Red Rock Resources PLC

("Red Rock" or the "Company")

Victoria Gold JV

Assessment of Ajax Mine Potential

1 August 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 50.1% held gold joint venture New Ballarat Gold Corporation Plc ("NBGC") in the Victoria Goldfields of Australia where 1,832 sq km of exploration ground is held through NBGC's subsidiary Red Rock Australasia Pty Ltd ("RRAL").

Following the announcement of 24 May 2022, noting the grant of the key licence EL 007330 containing the historic Ajax mines, RRAL staff have continued to work on developing gold exploration targets. Average lode thicknesses taken from the literature have been set in a wireframe model of the mineralised structures and combined with production and exploration information to create upper and lower grade estimates. The exploration targets generated are conceptual in nature. Once the initial programme designed to validate the models has been completed, it may be possible to further refine the targets and apply discount factors to better estimate the probability of economic quantities and grades being present.   

Highlights

Ajax

·    Initial exploration target confirmed for historical Ajax mines of 254,318 tonnes to 1,422,443 tonnes at a grade range of 6.4 g/t to 18.7 g/t. 

·    Only near-term targets so far defined, with additional targeting likely along strike and down plunge and potentially parallel reef systems to the east and at depth.

·    First phase drilling anticipated before end of 2022.

                                Source: Exploration Target, Ajax Line EL 007330, Report by D Holden, D Sharp and T Meehan, July 2022

Mt Bute

·    Mt Bute drilling confirms coherent mineralised structure; technical assessment in preparation for second phase exploration drilling as an Intrusive related gold prospect.

Red Rock Chairman Andrew Bell comments: "The initial targets for further exploration at the old Ajax mines, combined with those we recently announced at the old Berringa mines, show that at these two major historic mines we have immediate potential for additional ounces. Treatment facilities with spare capacity are within easy distance."

Summary

The recent grant of Exploration licence 7330 has given the Company a robust advanced exploration prospect, on the Ajax line near the small town of Daylesford.

http://www.rns-pdf.londonstockexchange.com/rns/4819U_1-2022-8-1.pdf
Figure 1: Location Map

Investigations into the historical mines along the Ajax Line is progressing quickly as the technical team moves towards drilling to validate the significant quantity of historical data as the Company refines its first near-mine exploration target.

This target has been determined from spatially locating abundant historical mine plans and workings, and incorporating them into the 3D model, with historical mapping and production recorded by the Geological Survey of Victoria from the start of mining through to the first closure around the 1930s.  Untouched down-plunge mineralisation has been identified through this process and target zones have been generated over these areas as probable mineralised lodes below the level of existing workings.

Separately, RRAL has completed diamond drilling activities at its Mt Bute and O'Loughlin's project.  Work now shifts to detailed studies of the multielement data, lithological data, and structural data collected as a precursor to further drill testing later in 2022.

The Ajax Mine.

Regional Geology

EL007330 is located in the Bendigo Structural Zone of the Tasman Fold Belt and covers the north-trending Muckleford Fault. The basement lithology comprises of interbedded slates, siltstones and sandstones, turbiditic sequences of the Ordovician Castlemaine Group that have undergone east-west compression during the Benambran Orogeny. Limb thrusts propagating from bedding parallel layer slip planes formed as fold lock-up approached. The folds form part of larger scale anticlinoria which form broad, gently plunging dome and basin structures. The Daylesford Goldfield is located at the culmination of such a dome on the Daylesford Anticlinorium. Major west-dipping reverse faults are interpreted as listric faults. The regional north-northwest trending Muckleford Fault passes 3 km west of Daylesford and truncates the Daylesford Anticlinorium west of its hinge. (Gough, 2013)[1] Widespread orogenic gold mineralisation associated with faulting occurred during the late stages of deformation. (Arden, 1997)[2]

Local Geology and Mineralisation

Underground mapping in several mines by the Geological Survey of Victoria (GSV) has shown an alternating sequence of shale and sandstone horizons.  In practice these may sometimes represent shale horizons up to 2 metres wide, sandstones that may be massive channel deposits up to 10 metres thick, or alternatively they may represent upward fining sand-dominated turbidite units mapped individually or as groups of units with similar characteristics.

