Red Rock Resources Regulatory News (RRR)

28 Dec 2005 13:51

Red Rock Resources plc28 December 2005 Red Rock Resources plc Acquisition of properties prospective for uranium mineralisation in Malawi Dated: 28 December 2005 Red Rock Resources plc ("Red Rock" or the "Company") the mineral exploration anddevelopment company focussed on advancing iron ore, uranium and manganeseprojects in Western Australia and in Tasmania announced today it has purchasedtwo mineral properties prospective for uranium, located in the East Africancountry of Malawi. These properties comprise Exclusive Prospecting Licences ("EPL") for the Chintheche property and the Machinga property, comprisingapproximately 458.6 square kilometres. The consideration of £23,300 will be satisfied in full by the issue of 800,000new ordinary shares in the Company ("New Shares") at 2.6p per share and2,500,000 ordinary shares of 0.1p in Zeus Energy Ltd ("Zeus"), a subsidiary ofRed Rock, at par. It is the Company's intention to transfer all its uraniumassets to Zeus with the eventual intention of applying for the issued sharecapital of Zeus to be admitted to the AIM Market of the London Stock Exchange ("AIM"). The Company has made application for the New Shares to be admitted totrading on the AIM from 4 January 2006. Uranium in Malawi There has been a significant increase in exploration activities, and in theapplication for EPLs in Malawi, led by the activities of Paladin NL of Australia(a subsidiary of Paladin Resources NL), focused on the Kayelekera uraniumdeposit which was discovered and worked on by the U.K's Central ElectricityGenerating Board in the early 1980's. The Chintheche EPL The Chintheche property of 135.6 square kilometres covers the Chinthecheradioactive zone as defined by the "Interpretation of Airborne GeophysicalSurvey Results" by Paterson, Grant & Watson for the United Nations DevelopmentProgramme Report in October 1987 (the "UNDP report"), from a survey completed byHunting Geology and Geophysics of Toronto, Canada, flown in 1986, as part of aUnited Nation sponsored program. The Chintheche radioactive zone is located south of the town of Nkhata Bay onthe west shore of Lake Malawi. The EPL application covers the village ofChintheche and is acquired based on the recommendation from the UNDP reportwhich indicated the following: "The north-south trending Chintheche anomalous zone is underlain by interpretedquartzites, quartz schist and amphibolites north of Chintheche, andhornblende-biotite gneiss to the south. The regional mapping indicates a numberof interpreted faults underlying the Timberi clays and gravels; the north tonorth-north-east structure parallels the highly anomalous radiometric anomaly(U+KTH+)." Red Rock will complete an extensive review of all previous data, followed by aPhase 1 exploration program consisting of ground magnetics and spectrometersurveys, geological mapping, geochemical surveys and prospecting, directed at aninitial drill program to test anomalous targets. The Machinga EPL The Machinga property covers some 323 square kilometres just north of the oldcapital city of Zomba in south central Malawi. The UNDP report indicated twoareas for investigation for uranium exploration; the Chinduzi Radioactive Zone,and the Machinga Radioactive Zone. Both of these target areas are covered by theMachinga Property. The Machinga Radioactive Zone is located south of the town of Liwonde and northof Zomba, in south-central Malawi. The EPL application covers the village ofMachinga (formerly Kasupe). The UNDP report describes the Machinga radioactivezone as: "highly anomalous radiometric responses in the Machinga Target area areassociated with pegmatites, granititic dikes and veins, intruding theZomba-Chaone-Malasa syenite complex and surrounding basement gneisses. Previouswork was successful in detecting sub-economic grades of niobium and thorium andlesser amounts of uranium. Based on the results of the present processing andinterpretation, we believe that the search radius for radioactive and rareminerals should be extended within the target area." The Chinduzi Radioactive Zone is located at the south-eastern edge of theChinduzi nepheline syenite. The UNDP report indicates: "The area immediately underlying the strong uranium anomaly (U+ on the ternaryspectrometer map) has mapped exposures of pegmatite dikes along the contactbetween the nepheline-syenite to the north and the interpreted charnockiticgneiss to the south. This geological-spectrometric correlation is similar to theMachinga TH-U prospect to the east and therefore been selected as a new economictarget for uranium, thorium and rare earth mineralization". Red Rock plans a review of all previous data and an initial sampling program ofknown niobium, thorium and uranium occurrences, followed by a Phase 1exploration program consisting of ground magnetics, electromagnetic, andspectrometer surveys, geological mapping, geochemical surveys and prospecting,directed at an initial drill program to test anomalous targets. Reasons for the acquisition and the consideration Red Rock has purchased these prospective uranium properties from KleinebarResources Ltd. ("Kleinebar"), a Canadian consulting company, as part of a focuson uranium in Malawi and other parts of Africa. The directors consider theproperties to be attractive uranium properties identified and interpreted aspriority targets by high quality geophysical work. Under the agreement withKleinebar, the total consideration of £23,300 was satisfied by the issue of800,000 New Shares of 0.1p at 2.6p per share and the issue of 2,500,000 newordinary shares of 0.1p in Zeus, a subsidiary of Red Rock, at par, Up toC$15,000 of receipted expenditure incurred by Kleinebar in relation to theproperties will be reimbursed. Two further significant areas have been applied for, 165 sq km at Ilomba Hilland 154.6 sq km at Tambani, which have not been granted owing to the presence ofoverlapping exploration licenses for other minerals. At the Ilomba Hill uraniumniobium deposit in the northwest of the country exploration by Goldfields ofSouth Africa and others identified five radiometric zones considered to be dueto uranium on which some trenching was carried out. The resource estimate wouldneed to be revalidated to comply with modern codes. At Tambani in the south westof the country local exploration in the 1950s uncovered a number of smalluranium and thorium occurrences. The targets include a possible small high gradeuranium deposit. Deferred consideration In the event of grant of the EPL's covering Ilomba Hill and Tambani a further800,000 new ordinary shares in the Company will be issued at 2.6p per share, aswell as a further 2,500,000 new ordinary shares in Zeus at par to Kleinebar, andup to a further C$15,000 of receipted expenditure incurred by Kleinebar inrelation to the properties will be reimbursable. The technical information in the announcement above has been reviewed by MrRobert Weicker, P.Geo., who has an Honors Degree in Earth Science from theUniversity of Waterloo, Waterloo, Canada, and is a Professional Geoscientist ofthe Association of Professional Engineers and Geoscientists of British Columbia.Mr Weicker has over 25 years experience in the mineral exploration and miningindustry. Mr. Weicker, a former Chief Geologist at the Williams mine, thelargest gold mine in Canada, is a director of several junior Canadian companies,and familiar with the regulatory and exchange requirements of the TSX-Ventureand TSE. Mr Weicker has completed and/or co-authored pre-feasibility studies,feasibility studies, assessment reports, valuation reports, 43-101 reports (bothdomestic and internationally) and technical reports and reviews for submittal tothe TSX-Venture and AIM exchanges. Since 1999, Mr. Weicker has developed his own consulting company, Kleinebar, thevendor of the properties, with a focus on Asia, Mongolia and Nevada. Mr. Weickerwill assist with the Red Rock exploration activities and resource acquisition. Mr Weicker consents to the inclusion in this announcement of the matters basedon his information in the form and context in which it appears above. Enquiries: Andrew Bell 07766 474849 Red Rock Resources plc Chairman John Simpson 020 7512 0191 ARM Corporate Finance Ltd Nominated Adviser Ron Marshman / John Greenhalgh 020 7628 5518 City of London PR Limited Public Relations This information is provided by RNS The company news service from the London Stock Exchange