Red Rock Resources Share Discussion Threads

[atino] 01/8/2014 15:42

Dear Shareholders and Colleagues,

Resource Star's Move into Technology Sector

You will, we hope, have seen today's announcement in relation to Resource Star. Since it may seem strange for a resources company to be investing, even indirectly, in technology, we thought a newsletter on the subject would be welcomed by our readers. Resource Star was set up by Red Rock as a back door listing for uranium assets that came with some of our iron ore assets in Australia, and at the same time took on a uranium project in Malawi. At the time, prospects for uranium looked good, the Australian market was supportive, and the first two Chief Executives were people with exceptional skill sets that got the company off to a good start. But the Fukishima nuclear disaster in Japan changed the landscape for uranium (although the uranium sector might have had hard times anyway with the decline in interest in small resource companies in Australia). Because projected uranium demand is highly dependent on the first fill (the four years initial supply to a new nuclear plant), the cancellations and delays in projected plant construction that followed the nuclear accident changed the supply-demand balance projection dramatically.

A small organism like Resource Star has little ability to withstand climatic change for long and although it had endured to 2013, the efforts of the then-Chief Executives to find a new project were unsuccessful and, in at least one case, ill-thought out. We therefore stepped in, took executive control, cut costs to almost nothing, and brought in new substantial shareholders who backed first a placing then a rights issue, and who have the capacity to continue to support the company. The benefits of their involvement, which created three more-or- less equal shareholding groups (of which we were one), was that they came with contacts and deal flow. Our strategy had always been to allow our shareholding to creep up from 20% to 40% or so as the market declined, with a view that this would enable us to bring in a new project and go back to 20% when recovery was in sight. The view we took in conjunction with other shareholders was that we should not be restricted to the minerals sector where it would be very hard in the liquidity conditions prevailing in the Australian market to find capital to back a project, but should also look at oil and technology sectors that were in favour.

The aim in this was quite simply to recover value for Red Rock shareholders.
The Cloud Lands transaction is one where one of our RSL shareholders has known one of the principals backing Cloud Lands for very many years, and there is a measure of trust in some of the team that would implement the strategy. The technology sector attracts interest in Australia, the records of some of the executives in building value are good, and in entering into this option Resource Star can expect to attract additional funding during the option period of over $400,000. Therefore, even if the 90 day option is not exercised, the company will be better off coming out than it was going in.

And – a particularly important point – we (RRR) do not put up any of the money.
In the end, we are not a technology investor, therefore we will be sellers of stock over time. But when you look back to the beginning of the year, when the share price was falling in low volume, and to the last six months when it was flat-lining at 0.4c, the situation now is vastly better. The company has expectations of funding, and an option on what may be an interesting transaction. There is stock market interest and the price is considerably higher. A year ago, one would have laid long odds against the company's survival, since its liabilities arguably exceeded its shell value. That we have turned it around and still have 20.94% is a tribute to the accumulative power of small moves carried out sequentially, and to the value of persistence. In short, we are better off than we were three weeks ago, we are better off than we were at the beginning of the year, and we are better off than we had any right to expect to be. This is a gift horse that if we were to realise at today's price would be worth some $900,000, and may rise further in value. A few days ago, it was a fraction of that value, and unsaleable.

We would point out that outlying investments of sister company, Regency Mines, have been through the same process – in each case, with our assistance. In the case of Regency, we happen to have exploration assets in the one area of Australia that is 'hot' in exploration terms, and Regency put it into an Australian listed vehicle which has prospered, seen a substantial rise, and attracted significant funding since. Regency identified and put in place the management that is highly respected. In the case of ALBA, some of the same processes occurred. Each of these companies, like Resource Star, has ended up with a project that is attractive to the market.

We are glad to provide some reassurance that we at Red Rock are deal makers as well as explorers. In fact, we consider ourselves to be quite proficient deal-makers – as evidenced by our record at Jupiter Mines and in other transactions we've executed or been involved in over the years. Our great frustration in the last two years, which we know shareholders have shared, has been that sales processes at two of Red Rock's assets have taken an unconscionably long time. The lesson of this is that in declining markets, buyers are not always to be relied on, and the initiative always lies with them. It is not that the asset is unsaleable, or that we are incapable of selling it. Over the coming months, we hope to close a sale of our Colombian asset.