Folds in the area are upright with axial planes dipping steeply to the east, with wavelengths varying from over 500 metres to less than 50 in some places. The fold pattern appears to be far less regular than that observed in the mineralised corridors of the Bendigo or Castlemaine goldfields.  Although faulting may in part explain this irregularity, it appears likely that significant variation in wavelength does exist, as shown on several traverses that have been mapped in detail by the GSV.

Larger amplitude folds appear more likely to host significant mineralisation, with the Ajax line associated with one of the broadest fold limbs in the area. Examination of the available mine plans, combined with the relationship between the faulting and bedding, strongly suggests that the overall plunge of the Ajax anticline is to the south in the Ajax South (14°S) (Macdonald, 2006)[3]

The Ajax mines worked a series of nine stacked reverse fault hosted lodes that dip between 45^o and 90^o to the west (Whitelaw and Baragwanath, 1923)[4]. The faults strike oblique to bedding and consists of laminated quartz that is highly mineralised in places. Mineralisation appears to occur in 'shoots' within these fault systems which have been identified to potentially correspond with favourable lithology. In the case of the Ajax line, the shoots are associated with sandstone containing thinner beds of slate (Whitelaw and Baragwanath, 1923). These lodes have a variable thickness along strike. The following lode thickness in the Ajax Mine have been described and summarised by Whitelaw and Baragwanath, 1923:

·    Ajax Lode: 1 foot to 6 feet. (0.3-2m)

·    McMillans Lode: 3-10 feet. ( 1-3m)

·    North Lode: 1 to 4 feet. (0.3-1.2m)

These faults are only payable in the eastern limb of the anticlines although limited exploration has occurred in the western limb where these faults are reported to be parallel to the bedding with little or no quartz (Arden, 1997). There is the potential for mineralisation in the western limb where these faults become bedded in dark shale units directly after intersecting. This style of mineralisation is commonly seen in the Ballarat goldfields.

At the Nuggetty and North Nuggetty Ajax mines, sub-horizontal tensional veins, known locally as 'flat makes' occur. These veins are up to 90m in width, 2m thick were mined for 340m north and south (Baragwanath, 1923). These veins border the west dipping faults and probably formed in a response to movement along them (Mahar, 2002)[5] In the Ajax line, these veins increase in abundance where the lithology is dominated by thick sand beds which is considered to a reflection of the competency of these units (Mahar, 2002). There is potential for local gold enrichment at the intersection of the east and west dipping faults in the Ajax (Whitelaw and Baragwanath, 1923).

http://www.rns-pdf.londonstockexchange.com/rns/4819U_2-2022-8-1.pdf
Figure 2 west dipping faults in the Ajax (Whitelaw and Baragwanath, 1923).

http://www.rns-pdf.londonstockexchange.com/rns/4819U_3-2022-8-1.pdf
Figure 3 Flat Makes in the Nuggetty Ajax Mine (Whitelaw and Baragwanath, 1923)

The Flat Makes have not been included in the exploration target. They are seen as unmeasured but positive additions to the existing target description. This breakdown between the west dipping faults and flat makes and their individual contribution to production is an important task the technical team is focussing on as more data is recovered from the literature and added to the 3D model.

It may be noted that the previous diamond drilling has indicated that mineralisation extends into surrounding sandstone wall rock containing little to no quartz veining. Petrographic examination of the sediments revealed visible free gold associated with disseminated pyrite aggregates containing an assemblage of arsenopyrite, sphalerite and galena (Bravo, 2001). 

In effect the zones suggest the lodes may be wider than estimated for the exploration target. It also suggests that potentially material stripped from within the earlier workings during any plans to re-enter the former mines, could be payable.

