Metal Tiger increases shareholding in Red Rock Resources

Mineral project investor Metal Tiger has increased its shareholding in gold and iron ore explorer Red Rock Resources in a bid to capitalise on the recovering resource sector.

Metal Tiger agreed to pay £100,000 to subscribe for 25m of the total 75m new ordinary shares issued by AIM peer Red Rock at 0.4p per new ordinary share, with each share carrying an additional warrant at 0.8p and with a 24-month longevity from admission of Red Rock’s placing shares on 30 August.

Metal Tiger, which will nominate a non-executive director to the board of Red Rock, previously invested in Red Rock in April and has now increased its stake in the company to 16.81% from 13.65% and will also hold about 29.7m warrants exercisable at 0.84p and 25m warrants exercisable at 0.8p.

In the year ended June 2015, Red Rock made a loss of about £8.4m and had net assets of about £7.5m.

Metal Tiger chief executive Paul Johnson, said: “We recognise the importance of stability and security that Red Rock has generated through income from oil sales, sale proceeds from Colombia and also through Red Rock’s investments notably in Jupiter Mines and Goldstone Resources.

“That said, we also recognise that in a recovering resource market environment the best returns for shareholders can often lie in the reigniting of investment in hard rock mineral deposit opportunities, notably within precious and strategic metals. We are pleased that the Red Rock management team shares our thoughts in this regard and will seek to drive the strategic direction of the company to open up to the development of hard rock opportunities.

“Red Rock has demonstrated an ability to deliver substantial returns from low sector sentiment conditions and we believe is worthy of further investment in readiness for the next recovery phase.”

Shares in Metal Tiger were down 4.31% to 3.85p at 1224 BST and shares in Red Rock Resources were up 3.53% to 0.440p at 1058 BST.