Red Rock 'working patiently' on JV with Cobalt Blue

The AIM-traded firm said it and Cobalt Blue were continuing to work together on due diligence, were making good progress with local documentation and background research, and expected to have a further announcement in due course.

Red Rock also announced a revision to its agreement with Kansai Mining Corporation, initially entered into in June 2015, was executed on 11 June.

The effect of the revision was that Kansai exchanged its 25% carried interest in the mineral assets of Mid Migori Mining under the 2015 agreement for a $50,000 payment, leaving Red Rock with a 100% interest.

In the event of a renewal or reissue of licenses covering the assets, the company would within three months make further payments, subject to such renewal or reissue not being on “unduly onerous” terms.

Such further payments would consist of $2.5m payable in cash, a $1m promissory note payable 15 months after issue, and £0.5m of warrants into Red Rock shares at a price 20% above their average closing price on the three trading days prior to issue.

Red Rock noted that itself and Mid Migori Mining instigated proceedings in May 2015 for a judicial review in relation to a ministerial decision, which purported to deprive them of the assets.

It said on Friday that those proceedings were not concluded.

“Our local counterparties in Congo have had to spend much time resolving a dispute involving major companies operating in the country, which has understandably affected their ability to follow up with us expeditiously,” said Red Rock chairman Andrew Bell.

“With Cobalt Blue we have continued to work patiently on behalf of the joint venture, and remain confident of progress.

“The solution arrived at in relation to Mid Migori Mining gives us the flexibility of action that will maximise the chance of our being able to obtain license renewal and then to progress the project.”