Red Rock Resources plc Jupiter Mines: US$55m Distribution to Shareholders (6283P)
21 November 2016 - 7:00AM
UK Regulatory
TIDMRRR
RNS Number : 6283P
Red Rock Resources plc
21 November 2016
Red Rock Resources plc
("Red Rock" or the "Company")
Jupiter Mines: US$55m Distribution to Shareholders
21 November 2016
Jupiter Mines Ltd ("Jupiter"), an Australian unlisted public
company in which Red Rock owns 27,324,375 shares, has announced
that its 49.9% owned associate Tshipi é Ntle Manganese Mining
Proprietary Ltd ("Tshipi") has resolved to distribute ZAR 1 billion
to its shareholders in respect of the year ending 28 February 2017,
subject to there being no material change in production and market
conditions for the rest of the financial year. Jupiter has resolved
on receipt of its portion of this payment to distribute US$55m to
its own shareholders.
Highlights:
-- 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
-- Jupiter to pursue "strategic options" for its investment
Red Rock Chairman Andrew Bell comments: "The last 12 months have
seen all-time lows in the manganese market and more recently record
prices in South African Rand. Tshipi had already shown itself to be
significantly profitable at prices below $3 per DMTU, and when
prices were low Tshipi tightened its cost structure further, making
it one of the most efficient and low cost operators. Tshipi now
takes its place as a world class mine and a major force in the
manganese market, with profits to match. We anticipate a
continuation of stable-to-favourable market conditions, from which
Tshipi is well placed to benefit, as it enters what the Jupiter
Chairman calls the "value optimization phase". Red Rock has
patiently held this investment, confident in its underlying
quality, and continues to see significant upside."
Notes
The Tshipi mine is in the Kalahari Manganese Basin of South
Africa, thought to contain some 80% of the world's metallurgical
grade manganese. Tshipi is one of the five largest manganese
operations globally, and one of the three largest in South
Africa.
The Tshipi mine has been in operation as an open pit mine over
three full years. In these years, to February 2016, the average
manganese price for the 37% ore that Tshipi is producing has been
US$3.06 per DMTU (Dry Metric Tonne Unit). The manganese price has
been in decline over the period, reaching lows of US$1.32 per DMTU
towards the end of the last financial year. There has been a
recovery since, with the price trading for much of this year
between US$2 and US$3 per DMTU and recently at levels up to and at
times exceeding US$6 per DMTU.
The Tshipi mine is in the lowest cost quartile of global
manganese producers. Classified Resources of the Bottom Cut, which
is currently being mined, were stated to be 163m tons at 37.1% in
the Independent Technical Report announced by Jupiter on 6 July
2010. It was noted that down dip from the open pit design, the
Resource was open and there was scope for significant increase in
the Classified Resource base. Resources in the Upper Cut, currently
mainly being stockpiled, were stated to be 145m tons at 31.75%.
Production capacity was 2.4m tons per annum and is increasing to
3.6m tons per annum. Production in the three years to 28 February
2016 was 0.94m t, 2.11m t and 1.54m t respectively, with the target
for the current year initially set at just under 2m t but now
expected to be comfortably exceeded.
Red Rock holds 27,324,375 shares in Jupiter, equivalent to
approximately 1.2% of the issued share capital. The carrying cost
of this investment in the books of Red Rock at the date of the last
audited accounts, 30 June 2015, was GBP1,304,646.
Further details of the distribution planned are available on
Jupiter's website at www.jupitermines.com
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
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
The company news service from the London Stock Exchange
END
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November 21, 2016 02:00 ET (07:00 GMT)