Jupiter Mines has continued to perform well as the linked report of OM Holdings to the right bears out, along with an article about Tshipi. Jupiter has also commissioned an industry report on the Tshipi mine, which has come up with an enterprise value, that we hope may soon be in the public domain. Jupiter was another example of a company – in this case one to which we had sold some iron ore assets that needed rescuing – where we brought management and projects. Though of course you will know we are not always successful in this; we were also a significant shareholder in Ascot Mining and tried hard to rescue them when they were falling into an untenable position, however the management entirely failed to understand their vulnerability and we were in the end unable to assist.
There is always high mortality in small exploration companies at lows in the market, and we have devoted considerable energies to turning round related entities so that shareholders now have some prospects of recovery. This is in our interests too.

Cloud Lands, over which RSL has taken an option, is moving into Cloud Services – an area of high growth. The overall Cloud Services market is doubling, according to some analysts, every 4 years. The sectors within which Cloud Lands intends to
concentrate, IaaS and PaaS, are growing at double rates at 2 years and 3 years respectively. Australia is a growth, or catch-up, market for Cloud Services, and RSL expects this management to carve out a niche within this fast growing universe.

For those interested in more information on Resource Star's transaction, we recommend you stay tuned to their website, which for the meantime we are running and which will have regular updates: www.resourcestar.com.au

Natasha Walton
Head of Marketing & Community Affairs

[seagullsslimjim] 01/8/2014 13:24

AAE - but is there room in the obuliette for a trojan horse when this gets forgotten about?

must be mighty claustrophobic down there with so many projects on the back burner.

Not long now till the Greenland deal completes though !

[soulsauce] 01/8/2014 13:09

Cheers oilman

[1oilman] 01/8/2014 13:07

soul OEX IS ONE NOT TO BE OUT OF THIS WEEKEND!!

HUGE COMPANY CHANGING NEWS COMING NEXT WEEK

sharemag have a 30p target.

currently 10p. see thread for news thats coming

[soulsauce] 01/8/2014 12:31

AAE that should read 'YET ANOTHER EQUITY FINANCE PARCEL TO WHICH THERE SEEMS NO END'

YA must be rubbing their hands.

[kezman01] 01/8/2014 12:24

zzzzzzzzzzzzz

[atinos auntie ettie] 01/8/2014 11:58

The spellbinding Resource Star option agreement is perhaps not so perfectly timed to see price reactivity this week during the processing of an equity finance parcel, but for the true reaction witness the movement over on the ASX, where it merited a small upwards surge, thus confirming the excellence of the decision to diversify. Those who clamoured for a move toward the technology arena must be truly thrilled and those who cried foul at that prospect can equally be pleased that the project is external from the company and listed on another country's exchange altogether. Technology has found its path into the portfolio in the manner of a trojan horse. The holding in Resource Star can sit there quietly and if a success then perhaps a secondary investment in technology may be made at the company level.

[digger27] 01/8/2014 11:42

We are being taken to cloud cuckoo land following exposure to radio active material. Some of us didn't need any help though.

[atino] 01/8/2014 10:35

Talk to me OVER AT the RGM THREAD Kez (...where other 'egghead' shareholders can HEAR us *__^)

I've got PLENTY of 'time' (...and beatings! LOL) for you...

[kezman01] 01/8/2014 10:08

You take stupidity to a new level.....bravo.

[atino] 01/8/2014 09:47

Morning Kez ^__^

Yep...(chess pieces moving & make that 2 'high net worth INVESTORS'...in RRR & RSL...and RGM 'NIL':-)) LOL *__*

Richie - 'eggheads' huh? LOL




[Quote] "Red Rock Resources backs associate company's change of direction"

Miner Red Rock Resources (LON:RRR) is, indirectly, sticking its finger into the Cloud-computing pie.
The company revealed that Aussie firm Resource Star Limited (RSL), in which it has a 21% stake, has secured an exclusive option to acquire Australian cloud computing service and infrastructure provider Cloud Lands Digital Fortress.
Cloud Lands intends to become a provider of highly secure Cloud services to the Tier 2 enterprise and small-to-medium enterprise (SME) market.

