As commodity prices take a knock, primarily because of COVID-19 and decreased demand from China, some mining companies are taking a ‘wait and see’ approach when it comes to pursuing new projects.
This is not the case for AIM-listed Red Rock Resources as it continues to advance its exploration efforts in the Democratic Republic of Congo (DRC).
Chairman ANDREW BELL tells GERARD PETER why the company is still buoyant during turbulent economic times.
Red Rock is a natural resource development company with interests in gold, manganese and minerals. Among its African interest is the 1.2m oz Migori gold project in Kenya which has been inactive for several years while a court case, now settled, was progressing, but where Red Rock is expecting to renew operations..
The company is now looking to expand its footprint in Central Africa by pursuing several interests in the DRC.
“We have already established ventures with local companies in the country. One of which is the Luanshimba project,” states Bell.
The Luanshimba project is a permis de recherches (exploration permit), held 80% by Red Rock and 20% by a local partner. The region is located in the Copperbelt in the south of the DRC, 65 km from Lubumbashi and near the Zambian border.
The tenement is situated along a disrupted anticline with highly prospective undifferentiated Roan sediments draping off a nearby basement dome, similar to some other productive copper deposits in the immediate area.
An initial programme undertaken in 2018 identified two open-ended areas strongly anomalous for copper and cobalt. In February this year, Red Rock announced that it would start with the second phase of exploration.
“We obtained very promising results from our initial exploration in a favourable geological setting, suggesting the presence of underlying copper and cobalt mineralisation,” Bell explains.
“It’s early stages and we need to get a better understanding of what we have so we need to go back and define it more precisely. We need to find out from which geological formations the mineralisation is coming from.
“And so, the second phase will include some geological mapping, pitting and trenching and geophysics in the near future. A controlled and modular programme will enable us to test hypotheses and step up activity quickly if justified.”
So far, Bell explains that the project has been self-funded but as the company progresses to more advanced stages of exploration, it will look to mobilise more money.
“We will do this by either using some of our internal resources or by raising specific funding for the project, either by taking in partners, selling some of our projects or getting funding from the market. We are lucky in having existing income sources that support our basic costs.”
DRC is not that bad
With demand for raw materials at a low, along with the DRC getting a poor investor attractiveness rating by the Fraser Institute, why is Red Rock looking to invest in the country?
Bell explains that advancing Luanshimba will put the company in a good position when the market starts to gain upward momentum again.
“At the moment, everything is in flux but it will recover and it will happen at a rapid rate. When this happens there will be new market leaders and we want to among those companies with good assets and prospects, states Bell.
Meanwhile, he says that the perception that it is difficult to conduct business in the DRC is an incorrect assumption. There are a lot of companies currently operating in the DRC that don’t have an understanding of how procedures work in a Francophone country, particularly when it comes to language capabilities.
“As in any region, once you are on the ground and speak to people, you get an understanding of how things operate in a country which had been cut off from mainstream financial markets for a long time because of political conflict.
“Now there have been a number of years of peace and the progress in the country has been remarkably rapid and the number of new mines that have opened in the country is impressive.
Read more about mining in the DRC
“It is also important that you have the right local partners. Yes, in any partnership, the expectations are different for each party but we need to manage it.
“Red Rock is in one of the world’s most prospective environments for the minerals we seek, working with skilled and experienced local partners, and approach this new phase of our activity in the DRC with considerable excitement,” he concludes.
Read more about Red Rock Resources