Victoria Gold JV - Berringa Mine AcquisitionSource: RNS
Red Rock Resources PLC
("Red Rock" or the "Company")
Victoria Gold JV - Acquisition of Historic Berringa Mine
6 July 2022
Red Rock Resources Plc, ("Red Rock" or "the Company"), a natural resource development company with interests in gold and base metals, principally in Africa and Australia, announces an update in relation to its joint venture subsidiary New Ballarat Gold Corporation Plc ("NBGC") in the Victoria Goldfields of Australia.
Red Rock Australasia Pty Ltd ("RRAL"), the 100% owned Australian operating subsidiary of NBGC, has entered an agreement ("Agreement") to acquire the licence containing the historic Berringa Mine (EL 5535)(the "Project") from Balmaine Gold Pty Ltd ("Vendor").
· RRAL has signed an agreement to acquire EL 5535, a 9 block (288 net hectare) exploration licence south-west of Ballarat. EL 5535 covers the Berringa Gold Mine and has historical reported production of just under 300,000 oz of gold in the years 1898-1952, at an average grade of 8.3 g/t1.
· In the mid-1970s a 30 ton bulk sample from a 116m deep central shaft graded 9.8 g/t gold.1
· The main workings of the Berringa Goldfield extend for over 2.2 km of strike, 1 km west of the regional scale Berringa Fault.
· Drill targets identified from analysis of previous exploration will enable RRAL to move rapidly to drilling.
· Public record and internal reports by the Vendor Group have identified conceptual mineralisation ranges from 540,000 oz upwards which justified, but did not result in, a sustained exploration effort.1,2
· Discussions with the Vendor Group on processing options through their plant at the Ballarat Gold Mine less than 25km distant from the Project, which would significantly reduce the time and cost in developing a mine.
· Progressing the Project critically depends on obtaining licence renewal beyond the expiry date of 16 November 2022
· Initial payment upon transfer of A$20,000
· RRAL will apply for licence renewal and upon a renewal for not less than 5 years will pay a further A$130,000
· On announcement of an Inferred Mineral Resource under the JORC Code3 of at least 100,000 oz, RRAL will pay a further A$350,000
· On production RRAL will pay a 1.5% NSR royalty to the Vendor, capped at A$1,500,000
Red Rock Chairman Andrew Bell comments: "Having recently announced the grant of a licence covering the old Ajax Mine, which by the 1920s had recorded production of 312,789 ounces at 14.8 g/t, the acquisition of Berringa now means that RRAL has two of the largest historic gold producers of Victoria.
Both Mines have potential extensions that constitute substantial high grade targets, and at Berringa we can see that these have not been followed up to any significant degree by previous operators.
There is no guarantee of success, but we also have the advantage of an exploration team that has worked underground and on near-mine exploration at the nearby Ballarat mine.
These developments add significant upside to our joint venture company, providing possible near-term production options with processing potential through nearby plants."
Exploration Licence 5535 is held by Balmaine Gold Pty Ltd, which is a wholly owned subsidiary of Golden Point Group Pty Ltd ("GPG"), itself the subsidiary of Shen Yao Holdings Ltd, a company listed on the Singapore Exchange (the companies collectively being the "Vendor Group").
GPG are the owners of the nearby Ballarat Mine, where annual production guidance is 40,000 to 50,000 ounces of gold per year.4
The Vendor Group's licence has its origins in the acquisition of the tenement area in 1998 with the view of the tenement supplying additional gold to the nearby Ballarat Mine. After passing through Lihir Gold the tenement came into the hands of the Vendor Group. The mining licence was surrendered in 2014 with an exploration licence then being granted to the Vendor. For various reasons, the work on the tenement has not been as extensive as planned.
In September 2004 a Berringa Exploration Strategy Technical Report2 concluded that "The conclusion from the risk assessment approach taken by BGF [Ballarat Goldfields] is that the most likely result from a comprehensive exploration campaign at Berringa down to 1km depth will be in the order of 1Mozs. The probable range of outcomes within a 90% confidence level is calculated to be from 0.54Mozs to 1.3Mozs." A risk-weighted exploration potential of 913,488 oz was assessed.
