Red Rock Resources plc
("Red Rock" or the "Company")
5 September 2016
Further to the announcement of 16 August 2016, Red Rock announces an update in relation to payments from the Company's Shoats Creek Field in Beauregard Parish, Louisiana and in relation to the sale of the Company's interest in the El Limon gold mine, Colombia.
· US$6,135.39 now paid to Red Rock from first gold royalty payment from Colombia Milling Ltd ("CML"), covering 2 months to 30 June 2016
· US$225,000 from CML now received as instalment payment for 2015 sale of Colombian assets
· In relation to the US$1,000,000 Promissory Note from CML held by Red Rock, where Red Rock has served notice of its intention to convert, the parties have met and negotiations continue in order to seek a resolution prior to arbitration
Red Rock Chairman Andrew Bell comments: "We have in the last month received initial payments of both oil production revenue share at Shoats Creek and gold royalties from CML. These are significant milestones for us. To these income flows, which we expect to increase significantly once full operation is achieved, we anticipate in due course the addition of a third income stream from dividends on our interest in manganese producer Jupiter Mines Ltd.
As stated before, we consider that under the terms of the agreements with CML, conversion to listed shares of the US$1,000,000 CML Note due 2018 was triggered earlier this year, and we served notice of this. CML has challenged Red Rock's right to convert but following a meeting of the parties on 30th August has indicated to us that it expects to make an offer of early repayment of the Note. Depending on the terms on offer, Red Rock may not, therefore, need to initiate the arbitration process.
Red Rock continues action to protect its rights in Kenya."
In May 2015 Red Rock completed the sale of its Colombian assets to CML for a consideration comprising US$1,000,000, payable in three instalments, a further US$1,000,000 in the form of a Promissory Note due 2018 (but convertible into listed stock in the event that CML or a related entity owning the El Limon mine obtained a public listing), and US$3,000,000 in royalties (the first US$2,000,000 of which is payable quarterly at 3%). The payment made in August 2016 was the final instalment payment. The royalty payment made in May 2016 was the first royalty payment, and covers a two month period to the end of the June quarter (rather than being calculated for the three months to the end of July 2016 and paid in September as Red Rock had expected). Future royalty payments will cover calendar quarters, with the next payment due by 30 November 2016.
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
This information is provided by RNS