Red Rock Resources: Half Year Results

Red Rock Resources has released its eagerly anticipated interim statement and accounts for the period ending 31st December 2009 (click here to view).

We expected them to be good, so what were we looking for? Specifically, enhanced valuations in the investment portfolio and a positive forward-looking statement from the Chairman – Andrew Bell did not disappoint on either count! In fact he even produced a nice cherry for the cake, with the expectation of a maiden dividend, subject to all going to plan between now and the Company's year end, in June 2010.

Shareholders will know that Red Rock Resources is growing its business by developing raw ground into potentially valuable exploration assets, generally farmed out into new listed vehicles in which the company then retains a material stake. These holdings are in quoted companies and therefore have a readily quantifiable market value.

As value investors, we will always keep a keen eye on the value of such holdings and at this stage in the game, that is what’s driving value.

But as impressive as the accounts were, they only reflect valuations on investments at the half year stage, as of 31st December 2009. Yes, that’s just three months ago, but at the pace this business is growing, three months might as well be three years. So what about those (rather significant) events that occurred after the balance sheet date?

In his statement Andrew Bell makes reference to post balance sheet events and the marked improvement in valuations. So we decided to take a closer look at the status of “available for sale financial asset’s” at the start and end of the period, and then lined them up against the current state of play. Here’s how it looks:

 

 

Red Rock’s main tradable holding consists of some 93 million shares in Jupiter Mines (ASX:JMS).

With its recently announced transformational deal to acquire 49.9% of the Tshipi Kalahari Manganese project, Jupiter has impressed the markets. As noted, in the interim report, the share price has risen from 19.5 cents at the end of December 2009 to 28.5 cents as of today – a rise of some 46%, worth an additional £5.1 million on Red Rock’s Net Assets Value

Can this rate of growth continue? The company would not rule out further rises, as Jupiter bulks up to become a major player in the steel feed business. Quoting from the Chairman’s statement:

“We support the transaction, which has the potential to make Jupiter one of the world's dominant manganese producers and though it is the first substantial transaction by Jupiter, we believe and hope that it will not be the last."

So back to valuations and although we can’t be absolutely precise here, (as we don’t have access to the detailed balance sheet analysis), at today’s quoted prices we can extrapolate an approximate value for ‘available for sale financial assets’ totalling some £17.4 million, worth around 3p per Red Rock share. So the value of the tradeable assets underpin the current share price and then some.

Any uplift in the Jupiter share price would feed through to Red Rock’s NAV at the rate of AU$930k per point, Resource Star at a more modest AU$136k and Cue Resources at CA$98.9k.

So as value investors we are really quite comfortable with the investment case as it stands, and lets not forget that at current prices, you also get a stake in the 1.2m ounce gold resource at Migori for free!

This summary represents the views and opinions of Miningmaven, has been prepared for information and educational purposes only and should not be considered as investment advice or a recommendation. All opinions expressed in this weblog are those of the author and should not be construed as being made on behalf of any featured Company.

Readers are advised to do their own extensive research before buying shares which, as with all small cap exploration stocks, should be viewed as high risk. Investors should also seek the advice of their investment adviser or stockbroker, as they deem appropriate.

All rights reserved. Users may print extracts of content from this blog for their own personal and non-commercial use only. Republication or redistribution of Miningmaven content, is expressly prohibited without the prior written consent of miningmaven. However, linking directly to the Miningmaven blog is permitted and encouraged.

Copyright © miningmaven 2010

Ariana Resources: New Exploration Targets

This morning, Ariana announced  geophysical  test results from their Kisiltepe project in Turkey (click here to view). We took the opportunity to put a few quick questions to MD Kerim Sener. Here's what he had to say: 

MM: Can you expand a little on the significance of today's news?

KS:This news represents an expansion of our geoscientific knowledge at the Kiziltepe prospect. In particular it has confirmed that there is potential for the discovery of new vein systems in a region of the prospect that was hitherto underexplored. This particular area had no veins outcropping but hosted a region of extensive quartz float, that could not be explained by surface erosion and transport. There was no other indication in this area for buried vein systems, partly due to extensive ignimbrite cover in the northwest and thin alluvial cover in the southeast, concealing any existing veins. The only way to test the geophysical results is by drilling, which is starting with immediate effect.

MM:What do these results contribute to your understanding of the resource and what do they mean in the context of the proposed JV.

