|Red Rock Resources
||EPS - Basic
||Market Cap (m)
Red Rock Share Discussion Threads
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|Jds thanks for posting that So do we still hold the Anglo shares - probably sold?|
|Will Jupiter restart Mt Ida?
With the recent report that Jupiter Mines are looking to list or sell its 49% stake in the Tshipi mine in South Africa will it turn its attention back to its Mt Ida asset?
Its worth remembering that RRR have a royalty which was 1.5% but 50% of it was sold for $14m in 2012 only $6m of which has been paid so far. (see below). If Mt Ida ever gets going again the Royalty interest sill held + the balance from Anglo must be worth over $20m? For investors not following RRR at that time it may be a potential asset not in anyone calculations.
The RNS in May 2012
Red Rock Resources plc ("Red Rock" or the "Company"), the gold mining and exploration company with projects in Greenland, Colombia and Kenya, and interests in steel feed, uranium, and rare earths, reports further, following the earlier announcements made on 6 February 2012 and 10 April 2012, on the sale to Anglo Pacific Group plc ("Anglo Pacific")(LSE:APF)(TSX:APY) of a 50% interest in the Company's 1.5% gross production royalty over any production from the Mt Ida iron ore project.
Following successful due diligence inquiries, the Foreign Investment Review Board of Australia granted approval for the transaction to proceed, and Jupiter Mines Ltd executed a deed of assignment of the sold interest as required. Subsequently, on 1 May 2012 Red Rock and Anglo Pacific successfully completed the royalty sale transaction.
The Tranche 1 payment of U.S.$6,000,000 for 0.3% of the GRR has been settled by the payment of U.S.$3,899,999.81 less some applicable costs and the issue and allotment to Red Rock of 416,161 new Anglo Pacific shares. These shares were valued at approximately $2,139,730 at the close of trading on 1 May 2012 and will rank pari passu in every respect with the existing ordinary shares of Anglo Pacific. The Board understands that Anglo Pacific will make applications to the UK Listing Authority, the London Stock Exchange and the Toronto Stock Exchange for the new shares to be admitted to the official list.
The remaining tranches of the acquisition total US$8 million and will be paid as follows:
-- Tranche 2: US$4 million payment for a further 0.225% GRR following the results of a positive definitive feasibility study (DFS), a formal decision to mine and that 20% of the pre- production capital costs outlined in the DFS are provided for.
-- Tranche 3: US$4 million for a further 0.225% GRR following the commencement of commercial production, taking the total to 0.75% GRR.|
|Hmmm possibly some annoying T trades that need settled - MMs scrambling for stock - price holding strongly...v positive|
|We tipped Red Rock (RRR) just a week or so ago at a 0.50p offer. it is now 0.7p bid so the gain is 40% so far. Results for the year to June 30th were out on Friday and start with a comment from marmite Andrew Bell:
"Turning points are usually only evident in retrospect, and however obvious they may then seem, they rarely were at the time. We have in the last year lived through one of those points of inflection, and it happened quickly and without explanation, as if events were moved by an invisible tide. It was the turning of commodity prices from decline to recovery, and because the final collapse had been so severe and universal, so the recovery when it came was abrupt and as the signal spread from commodity to commodity all prices rose together." Indeed.
Red Rock has moved from owning a collection on non cash generators to owning real cash generators in oil, gold and manganeze. It has also slashed corporate costs so it no longer needs a constant stream of equity issues to stay afloat.
The big win was in manganeze with news that Jupiter is to pay a dividend ( worth well over half a million quid to Red Rock) and will IPO next year with a valuation that suggests that Red Rock still trades at a discount to the value of its shares in Jupiter. There will also be another dividend, at least as large, coming in 2017. But there are also other income streams coming along, viz gold royalties in Colombia and oil income in the US. These are not reflected in the results just published where operating income was nil but will all kick in during the first half of this year.
In 2016 admin costs fell by 20.4% to £758,371 but that number includes material redundancy costs and most of the savings were only felt in the second half. Thus in 2017 the PLC costs will already be more than covered by the first Jupiter dividend alone. So ignore last year's loss of £283,280. Look forward to this year when the company will book a profit and will also see material cash inflows, not least the remaining monies due from the Colombian sale which will be at least £350,000 - a good whack of that money has already arrived.
The investment case is underpinned by the Jupiter shares but with royalties set to continue to flow from Colombian gold and US oil there are more real tangible assets in the locker. On the blue sky front Red Rock owns shares in AIM listed Goldstone ( worth c£150,000), shares in unlisted Elephant Oil ( we'd value at nil) and the 1.2 million ounce Migori gold asset in Kenya. This is the subject of legal disputes and may also be worth nil or it may be worth a lot more.
At a 0.7p offer Red Rock is now valued at £3.2 million. We reckon that the value of the Jupiter shares post IPO plus the next dividend is at least £3.4 million. The value of Red Rocks royalty stream in Colombia, its US oil assets, Goldstone shares and AIM listing must be at least another £1 million. Elephant and Kenya we'd value at nil but offer upside potential.
