There’s been some very good news today from Red Rock with its purchase of 51% of MFP. Red Rock exercised options over 51% of the issued share capital of its partner Mineras Four Points at a reduced initial cost, with remaining payments related to the achievement of key targets. Now this is a good piece of business for share-holders as RRR have managed to negotiate certain favourable conditions two of which I’ve high-lighted.
1/ US$1,000,000 deferred until MFP has an average ore production of 150 tonnes per day for a continuous 90 day period. 2/A further $998,000 payable only when MFP achieves a net operating profit of US$10,000,000 in one year.
The MFP shares have been acquired through the acquisition of the entire issued share capital of American Gold Mines Limited (“AGM”),
A canny piece of business from RRR and a further pointer as to the direction of this company over the coming year.
Red Rock only decided to exercise its options once MFP got the mines and plant commissioned, with all parts delivered and operational. “It had been the intention of the Company from the time of executing the Agreement in June 2010 to exercise the options only when it was confident that the mine provided a satisfactory working environment” So said RRR!
Now the above acquisition isn’t Red Rock’s main assets RRR have a portfolio of gold assets Migori gold project in Kenya and the El Limón mine Colombia. Migori has 1.171 million ounces of gold currently defined with 2 million ounces targeted. El Limón is a narrow vein deposit, so lacks a defined
resource, but the mine has been operational for 60 years and RRR believes it can significantly improve the currently inefficient operation.
They have been trending down as of the last month currently opened up at 10.75p However they always surge upwards on good news and investor sentiment. Gold-Fever. The market has witnessed them surge up over 20p!
The Board of Directors are well thought of from within the small-caps sections of many Brokerages. And with an increasingly volatile world the flight to gold should help the sp over 2011. They have the potential to hit 50p in any one day depending on the news flow from their main Gold assets. They also have a loyal retail following of investors who are convinced that RRR will be £££’s in the not too distant future and I must say it’s difficult to argue against this given their huge potential over the next year or two!
25P is easily attainable here over the coming weeks that’s in excess of 100% upside. It’s all down to the news time-line and I can’t see any news here other than Good!
NB**Apology for the RRL ticker got back late from Blackpool and am lacking sleep trying to write two posts at the same time!!!!