Red Rock Resources Regulatory News (RRR)

Red Rock Resources PLC

("Red Rock" or the "Company")

Update on Steelmin Limited

Agreement Signed to Take Out Red Rock Loan

18 January 2018

Red Rock Resources Plc, the natural resource development company with interests in gold and steel feed materials, announces further to the announcements of 23rd June and 3rd July 2017, that Steelmin Limited ("Steelmin"), a company Red Rock financed so that it could complete the refurbishment and recommissioning of a ferrosilicon smelter in Jajce, Bosnia, has signed a Structuring and Placing Agreement ("Agreement") with a Luxembourg investment vehicle under which Steelmin intends to repay in full the amounts outstanding to Red Rock ("Loan").

Key points:

o The Agreement provides for a new Steelmin note ("Note") to be placed with investing funds on a best efforts basis with a target issuance date of end January 2018.

o The Note proceeds would be used primarily for repayment in full of the Red Rock Loan, with some used for plant completion.

o Following Loan repayment Red Rock would be left with a diluted 21% of the share capital of Steelmin, which would increase to 22% on 1 February 2018 should the Loan not be repaid by that time.

o Red Rock will in any case retain its existing board seat and observer seat on the Steelmin board.

o Steelmin forecasts first production following completion of the refurbishment of the ferrosilicon smelter complex in Jajce, Bosnia in March 2018.

o Steelmin's plant will initially consist of the refurbished Furnace V of 29,000t of ferrosilicon p.a. and 5,800t of microsilica, and after a planned (but not yet funded) refurbishment of a second furnace will have a combined annual capacity of 48,720 tonnes ferrosilicon (FeSi 75) and 9,700 tonnes of microsilica.

o The Loan, issued as part of the back to back arrangements in June 2017 by which Red Rock provided financing to Steelmin, consists of an 8 month secured loan note for €3,848,500 plus fees of 7.5% of principal and accrued interest at 13% p.a., and was to be extendable for a further 8 months from 21 February 2018 for an additional fee.

o To fund the Loan, Red Rock borrowed in June 2017 from a group of institutional investors a partially renewable facility of $4,230,750 on a secured basis for a term of one year bearing interest at 13% p.a. (the "Note"), of which approximately $2,865,004 including fees and accrued interest remains outstanding.

Andrew Bell, Chairman of Red Rock comments: "We are delighted to see that Steelmin appears to be on track both to repay its facility from us before the due date and to begin ferrosilicon production within the Q1 2018 schedule.

On the basis that the Agreement, which is subject to some rights of withdrawal by the lender, completes, and on the basis of current exchange rates, we would be left with a net positive balance of some £1.8m on the back to back facility after repayment of all amounts due to and from Red Rock. We would also have a 21-22% shareholding in Steelmin. Seven months after the initial investment by us in Steelmin, this would be a positive outcome.

As ferrosilicon prices are strengthening, it is important that Steelmin start production soon, and we hope before long to see planning for the refurbishment of the second furnace."

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 until finally being shuttered again in 2004 due to increasing exports pressure from Chinese producers.

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 - Assets

Steelmin controls furnaces IV and V from the original Electrobosna complex. Furnace V has a 48MVA installed power Elkem furnace, and is connected to two chimneys on the roof of the production hall. Furnace IV, the smaller of the two, has a 30 MVA Tagliaferri furnace with three chimneys, preventing the emission of gases in ambient air to comply with EU regulatory requirements. Given its larger total capacity Steelmin decided to bring furnace V on initially and then move to recommission furnace IV later in 2018.

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.

Refurbishment for the second furnace is expected to begin later in 2018.

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 Products and Markets

Steelmin intends initially 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 at over €1500 a ton compared with between €1280-1350 a ton at the time of Red Rock's investment in June 2017.

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.

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 0207 374 2212 Broker First Equity Limited

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

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