Production

Total gold production from the Daylesford goldfield to date is estimated at in excess of 1.29 million ounces. Primary gold production amounts to 795,254[6] ounces. Most of this production came from the Ajax and Cornish lines, with the Ajax line producing around 312,789 oz. at 14.8 g/t and the Cornish line 182,000 oz. at 10.8 g/t. The deepest mine on the Daylesford goldfield was the Ajax Mine at 370.6m. Outside of the two main lines of lode, several other mines produced significant amounts of gold including the Rising Star Mine (78,458 oz), Maxwell Consolidated (21,989 oz) and the Specimen Hill Mine (35,801 oz). (MacDonald, 2006).

Development of exploration targets.

http://www.rns-pdf.londonstockexchange.com/rns/4819U_4-2022-8-1.pdf
Figure 4  plan view showing the relationship of the historical mine shafts to the initial exploration targets

Determination of the exploration target relies primarily upon detailed descriptions of development and production as recorded by the State's mining authorities of the era.  This information has been detailed for every reported drive shaft and stope. 

It has been over 20 years since any exploration drilling was conducted on the Ajax line of workings and even then, only two drill holes have been drilled beneath the existing workings. This presents RRAL with a very real opportunity to develop resources in the short term as a precursor to fast track the steps to reopening the mine.

The width of the targets has been calculated based on average lode thicknesses detailed by Whitelaw and Baragwanath, 1923 and numerous Government Survey Bulletins, report and Government Mines survey records. Refinement of the widths continues as every known work record is added to the complex 3D computer model.

The downdip extensions of these lodes were selected as targets due to the historical mining of the lodes being stoped as west dippers. The production on the welcome and nuggetty lode were primarily from the flat makes. Although they do provide upside for future targeting, following the down dip potential of endowed west dippers are the preferred first stage exploration approach.

The exploration target discussed in this release, derived from the approximations based upon the literature already reviewed, matches well with the Whitelaw and Baragwanth descriptions.

For the exploration target numerous level plans, longitudinal and cross sections have been registered into 3D.  The outlines of workings then digitized into the model including the broad shape outlines of known stopes.

From the wireframe polygons of stopes and developments, the volume of the 3 main lode structures has been calculated using Micromine mining software.  The combined images of the lode structures highlight the nature and extent of plunging shoots and these have been followed to a distance past the last known working as reflected in the accompanying table below.

Targeting at Ajax is based on following the down dip extension from the historical stoping on the west dipping mineralised faults. The targets are terminated on the fold hinges. Ajax, North and McMillans were selected as primary targets due to the historical stoping occurring on the west dippers, whereas Nuggety and Welcome lodes had stoping on the east dipping spurs.

To each structure a normal specific gravity (SG) of 2.67 g/cc is applied to generate tonnes.  This SG correlates with the SG of quartz (the primary vein material within the lode systems) and is comparable to the SG calculated for resource estimation at the nearby Ballarat mine.

From this maxima and minima for the width of lodes have been calculated from the detailed work previously discussed and an average applied.   

A breakdown of the different lode styles is under construction. For the exploration target, however, this is not yet included.  Research continues to correlate the survey production record back to the active mining. This information is all captured in the text of the Government Survey and mine reports and bulletins and over time, will be further integrated into the model to allow more constrained approximation for grade and volume equivalent to a post mining stope reconciliation.  

Grade has been determined using maxima derived from production records for the historical mines and  minima that has been defined as the current production grade from the nearby Ballarat mine [7](a strong parallel to the Ajax system).  The grade minimum is taken from the production grade at Ballarat.  This is seen as a strong parallel to the mineralisation at Ajax and assumes the lower grade target expected would compare to the actual grade from a larger mechanical mining method where recovery and dilution is present.

