Red Rock Resources (RRR ), the Africa and Australia-focused gold and base metals explorer, announced a funding agreement with Diversified Metals Holdings, a US-based institutional investor, to raise up to US$1.5m.
Red Rock will initially raise US$500k by way of a subscription by Diversified Metals for new shares to an ascribed value of US$548k.
Following this initial subscription, Diversified Metals may make an additional advance of US$1m by way of a further subscription within the next 18 months.
The subscription shares will initially be priced at £0.007/share, representing an 80% premium to Red Rock's closing price on 13 December. Potential future funding will be tied to market-related prices.
Red Rock said it will use the proceeds from the initial US$500k subscription to fund ongoing exploration and meet current working capital requirements.
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Today's announced funding comes to Red Rock at an important time as the company awaits the signing of an arbitral award in the Democratic Republic of Congo where it seeks US$7.5m due to be paid by the buyer of certain assets partially owned by Red Rock.
A separate judgement for $2.5m owed to Red Rock by its former partner is yet to be enforced. Investors should stay tuned to future announcements regarding timing and amounts related to these legal proceedings. In the meantime, up to US$1.5m from Diversified Metals will keep the company funded into 2023.
While the initial subscription shares will be priced at £0.007, an 80% premium to Red Rock's last closing price, the agreement puts in place a mechanism for future funding of Red Rock at market-related prices, incentivising Diversified Metals to increase its investment in the future.
Separately, Red Rock announced yesterday that drilling had commenced at its Berringa Gold Mine near Ballarat in the Victoria Goldfields of Australia. Red Rock acquired Berringa on 22 September 2022 and plans for 1000 meters of diamond drilling across 5 drill holes into 3 priority targets to test for the extension of previously mined gold mineralisation.
Historical production of high-grade gold at Berringa has amounted to 293,250 ounces at 8.3 g/t and Red Rock believes there is a considerable endowment remaining. Investors should stay tuned to first assay results, expected in early 2023.
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