Andrew Bell, who is chairman of both Red Rock and RSL, said: "There is a gap in the market here that has attracted RSL to Cloud Lands' business model; large cloud service providers offer premium services to Tier 1 companies, but few platforms are on offer to Tier 2 and SME customers, and those that are do not provide the same service level.

"The business record and connections of the key personnel will give the business in RSL's view a good chance of success in a fast moving marketplace."
The investment represents a material change in the nature of RSL's business, which Red Rock wholeheartedly supports.

"RSL's investment gives us a level of diversification and exposure to a different and more popular part of the market. We hope for great things from the Cloud Lands service, and eventually a realisation of the value of our RSL holding," Bell said.

hxxp://www.proactiveinvestors.co.uk/companies/news/70910/red-rock-resources-backs-associate-companys-change-of-direction-70910.html

hxxp://203.15.147.66/asxpdf/20140801/pdf/42r6v3rmly4ylt.pdf

[kezman01] 01/8/2014 09:34

That RNS really did the business.....wow look at it go!!

[hopeless698] 01/8/2014 07:13

From the Hotcopper Website...


Fellow traders

Boorah..
. What the coming compliance type announcement is not going to be able to say....


Burton is a respected resource deal mover and shaker where Smith is considered one of the best stock promoters in the business. Put these two together and your have some interesting dynamics.

Word on tech street is that Smith has used his old dot com tech network to put together the dream team of tech giants being Fujitsu, Cisco and Check Point into a startup which is a remarkable effort. It gets more interesting though, google "managed cloud services" and all the usual suspects (Oracle, IBM etc) are in this space competing for the large tier 1 enterprise customers. They carry the typical baggage of incumbents and therein lies the opportunity.

Apparently Smith has negotiated a deal where Fujitsu hosts and manages a state of the art Cisco VBlock IaaS solution with security provided by Check Point. It gets better, essentially Cloud Lands through it's partnerships will aggregate Tier 2 and SME clients and become a Fujitsu Tier 1 customer by way of this massive aggregation. Fujitsu will provide 24/7 Tier 1 support to Cloud Lands customers as a fully managed cloud service. Think of it in terms of a Cloud Lands nerd turns up on your SME premises to migrate your business to the cloud but he is wearing Fujitsu boxer shorts. Combine this with the industry leadng IaaS hardware provided by Cisco and the worlds top SaaS Check Point (not even the CIA will be able to access your data because they are Israeli) and you have a silver bullet disruptive business. The big players have no idea how to tackle the SME market.


I suspect that Smith will wholesale this managed cloud service like he did at RequestDSL by way of channel partners. Further to this the word in Melbourne is that he is recruiting a top industry player to chair the new company and build the sales and delivery team (and no doubt base the executive team in Melbourne like he did with RequestDSL). As the founder and a major shareholder Smith will want the best team in place to run the company while he just promotes it in the background. He is relaunching himself with good people rather than some of the "all talk no action" guys at Blackwood and Whiddon in Perth. Funny thing I herd that the other week on a Friday nite at the up market Steves in Crawley a group of young lawyers decided that it was a good idea to mess with Smith clearly not realizing who the dude in the suit was. It didn't end well with Smith dropping a guy bigger and 15 years younger than him with asisingle punch while the guys mates just stood there lol.... people say a lot about Smith but they are too scared to say it to his face. Police were called but he was as cool as a cucumber and got arrested and then let go (a mate of mine saw it happen he is quick and doesn't muck around).



Happy hunting.

[kezman01] 31/7/2014 19:38

Atino

You were giving it large about D Bar as I remember.......Mug

[richie1218] 31/7/2014 19:15

Atino as sure as eggs are eggs RGM will move north with RRR as they have a c10% holding of RRR shares.

[atino] 31/7/2014 18:55

...so we have...'high net worth' investors :in DS [...for Planet Red Rock]....and also 'potentially' in Craig Burton [...with RSL] ^__^


'Chess pieces' have moved/moving ^__*


But what 'high net worth' investors...are RGM...'LEFT' with ^__* ????? AB ?? LOL (...wasn't there a motto...to follow...'The Smart Money' Kez ?) hahahah


...I've got one of your testicles nearly by the hand...and I'm just waiting...to GRAB the other, for a lovely TIGHT SQUEEZE:-)))) LOL