The range is further validated with an average grade of a similar tenor to assays previously reported in both the underground workings and the Continent Resources exploration drilling of the 1990s.[8]

A detailed description including a table of the 1990s drilling is contained in the paper previously published on and accessible through the Company's website in the Project section labelled "Licence Report: EL007330" with the title "Tenement Review and Exploration Strategy- EL007330". A more detailed description of the methodology used to calculate the Exploration Targets, and further information and diagrams, is contained in the paper now published on and accessible through the Company's website in the Project section and labelled "Exploration Target, Ajax Line EL 007330, Report by D Holden, D Sharp and T Meehan, July 2022" (https://www.rrrplc.com/projects-and-investments/gold/red-rock-australasia/) . 

Ongoing work will allow RRAL to determine the grade distribution and variation between lode styles and further constrain the maximum and minimum grades of the initial Exploration Target.

The exploration target tabled below and referred to throughout this release is not to be considered as an estimate of a Mineral Resource or Ore Reserve.[9]  The potential quantity and grade is conceptual in nature, and there has been insufficient exploration to estimate a Mineral Resource. It is uncertain if further exploration will result in the subsequent estimation of any Mineral Resource.

http://www.rns-pdf.londonstockexchange.com/rns/4819U_5-2022-8-1.pdf
Figure 5 schematic cross section of the three primary target reefs

It is the intention of the Company to test and confirm the likelihood of the targets with upcoming drilling and the company intends to be in a position to confirm the nature and extent of the target on completion of the initial phase of drilling slated for late 2022.

Exploration Strategy and time frames

Phase 1: Literature Search and Data Collation. Since most of the mines on the Ajax line were large company mines that kept excellent records a large amount of data relating to stoping and grades is available. The data from all these records will continue to be collated to give a further understanding of the grade distribution and average thickness of stopes for the different lodes and style. The breakdown of production levels between individual shear hosted lodes and flat makes will also be determined. Continent Resources completed an extensive data review in the late 1990's. This data will be referenced where available.

Phase 2: Diamond drilling of preferred targets at a spacing yet to be determined. Creation of lithological models based on drill results. This will assist in identifying favourable beds/zones for mineralisation.  The key outcome for the drilling will be to test the validity of the expulsion Target as it stands.  Variation to the expected outcome will also help drive an update to the target and delineate further drilling requirements.

Phase 3: Closer space drilling to an inferred resource level. Drill spacing to be determined once gold distribution and intersection repeatability have been determined from the Phase 2 drilling and previous exploration drill programmes.

Mt Bute.

The last of the assays from both Mt Bute and O'Loughlin's prospects are now in and work commences on evaluating the assay results along with the geochemical data derived from the drilling and sampling.

Technical work also progresses on a number of thin sections of mineralisation identified at Mt Bute.

37% of all assays were above 0.1 g/t for 03 and 46% for 02

Assays from the final hole at the O'Loughlin's prospect (hole OL22D003) have also been received. No reportable result above 0.1g/t were encountered. Initial evaluation of the O'Loughlin's drilling has defined lateral extent of the main mineralised structure and additional field work including detailed mapping to the east of the drilled structure is planned. Conceptually, the mineralisation appears to be bedding parallel structure on the eastern limb of an anticline away from the hinge zone.   More significant mineralisation may exist closer to and in the hinge zone.  Applying this structural model will lead to better targeting  at the prospect in the coming period.

Background

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 licenses 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.

Granted Licences

The fourteen granted and one purchased licence cover high priority areas, covering 1,841km² as outlined below.

Licence Applications

RRAL has applications in process for five other new gold exploration licence areas, covering 493 km² in the Victoria Goldfields of Australia including:

* Balmaine Gold Pty Ltd, Mercator Gold Australia Pty Ltd, and Loddon Gold Pty Ltd have put in competing applications the same day as RRAL for the ground covered by EL007540. The application considered to have greatest merit will eventually be given priority.

The following applications have been made in Western Australia, covering largely areas previously held by the Company at the time of its original listing.

The technical information relating to exploration 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