KS:The results have confirmed that the Kiziltepe prospect potentially comprises a much more extensive vein network than considered at the time of its acquisition. Obviously drilling must be completed before we know the extent of any potential resource increase through the identification of new vein systems. With regards the JV it was important to complete this geophysical survey before the feasibility-level planning for the siting of mine infrastructure such as the processing plant, tailings dam and waste rock dump. We certainly wouldn't want to site the plant over a potential buried vein!

MM.Have the results added to the potential scale of the exploration area?

KS:Absolutely, we have to wait on our drilling results but the potential is now there for the further exploration of other anomalous zones in the region in addition to those visible in outcrop.

MM:What does this drill programme entail and what is the broad timetable for completion?

KS:We intend to drill a fenceline of short holes in the area of coincident anomalous rock chip geochemistry (up to 21.1 g/t Au) and high resistivity. This fenceline is designed to identify in-situ quartz veins and/or their related alteration, to confirm the presence of a vein system at depth. At a later stage, and assuming the results of this first phase are positive, we would need to follow up with deeper exploratory holes. Another area which will be drill tested now is the point at which the Arzu and Derya structures disappear through ignimbrite cover rocks. This area shows coincident resistivity and intermittent chargeability anomalies in geophysics and other geological evidence suggests the presence of a buried vein system.

MM.How does this additional information add to your confidence in the viability for Kiziltepe to be a source for production, going forward?

KS:Within the margins of error acceptable in a scoping study we are already confident in the viability of the resource. The scoping study was undertaken independently of Ariana by a reputable international firm with prior experience in mining projects in Turkey and it yielded positive results. The new geophysics adds an element of further belief that the Kiziltepe resource will only continue to grow with further drill testing.

To subscribe to Ariana Resources company updates, click here

To view the latest 2010 presentation from Ariana , click here

To view Kerim Sener's Mining Journal feature on mining in Turkey, click here

Previous Miningmaven articles on Ariana Resources

27th February A Piece of Turkey in the heart of Mayfair!

3 January 2010 Ariana Resources: Buy me a Gold Mine in Turkey!

30 January 2010 Ariana Resources: Going for Gold in "Turnkey" Turkey

10 February 2010 Ariana Resources: Lets get this show on the road!

18 February 2010 Ariana Resources: Limbering up for the Main Event!!

This summary represents the views and opinions of Miningmaven, has been prepared for information and educational purposes only and should not be considered as investment advice or a recommendation. All opinions expressed in this weblog are those of the author and should not be construed as being made on behalf of any featured Company.
Readers are advised to do their own extensive research before buying shares which, as with all small cap exploration stocks, should be viewed as high risk. Investors should also seek the advice of their investment adviser or stockbroker, as they deem appropriate.


All rights reserved. Users may print extracts of content from this blog for their own personal and non-commercial use only. Republication or redistribution of Miningmaven content, is expressly prohibited without the prior written consent of miningmaven. However, linking directly to the Miningmaven blog is permitted and encouraged.


Copyright © miningmaven 2010

Webcast: "The Global Infrastructure Opportunity"

Thursday 25th March 4.00pm UK time

US Global Investors, the progressive investment firm headed up by acclaimed fund  manager Frank E Holmes, is holding a free to access web event on Thursday 25th March dubbed "The Global Infrastructure Opportunity".

If you are serious about investing in the resource sector, you wont want to miss this event. Research can be time consuming,  but this accesible webcast will fast track you to some of the smartest minds in the sector. We therefore urge all our readers to take advantage of this opportunity. It starts at 12.pm Eastern Time (4pm UK time), but you will need to sign up in advance (to go to the sign up page click here)

"There are 6.7 billion people living on the planet today, and the population is growing. Growth in emerging markets and the shift of population to urban centres is creating greater demand for resources, services and infrastructure.The estimated needs for infrastructure spending are staggering—trillions of dollars across the world to develop water, energy, transportation and telecommunication infrastructure.

How can you take advantage of these infrastructure investment opportunities?

U.S. Global Investors invites you to participate in this engaging free webcast discussion with members of the portfolio management team for our infrastructure fund, the Global MegaTrends Fund. Also joining the webcast will be special guests from Macquarie North America, a firm that specializes in infrastructure advisory services."

 

This summary represents the views and opinions of Miningmaven, has been prepared for information and educational purposes only and should not be considered as investment advice or a recommendation. All opinions expressed in this weblog are those of the author and should not be construed as being made on behalf of any featured Company.

