14th Nov 2013 16:15
LONDON (Alliance News) - Red Rock Resources PLC Thursday said it will raise GBP297,000 by placing 45 million shares with a long-term investor and use most of the funds to increase its stake in Jupiter Mines Ltd by buying 8 million shares in the Australian company, which is about to de-list.
After the deal, Red Rock will hold a 1.21% stake in Jupiter and retain a 0.75% gross revenue royalty over Jupiter's Ida project and non-manganese mineral rights over a further Jupiter tenement. It previously held a 0.86% stake in Jupiter.
Red Rock said it will now seek permission from its shareholders to issue more shares as the existing authority to issue shares has almost been used up.
Red Rock is a mining and exploration company with an iron ore project in Greenland, a producing gold mine in Colombia, and advanced gold and copper exploration in Kenya.
Jupiter is de-listing from the Australian Stock Exchange because of a lack of liquidity in its shares and because it has sufficient funds for its plans for the next two to three years and therefore has no need of raising funds by issuing equity. However, Red Rock is confident about increasing its holding ahead of the company going private.
"The current price we believe is an investment opportunity we cannot match elsewhere and gives us an opportunity to strengthen the Company's long-term asset position," said Red Rock Chairman Andrew Bell, who also sits on the board of Jupiter.
"Jupiter intends to delist, which makes it impossible for some funds to hold, but this is not a consideration for us as whenever we have sold it has been to a major holder, and Jupiter intends to assist buyers and sellers to match transactions after delisting," Bell added in a statement.
Red Rock Resources shares were down 3.8% at 0.630 pence Thursday afternoon.
By Steve McGrath; [email protected]; @stevemcgrath1
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