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Red Rock Resources sells Colombian mine royalty, shares jump
(Sharecast News) - Shares in Red Rock Resources surged on Friday after the miner sold its royalty at the El Limon gold mine in Colombia for £1m. The company said it was selling its gold royalty over product of El Limon mine and mill back to the mine's owner Soma Gold Corp. The deal included an additional consideration of 200,000 Soma share subscription rights at C$2 per share.
Red Rock has held the royalty since 2015, but it has not yielded payments for several years, the company said.
"The sale of the royalty back to the mine owner gives Red Rock cash to extinguish liabilities and support working capital," said Red Rock's chair Andrew Bell.
"We believe that the price of c USD1,350,000 plus warrants is a fair one, giving the mine owner a discount to the £1,500,000 at which the asset is carried in our books but accelerating the payment to us and removing our exposure to performance risk of the gold assets concerned."
Shares were up 15% at 0.034p by 1011 BST.
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