By Alastair Ford
As ever with a company managed by Andrew Bell – the mercurial entrepreneur who cut deals all the way through the last boom and still has a penchant for cutting deals now – there is plenty going on at Red Rock Resources.
Attention will shortly shift to an extensive gold exploration programme in Cote D’Ivoire, but in the immediate future there remains the question of the US$5 million sale of the Colombian gold assets.
“We’re waiting for the Columbia sale to be completed”, says Andrew, on the phone to Minesite one sunny March morning.
“But you’re talking about a cross-border transaction – two borders in fact: here, the North American buyer and the assets in South America. I can understand that a small buyer has found it a bit of a challenge.”
The deal was first announced back in May of 2014 and was due to close midway through December. That date was missed, but Red Rock then announced at the end of January that draft agreements had been reviewed and changes agreed. Now, one month on, and it could be just a matter of a few more weeks, or even days, before the deal finally closes.
The trouble has been, says Andrew, that the issues are all being tackled “in series rather than in parallel”. But, he adds: “We can’t tell our counterparties who to use. If we’d been doing it we would have got some lawyer like Norton Rose to do it – they would have had all the expertise in-house.”
As it is, completion of the deal now looks tantalisingly near, and in investors should expect an update on Colombia shortly. In the meantime, though interest is shifting over to Cote D’Ivoire, where Red Rock now has an extensive land package on which exploration has been ongoing for some time.
“We’ve got just under 650 composite samples from our geochem programme across 250 square kilometres”, says Andrew. “Given that we also know where the artisanal miners are, and we know the geology, these samples will guide us on where to do the more detailed geochem work. And within the next week or so we’ll have something to announce on that.”
The opportunity on the Cote D’Ivoire ground does look intriguing, even if its full potential has yet to be understood by the market.
“It’s just over the border from Ghana”, says Andrew. “But it’s forested. In the north of the country people could look over the border at Burkina Faso and Mali and see very open country – where it’s easiest to look and to find things. So when you look over the border at our ground, closer to the coast, it looks like a sitting duck but it’s forested so it’s not so easy to explore. That’s why we’ve been able to pick up what is the largest ground position in that area. North of us Endeavour has got a 60 kilometre gold anomaly. I’m hopeful we’ll get something from the first batch of results. But if not we’ll continue.”
It might not be easy ground, but Andrew knows he’s on to something because various parties have already approached Red Rock and asked to sign non disclosure agreements.
And in support of these endeavours sits Red Rock’s investment portfolio. Central to this is a significant stake in Jupiter Mines, which operates one of the world’s leading manganese mines, at Tshipi in the Kalahari Desert. “Tshipi has”, says Andrew, “a life of many decades ahead of it. It’s been profitable from day one. It’s been a terrific success. And for the year just ended there ought to be a dividend. When people see that, the value will become clearer. It’s obviously always tempting to sell out. But I think that in a very unpredictable market that would be short-termism.”
So Jupiter stays for now. As to the other major stake, that’s more up in the air. Resource Star remains a cash shell, following the floundering of a mooted reversal. But if a deal was done and the price did move, Andrew hints that he would probably be a willing seller.
Then there’s the stake in Regency, Andrew’s other major vehicle. This cross-holding has served a useful purpose in the past, discouraging unwanted attention, and is likely to remain a part of the Red Rock asset base.