In 2015 a Final Technical Report1 upon surrender of the then mining licence performed the same calculation for the ore shoots along the three main lines of reef but with recalculated pitch lengths (the pitch length of the shoot was defined as the length of the shoot along its intersection with the fold axial plane and was measured from the historically worked areas). This arrived at a 697,112 oz exploration potential. The same report noted that previous reporting on the Berringa Goldfield by past operators had defined an exploration potential of 1.5 to 15.6 million tonnes possibly present within the same grade range of 5.8 to 14.2 g/t gold, for a potential 0.7 to 2.9 million ounces of gold to a depth of 1,000 metres based on a plan for a systematic staged exploration, initially from surface to 300m depth along the interpreted but un-mined reef structures.
Note that these numbers are not to be considered as an estimate of a Mineral Resource or Ore Reserve as those terms are defined in the JORC Code. The potential quantity and grade is conceptual in nature, and there has been insufficient exploration to estimate a Mineral Resource, and it is uncertain whether further exploration would result in an estimate being made.
Fig 1: Berringa Mine location and workings
Under the key terms of the Agreement, the Vendor is to transfer licence EL 5535, comprising portions of 9 blocks, and all rights and obligations connected thereto, to RRAL for an initial payment of A$20,000.
A condition precedent for further payments, which may be in cash or publicly traded shares at the election of RRAL, is the successful renewal of the licence for five years from its expiry date of 16 November 2022. Upon such renewal, RRAL will pay A$130,000 to the Vendor.
RRAL will make a further payment to the Vendor of A$350,000 upon the public release of an initial Mineral Resource Estimate of not less than 100,000 ounces of gold in Inferred category as defined by the JORC Code.
RRAL will pay upon production a Net Smelter Return (NSR) Royalty of 1.5% to the Vendor up to a maximum total value of A$1,500,000.
RRAL inherits the responsibility for payment of a 2.5% NSR Royalty up to a A$50m limit to Altus Strategies Plc.
New Ballarat Gold Corporation
NBGC is a joint venture company, owned as to 50.1% by Red Rock and as to 49.9% by Power Metals Resources Plc (AIM:POW), which wholly owns Red Rock Australasia Pty Ltd , holder of the Victorian Tenements.
NBGC holds a strong land position, comprising 14 granted licences of in total 1,832 sq km in the rich gold fields of Victoria, Australia, principally around the mining centre of Ballarat.
Five licences, covering 493 km2, await grant. The Company has carefully assembled its portfolio of properties, comprising a broad range from robust exploration targets to near term resource potential, all of which remain largely undeveloped by modern explorers.
With the first tenements granted only in 2021, NBGC has already conducted detailed exploration of its initial targets, including a diamond drill test of two prospects starting in December 2021.
520m of drilling has been carried out at O'Loughlin's and 340m has been carried out at Mt Bute, with samples sent to MinAnalytical Laboratory Services in Perth, WA, for laboratory assay testing.
1 Final Technical Report Berringa Gold Project MIN 4191 Oct 2014. J Fothergill Balmaine Gold Pty Ltd
2 Berringa Exploration Strategy Technical Report: Sept 2004, H Forgan (unpublished)
3 Australasian Code for reporting of Exploration results, Mineral Resources and Reserves - JORC 2012 Edition
The technical information in this report is compiled by David Holden, BSc, MBA, MEM, who is a member of the Australian Institute of Geoscientists and a director of NBGC, and the Exploration Director of RRAL. He is a member of a recognised professional organisation and has sufficient relevant experience to qualify as a qualified person as defined in the Guidance Note for Mining, Oil and Gas Companies, published by AIM.
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.
For further information, please contact:
Andrew Bell 0207 747 9990 Chairman 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