Readers are advised to do their own extensive research before buying shares which, as with all small cap exploration stocks, should be viewed as high risk. Investors should also seek the advice of their investment adviser or stockbroker, as they deem appropriate.

All rights reserved. Users may print extracts of content from this blog for their own personal and non-commercial use only. Republication or redistribution of Miningmaven content, is expressly prohibited without the prior written consent of miningmaven. However, linking directly to the Miningmaven blog is permitted and encouraged.

Copyright © miningmaven 2010

Jupiter Mines: CNBC speculative buy - the cheapest way in!!

Jupiter Mines was tipped today as a speculative buy on CNBC today. Red Rock Resources holds 93 million shares in Jupiter Mines, worth AU$28m (£16.8m). Red Rock's entire market cap is currently £12.7m. As our American friends would say - do the math!

This summary represents the views and opinions of Miningmaven, has been prepared for information and educational purposes only and should not be considered as investment advice or a recommendation. All opinions expressed in this weblog are those of the author and should not be construed as being made on behalf of any featured Company.
Readers are advised to do their own extensive research before buying shares which, as with all small cap exploration stocks, should be viewed as high risk. Investors should also seek the advice of their investment adviser or stockbroker, as they deem appropriate.


All rights reserved. Users may print extracts of content from this blog for their own personal and non-commercial use only. Republication or redistribution of Miningmaven content, is expressly prohibited without the prior written consent of miningmaven. However, linking directly to the Miningmaven blog is permitted and encouraged.


Copyright © miningmaven 2009

Red Rock Resources: Migori Update

We took the opportunity to put a few quick questions to Andrew Bell regarding todays update (click here to view). Here is what he had to say.

Drilling Campaign Update:

MM.Can you give our readers a brief overview of today’s update on Migori?

AB. The update is about unfinished business from the old drilling, and some work in progress. This just says steady as she goes, and the tailings info is coming.

MM. Were the Kansai Drilling (2007) assay results in line with your expectations and what will this information contribute to your understanding of the resource?

AB.We need the re-analysis of the old work to begin incorporating this data in a go-forward plan. An experienced ex-Newmont gold geo who knows the project will be available after Easter – we can easily spend money going off at half cock but the more time on analysis, the better, and the more expert the analysts, the better. These holes and other post-2004 holes are not incorporated in the resource yet. So there is built-in upside.

MM. You have noted that the data is being reviewed and analysed with the intention of generating a revised NI43-101 compliant resource estimate. How is this going to proceed now.

AB.We need to keep tight control of this project. The original 43-101 writer has died – we want the new gold geo to assist the new person at the same firm. But we are starting talking. The key is to reassemble carefully all the backing information so we can build on what we have.

MM. Your regional prospecting seems to have identified some interesting targets. Could you elaborate on the prospective value of the new targets?

AB.There is huge potential especially in the east. We find so much old info on this and we have over 60km here so we need good people to control the follow up. We cannot charge full speed at every prospect, but we think we have isolated 2 priorities. If we can just show BIF ‘potential’ that is enough for now.

MM.Would you say the latest results add to your confidence in the case for production at Migori ?

AB.Yes. We need to get a handle on the open pittable resource and on the trade-off between more work on the existing areas and work on prospective new resource areas. We need to make sure we conduct exploration in such a way that we never ‘disappoint’ with a set of bad results. Our new geo joining us who has written on the area before is quite confident.

To view Migori simplified geology map click  here

To see latest Value Proposition click here

Go to Videos to see the recent interview with Andrew Bell

This summary represents the views and opinions of Miningmaven, has been prepared for information and educational purposes only and should not be considered as investment advice or a recommendation. All opinions expressed in this blog are those of the author and should not be construed as being made on behalf of any featured Company.

Readers are advised to do their own extensive research before buying shares which, as with all small cap exploration stocks, should be viewed as high risk. Investors should also seek the advice of their investment adviser or stockbroker, as they deem appropriate.

All rights reserved. Users may print extracts of content from this blog for their own personal and non-commercial use only. Republication or redistribution of Miningmaven content, is expressly prohibited without the prior written consent of miningmaven. However, linking directly to the Miningmaven blog is permitted and encouraged.

The Author holds shares in Red Rock Resources PLC

Copyright © miningmaven 2010