11th May 2016 10:19
LONDON (Alliance News) - Red Rock Resources Ltd on Wednesday said Para Resources Ltd has agreed to expand the concessions held around the El Limon plant in Colombia.
Para, which last week restarted production at the El Limon gold mine following a refurbishment project, has agreed to buy concessions in the Segovia Gold Belt in north east Colombia for USD1.0 million from Otu Gold Ltd.
Red Rock holds a 3.0% royalty stake on output from the El Limon plant and said the new concessions will provide additional feed material to it.
Red Rock said the restart at El Limon last week had allowed it to project around USD300,000 in annual royalty income will flow once steady state production is reached.
"With greater visibility now as to the source of the other half of the material Para plans to process to reach its projected steady state production of 20,000 ounces per annum, we expect to revise those projections upwards over time," said Red Rock Chairman Andrew Bell.
Red Rock shares were trading flat at 0.625 pence Wednesday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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