Aim-listed Red Rock Resources (RRR) has entered into a conditional agreement with private Isle of Man company Cobalt Blue to acquire an interest in a new joint venture company (JVCo) that will be established for the exploitation of four copper/cobalt tailings properties near Kolwezi, in the Democratic Republic of the Congo (DRC).
JVCo will hold the rights to exploit the Kamirombe 1 and 2, Haute Kalumba and Basse Kalumba tailings properties.
RRR will have 40 days to conclude a due diligence and, if it decides to proceed with the transaction, it will acquire a 26.25% interest in JVCo for $700 000 in cash and £490 000 in shares. It will also fund $1.2-million of exploration expenditure over 18 months to produce a bankable feasibility study (BFS) at the Kamirombe properties.
Following completion of the BFS, RRR will have six months within which to elect to pay $1-million to farm-in to a further 26.25% of JVCo.
“The old, rich copper/cobalt mines on the Congolese part of the Copperbelt have been producing for many decades, and some of the tailings are known to be attractive targets at today’s prices and with today’s technology.
“The electric car revolution is expected to have transformative impacts on battery technology and the metal demand pattern. We expect copper to be a beneficiary, but the long term impact on cobalt demand is likely to be stronger,” RRR chairperson Andrew Bell commented on Tuesday.
He added that this opportunity could potentially add significant value for RRR.
“From a technical point of view, this is a potentially low-risk and high cash flow project, and we expect to have geologists on site conducting testwork within days,” he said.