Red Rock Resources Regulatory News (RRR)

Red Rock Resources PLC

("Red Rock" or the "Company")

Update on Steelmin Limited Investment

Financing Completed

03 July 2017

Red Rock Resources Plc, the natural resource development company with interests in gold, manganese and oil production, announces, further to the announcement on 23rd June 2017, that it has closed the second tranche of the transactions under which it will fund Steelmin Limited ("Steelmin") to complete the refurbishment and recommissioning of a ferrosilicon smelter in Jajce, Bosnia, and acquire an interest in Steelmin.

Highlights:

o Red Rock was issued on 23 June 2017 an 8 month secured loan note for €3,848,000 (as restated to account for final administrative calculations) by Steelmin ("Loan"), bearing interest at 13% p.a. and extendable for a further 8 months for a fee

o First tranche of the Loan amounting to €2,737,712.96 was paid to Steelmin last week and second tranche amounting to €956,687 has now been paid

o To fund the Loan, Red Rock borrowed $4,230,750 (now adjusted to $4,400,000) on a secured basis for a term of one year bearing interest at 13% p.a. with a renewal option for a further 8 months for a fee (the "Note")

o First tranche of the Note, amounting to $3,069,250 net, was received by Red Rock last week, and balance of $1,143,230 has now been received as a second tranche

Andrew Bell, Chairman of Red Rock comments: "Since the first tranche payment was made last week, Steelmin has made progress in ordering long lead time items in order to meet its targeted date of production. We will continue to monitor and report on progress as we move towards production."

Steelmin - Background

The Steelmin plant and facility is located in central Bosnia, 104 kilometres north west of Sarajevo. The complex, formerly part of Electrobosna, was originally built in the 1970s by Elkem, a major silicon and alloy producer based in Norway, and was one of the largest and best known producers of ferrosilicon and silicon metal in Europe. It was closed down in 1992 due to the Bosnian War, was then privatised and the six furnaces were sold off in two separate parts in 2000. The plant was brought back online for several years but Chinese dumping and ownership disputes led to its closure in 2004.

Anti-dumping regulations have since been implemented by the European Commission; which significantly reduced both Chinese and Russian exports into Europe, allowing prices to stabilize and rise over time. The second, smaller, facility split off from the original is now being operated by the Italian ferro-alloy producer Metalleghe, and has been successfully producing next to Steelmin's plant for the past 12 years.

Steelmin has refurbished and is preparing to restart Furnace V which has a 48MVA installed power Elkem furnace, and is connected to two chimneys on the roof of the production hall. Furnace IV has a 30 MVA Tagliaferri furnace with three chimneys, and will be reopened later.

In addition to the two furnaces, the facility in Jajce houses a filtration plant, warehouse storage for raw materials, pouring and dispatch hall as well as a plant for process water recirculation.

Steelmin currently has a team of 45 people on-site led by engineers who were involved with the original plant from commissioning. Steelmin stands to benefit from experienced local labour with 20+ years of experience, at a fraction of typical cost of these skills in Europe. With proximity and abundant access to raw materials including quartz deposits, Steelmin has secured contracts for most of the materials required for production, as well as letter of intent, from major steel producers within Europe.

Refurbishment of the second furnace is expected to begin later in 2018. The European Bank for Reconstruction and Development (EBRD) has expressed interest to partner with Steelmin once in production, through the provision of debt for the refurbishment of the second furnace.

Power remains the most significant input cost to ferrosilicon production and this is provided by abundant and economical hydro-power available across the region. Furnace feedstock such as quartz is also sourced from the region. The filtration plant refurbishment has been completed and ensures that all outputs of gases will comply with EU regulations.

Steelmin intends to produce ferrosilicon containing 75% silicon and 25% iron, a product primarily used as a deoxidising agent and to add electrical conductivity and corrosion resistance to steel. A by-product of ferrosilicon production will be microsilica, which is a dust used in the manufacture of speciality concretes in the construction industry as well as in advanced refractories and ceramics. Furnace V is expected to produce 29,000t of ferrosilicon per annum as well as 5,800t of microsilica.

Over time Steelmin is expected to produce both ferrosilicon as well as additional silicon alloys that offer higher margins and additional upside. Currently ferrosilicon trades between €1280-1350 a ton and the estimated price of microsilica is €200 a ton.

European ferrosilicon production depends critically on access to cheap power (locally generated hydroelectric power in the case of Jajce) since this is up to half the cost of production. Prices are historically driven by steel production levels, the level of Chinese pricing and production allowed into Europe, as well as the associated export and anti-dumping tariffs. Since late 2016 overall Chinese export prices have begun to rise, positively impacting European produce prices. Key input costs such as metallurgical coal are also closely correlated to realized ferrosilicon prices.

EU supplies of ferrosilicon are generally heavily constrained, with 70% coming from Norway and Iceland and few if any new producers coming online. Given Bosnia's ideal location closer to key steel customers in Germany, Austria and Northern Italy, Steelmin is well poised to service these major markets.

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

Glossary

Ferrosilicon: ferrosilicon produced at Steelmin contains 75% silicon, and is primarily used as a deoxidising agent in steel production, adding electrical conductivity and corrosion-resistance properties to steel

Microsilica: a by-product of silicon and ferrosilicon production, used in the construction industry for its added strength and abrasion resistance