Red Rock Resources (LON:RRR) is somewhat unique amongst value plays. It owns a number of enticing key assets and projects, any one of which could in its own right be a company maker, with arguably enough firepower to blow away the current market cap. Most who follow the company will already know this. For those as yet unfamiliar with Red Rock's extraordinary story, here are someuseful links which bring you up to speed. The potential value of Red Rock's investments is a regular source of investor speculation; there's the 83m or so shares in Jupiter Mines (ASX:JMS), currently worth around 80% of the company's market capitalisation. Then there's the gold project at Migori in Kenya, with its existing 1.2million ounce JORC resource and where the Company could end up with up to a 72% economic interest. And then there's the Columbian gold venture with MFP (Meneras Four Points) which, by the end of 2010, could see Red Rock acquiring a 51% stake in a high grade mining operation producing as much as 50,000 ounces per annum. And of course let us not forget the Company's ASX & TSX listed uranium interests which, if recent revelations in the sector are anything to go by, may themselves be on the cusp of a resurgence of investor interest.
But to paraphrase games show host Chris Tarrant – "we don't want to talk about all that!". We want to talk about another intriguing nugget within the portfolio. One which until last week was modestly hiding its light under a bushel. Namely, the Company's 1.5% GPR (Gross Production Royalty) rights over production at Jupiter Mines Mt Ida Iron Ore prospect.
Here's the story. Back in 2006 the newly listed Red Rock Resources granted Jupiter Mines (ASX:JMS) a 12 month option over its Mt Ida & Mt Hope iron ore licenses. In May 2007, having spent the required $250k on exploration, Jupiter exercised its option and in part consideration also agreed to a 1.5% GPR (with no deductions and no buy outs).
It's not unusual for these license transfer deals to include a Royalty element, but with early stage projects like Mt Ida its seen more as a sweetener "just in case it comes good", rather than any kind of dependable source of future revenue. Given the nature of the exploration business, the odds…
