Red Rock Resources: Update Q&A with Andrew Bell

Red Rock Resources (LON:RRR) updated the market on Tuesday with news on progress across their operations and investments.

Executive Chairman Andrew Bell took time to answer some investor focused questions for MiningMaven. Here's what he had to say: 

COLOMBIA

MM:Notwithstanding the customs and transportation delays affecting a small number of parts, do you remain confident that production can be scaled up in Colombia and, to assist our readers, can you re-confirm your likely production scalability for (say) the next year?

AB:It was annoying that we had a delay affecting a small number of parts, as this affects the speed of the production ramp-up. We were told by a local supplier before Christmas that he had some parts he was to supply sitting in his yard in Medellin. It wasn't true; a few were being imported and had not arrived in the country.  This isn't satisfactory of course, and it is not something easy to detect, but it is a minor irritation causing a minor delay. We were able to get hold of an experienced gold plant engineer from the U.S. this month to go out and 'audit' the plant and the mine for us; his conclusions were that both were satisfactory, and that he concurs with the view that they will be capable of producing 150 tpd once smoothly operating. In terms of grade, we are producing material from El Limon at 12 g/t plus, which at this stage is satisfactory. So the big picture is that all is on track, which is a great relief. In our nightmares, there would be a fatal flaw somewhere in the mine, somewhere in the plant, or grade would turn out to have been completely misstated. Such things happen: happily, not to us.

As to increasing capacity later in the year, this is still the objective, and we will start work on that soon.  

MM:Are you satisfied with the gold grades achieved to date and are you confident that higher grade material can be processed going forward?

AB:We believe that higher grades than 12 g/t will be attainable, based on historic production. The material from the second mine, Machuca, is lower grade currently at 6 g/t, but this is maiden production and no drill exploration has been carried out, so Mineras Four Points is flying blind at the moment. We will inject a more systematic exploration approach over time.  

MM:Have you been able to implement any initial improvements to efficiency following the Consulting Engineer's findings and what measures do you anticipate putting in place going forward?

AB:Initially we will be looking at improving the tailings handling, and installing a second pump on the jig discharge for back-up, and a few tweaks that have been pointed out. We will be putting in some improvements in the flow sheet and listing of parts, as tools for management. No doubt we will move on to studying productivity improvements.

MM:Please outline the significance of your new Chief Financial Officer role and the associated finance function you are strengthening locally?

AB:Financial control – and control of the physical gold – are key for us. With these in place, we can leave a lot of operational flexibility to local management. Beyond control, we also want good budgeting, and we will be producing local and IFRS audited accounts for Mineras Four Points for the first time, so we need good clean accounts and a good understanding of accounting and audit issues. So the CFO role in Colombia was a key hire, and Manoli and I personally interviewed and picked the man to fill that post.   

MM:Why do you feel now is the appropriate time to exercise your option to secure a majority stake holding in Colombia?

AB:We are getting involved in detailed operational matters now, and yet we are not shareholders. That is anomalous. Also, we have de-risked MFP, and we always intended to exercise once we had done that. To get more involved in project and operating management, which we know we need to do if we want to have efficiency and foreseeability, we need to have majority control.  

MM:Can you outline how you intend to approach the maintenance of social and community support around the Colombian operations, and the environmental impact thereof, as production  ramps up?

AB:On environmental issues we will consult experts. Our partners are well established in the local community, and will take the lead, we expect, in continuing our positive interactions with all levels of Government and community.

TASMANIA

MM:Noting the results received, what now for Arthur River?

AB:We do not expect to conduct any further work in the next year.

KENYA

MM:Please could you summarise the agreed drilling programme that you have now commenced and briefly outline what you are looking to achieve from this programme?

AB:I do not think we can add much to recent announcements. Most of our staff who have been on assignment since early January there are coming back for leave over the next weeks – we have a rotation system – and we will be sitting down with them as they come through and debriefing and reviewing progress. That will be the time to say more. We are speeding up the pace of activity and will accomplish a lot of drilling between now and the end of the dry season.

Kenya is not an established country for either mining or exploration, but after much effort we now have a smoothly running and highly professional operation there, unequalled we think in Kenya, and this year's drilling and exploration programmes are a key step forward.    

ENDS