On that basis we up the targets. The shares are a buy if you are able to purchase any on a pullback at up to 0.7p ( and no more) with a target to sell of 0.9p
- See more at: hxxp://www.shareprophets.com/views/25705/red-rock-resources-results-the-dog-is-no-longer#sthash.5nS3ybT8.dpuf|
-- US$55m distribution by Jupiter means a US$658,350 (cGBP530,000) distribution to Red Rock.
-- Distribution will be payable in March 2017.
-- Jupiter expects further distributions in 2017 if manganese price continues strong.
-- Production in year to February 2017 will comfortably exceed near 2m t target.
-- Tshipi distribution repays shareholders 50% of capital cost of mine with over 60 years mine life remaining.|
|Investors know it and rerating price valuation is on the cards now .This afternoon is on its way to what many finding a real bargain to make big money ?.Price heading to what could be seriously multibagger.|
|a well north off 1p immediate Target price
yes agree he bought at the wrong time and at the height of the commodity boom and continued to buy during the downturn - I can be critical and was of the old management team at SML. I am neutral on AB for the time being, of course my views would be very different had I bought at 16p. In his defence there have been Boards of natural resource companies who got the timing very wrong and "called" the bottom when there was 2/3 years still to run - and these are Boards with proven management for example GRIT....
RRR have done well, call it a sound management decision or luck or both, in buying and keeping the Jupiter stake. This is a world class mine - no doubt about that and I think all would agree with this. A South 32 bid, ASX listing (Gilbertson and Jupiter Board are big players and will know who to extract full value) long life mine 60 years, lowest cost quartile......
Underpinning this is China coming out of a slow down and embarking on its next 5 year plan and the US under its new President pledging to spend $1 trillion
on infrastructure . This is a colossal sum. This money will be poured into building the US again and that will require Fe and Jupiter provides an essential feed commodity (like coking coal) in the production of Fe. All things being equal (which of course they rarely are) the price of manganese should continue to rise and Tshipi being one of the biggest world class manganese mines (with 60 years to run which ticks a very big tick for the majors i.e. life of mine) will be listed or taken out (and lets not forget a bid coming from the Chinese).
And then there are all the other cash streams
AB has been given a life line with Tshipi and lets hope he remains prudent this time round but the Jupiter stake is worth a lot of value for RRR, no doubt about it. Going forward RRR's mcap has to be many multiples of where it is now.|
|the market i hope is digesting and appreciating the substantial value coming through on the top line and significant cost savings yet to show through on the G&A costs
" Our Administration expenses for the year at GBP758,371 were reduced by 20.4% but reflect the lower cost level for only half of the year, and contain substantial redundancy costs"|
|Another positive RNS from rrr and investors will be seeing double digits not far away.Buyers have been flocking in as we see talk of 4-5p at the moment these are the stocks to watch carefully obviously very hot at the moment ?|
|Then I wish you the best of luck.
Seen these boards full of such bullish talk so many times it doesnt surprise me any more. Always ends the same way tho, the Bulls disappear with a profit and the mug punters are left holding confetti.
Look at the share price chart if you doubt me.
Hope you trade this right
|Ke - Hope so.
well at least the sellers from .40p seem to have been cleared out|
|xcap, I think you should - you obviously know what you are doing!|
|lazy - yes i agree and would join you and load up/top up at those levels|
|If it drops back to the 0.4 levels, I may buy in, now they're starting to get cash into the business.
|this in particular reads well
Our Administration expenses for the year at GBP758,371 were reduced by 20.4% but reflect the lower cost level for only half of the year, and contain substantial redundancy costs|
there should a significant reduction in GA expenditure feeding through as well. Should make you happy
The other priorities during the year were to continue and intensify the process of reducing and laying off costs, to reduce payables, to continue disposals of non-core assets, and to reduce dependence on the market for new capital. In all of these aims we had some success. We sublet office space and laid off the majority of our staff, eliminating the bulk of our overhead cost for the second half of the financial year. Our Administration expenses for the year at GBP758,371 were reduced by 20.4% but reflect the lower cost level for only half of the year, and contain substantial redundancy costs|
|Trump is promising to launch up to $1billion in infrastructure spending in roads, railways bridges and public buildings
that will require a lot of iron and Fe feed = manganese|
|"With RRR’s others project assets such as those in Kenya, Greenland, US-Shoats Creek and investments in Colombia, GoldStone and Elephant Oil included in our valuation as previously estimated, our revised valuation comes to £20.5m, (prev. £13.3m). Our share price target is correspondingly lifted by 57% from 2.8p to 4.4p, with a ‘Buy’ recommendation. A closing market cap for Red Rock last Friday of £1.9m, seems far too low, given today’s news, and maybe the prospect of other forgotten assets within the Group's portfolio surprising investors with positive news in the near future, as commodity prices continue to rebound".|