding El Limon Mine".
Highlights
· Para LOI to acquire 17,000 ha of concessions in Segovia Gold Belt, NE Colombia, from Otu Gold, Ltd. at cost of US$1,000,000.
· Three small operating mines included.
· Additional sources of feed material to El Limon plant.
· Rapid payback expected.
· Mineral rights provide El Limon with sufficient feed to exceed 200 TPD mill capacity.
· Full statement available on Para's website. Para announcement.
Red Rock Interest
· US$225,000 instalment due to Red Rock in July in respect of 2015 El Limon sale.
· Royalty income stream to Red Rock of 3% on plant output began 1 May 2016, to be calculated quarterly.
· Red Rock holds US$1,000,000 promissory note with conversion right.
Background
Para is listed on the TSX Venture Exchange, and at the closing price on 9 May 2016 had a market capitalisation of CAN $19.0m. On 13 January 2016 Para announced a letter of intent to acquire Colombia Milling Ltd, the acquiror of Red Rock's Colombian interests, and this acquisition has subsequently been completed. Para has recently stated that once steady state production has been achieved, it expects to produce over 20,000 oz of gold per year through the processing plant with a projected all-in sustaining cost of cUS$600 per ounce.
Red Rock Chairman Andrew Bell states: "Para's last announcement already allowed us to project, once steady state production is reached, and at current gold prices, approximately US$300,000 of annualised royalty income from that part of the planned plant output derived from the El Limon mine itself. With greater visibility now as to the source of the other half of the material Para plans to process to reach its projected steady state production of 20,000 oz p.a., we expect to revise those projections upwards over time.
The improving news flow from Colombia shows that we selected the right buyer for our Colombian assets last year.
Reduction of costs, and the development of cash flows from each of our key business areas has been our consistent focus. It has taken more than two and a half years of effort to get to this point, where the effort is beginning to pay off. Oil revenues at Shoats Creek and gold royalty flows are going to transform significantly our business, with other revenue streams playing their part."
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