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Red Rock and Power Metal rock on, agree to extend Australian gold deal deadline

10:02, 10th June 2024
Victor Parker
Vox Newswire

Red Rock Resources (RRRFollow | RRR, an Africa and Australia-focused gold and base metals explorer, announced an extension on its conditional agreement with Power Metal Resources (POWFollow | POW, to acquire the remaining 49.9% interest in its Australian subsidiary 'Red Rock Australasia'.

Currently, Red Rock owns 50.1% of New Ballarat Gold Corporation, and Power Metal owns the remaining 49.9%. New Ballarat acts as a holding company of Red Rock Australasia, of which it owns 100%.

Under the heads of terms - subject to due diligence and funding, board approval of both parties, and shareholder approvals where necessary - Red Rock would acquire the entire interest of POW in New Ballarat, as well as the benefit of any shareholder loans of POW to New Ballarat or Red Rock Australasia, for an aggregate consideration of £1.5m in fixed and contingent payments.

Under the initial deal announced on March 13, 2024, the two parties agreed to terminate the heads of terms within 13 weeks should all conditions not be satisfied. In two separate announcements today, RRR and POW said they agreed an extension to this long stop date to June 11, 2024. A further announcement is therefore expected by June 12, 2024.


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Red Rock Resources and Power Metal Resources have agreed an extension on their deal to transfer 50.1% ownership in RRR's Australian subsidiary from POW to RRR for £1.5m in fixed and contingent payments, giving RRR full ownership in Red Rock Australasia. The extension to June 11 is a good signal that the deal is being worked on, encouraging investors of both companies and driving their respective shares c. 2% higher today.

Red Rock Australasia (RRAL) is a local operating company, holding exploration interests in the Victoria Goldfields and in South Australia. The principal assets of RRAL are 16 gold exploration licences in the State of Victoria, together with some permitted areas of State land within them, totalling 2,517 sq km, and a 560 sq km licence in South Australia.

The deal would be beneficial for RRR - which currently holds a controlling interest in RRAL - as recent drilling at Berringa has returned positive results, with potential for early production. For RRR, further development would be done more efficiently and potentially at a lower capex, if it had full ownership of its gold assets in Victoria. Should the transaction go through, it would substantially increase Red Rock's gold footprint in Australia at a time when interest in advanced gold has increased, alongside the price of gold nearing new all-time highs.

The deal would also benefit POW for whom RRAL is not a core asset. The company has been streamlining its operations and looking to divest non-core non-producing assets to strengthen its balance sheet, and fund its main portfolio and new investments. POW recently announced the acquisition of 75% of GSAe, a UK-based company specialising in the extraction of critical metals from secondary sources.

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