Kenya

Red Rock is exploring the Migori gold belt in Kenya. The under-explored Migori gold belt is analogous to producing Tanzanian gold belts, thus has significant resource potential.

Highlights

- JORC Mineral Resource Estimates completed:

  • Mikei Shear Zone - 1.2Moz Au @ 1.3g/t
  • Macalder Tailings - 68koz Au @ 1.7g/t
  • Resources at early feasibility stage
  • Significant resource expansion potential 

- Key Technical and Economic studies completed for the Nyanza hard rock and Macalder tailings gold deposits

  • Approximate free cash flow of US$6M per annum during Macalder production
  • Capital cost of US$3 million recoverable within first 6 months of Nyanza operation

- Ongoing interpretation of historic and recent results and planning for advanced exploration:

  • The 7km long Mikei shear has upside potential between known zones
  • Significant resource expansion potential for both gold and base metals
  • 12 new regional targets identified and 15 existing targets have been re-prioritized

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Assets

  • Migori Project

Investment

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Red Rock holds a 15% direct interest in Mid Migori Mining Company Ltd (“MMM”) and 33.02% indirectly through its 37.96% investment in Kansai Mining Corporation Ltd. MMM is the holder of SPL122 and SPL202. Upon completion of a Bankable Feasibility Study (“BFS”), Red Rock will be entitled to a 60% direct interest, bringing its total to over 75%.  On the 27th of May Red Rock announced that the licences SPL122 and SPL202 had been terminated by the Ministry of Mines. However the company has obtained from the High Court in Kenya Orders granting it and MMM leave to institute judicial review proceedings for orders of Certiorari, Prohibition and Mandamus, and ordering meanwhile a stay on the implementation of the Ministry's decision.

Location

Special Prospecting Licences (“SPL”) 122 and 202 which cover an area of 310km² are located in the SW corner of Kenya, approximately 290km west of the capital Nairobi. The project tenements lie within the Migori and Narok Counties, extending approximately 63km from Lake Victoria in the west and parallel to the Kenya/Tanzania border which lies 10km to the south. Acacia Mining’s North Mara gold operations are located 30km SE in Tanzania.

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Geology

The Migori Greenstone belt (MGB) forms part of the Nyanzian supergroup, itself part of the northern extension of the gold-enriched Archaean Tanzanian craton. The granite-greenstone terrain to the south of the MGB is host to world class producing gold mines (e.g. North Mara 3Moz Au, Geita 30Moz Au).

The Tanzanian craton is of a similar age to other significant orogenic gold belts such as the Yilgarn in Australia and the Lake Superior province in Canada.  The mineralisation and stratigraphy of the MGB is similar to that of the Lake Victoria Greenstone belts in Tanzania and other Archaean greenstone deposits such as Red Lake in Canada (2.6Moz Au).

Gold enrichment within the MGB is predominantly found in and around shear zones associated with quartz-carbonate veining and significant alteration, as well as banded iron formations (BIFs) and poly-metallic Volcanogenic Massive Sulphides (VMS). The dominant lithologies are felsic and mafic intrusive, BIFs and metasediments of the Nyanzian system, overlain by younger Kavirondian volcaniclastic sediments and intruded by younger granitic intrusions.

The Migori Project possesses approximately 310km² of prospective greenstone geology, extending 63km along strike. The belt has a rich history of colonial and artisanal mining, with Goldplat Kilimapesa (Kenya’s only operating gold mine) located east of the Migori licences. 

Exploration History

Exploration in the project area began in the early 1930’s and culminated in the identification and subsequent mining of the Macalder VMS. In addition to this, several historical operators identified lode gold prospects which lead to the first MRE publication in 2006.

In 2010, Red Rock began the extensive task of GIS file organisation, data digestion and compilation of available historic data, prior to commencing detailed field-based exploration including infill and scout drilling.

Projects

Mikei Resource

The Mikei Resource totals 1.2Moz at JORC Indicated and Inferred status over five areas within the Mikei Shear zone. 

Summary of CSA Reported Mineral Resource Estimate Statement (JORC-compliant @ 0.5 g/t Au cut-off) 

  Inferred Indicated Total
  mt g/t Au mt g/t Au mt g/t Au Metal MOz
KKM 1.4 1.15 16.3 1.00 17.8 1.01 0.58
KKM-West 3.0 1.02 1.1 1.07 4.2 1.04 0.14
Nyanza

1.2

1.70 1.2 3.73 2.3 2.72 0.20
Gori Maria 3.8 1.16 0 0 3.8 1.16 0.14
MK 0.6 1.76 0.8 4.05 1.4 3.07 0.13
Total 10.0 1.21 19.4 1.29 29.4 1.26 1.19

NB. Apparent errors may occur due to rounding

Preliminary pit optimisations targeting areas of shallow, high grade mineralisation to determine the potential for economic development and ongoing resource expansion were completed recently. Nyanza and Mikei prospects show the best potential as starter pits due to lower metal price sensitivity and favourable conversion from Mineral Resources to diluted pit shell metal inventories.

In 2014, Red Rock commissioned a preliminary technical and economic assessment constituting the first stage of a feasibility study, concluding the viability of the 200koz Au deposit as a standalone open pit operation for generating short term cash flow utilising a modular gravity plant. The outcome of the study is summarised as follows;

  • Projected life of mine revenue from gold sales of US$95 million (at US$1,200/oz Au price)
  • Capital cost of US$3 million recoverable within first 6 months of operation
  • Production of approximately 80,000oz of gold over 9 years mine life
  • This option gives a pre-tax NPV (at 10% discount rate) of $8 million

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Pit shells per year mined at one of the Migori key prospects

Migori regional exploration

Regional exploration remains a key component of Red Rock’s activities in Kenya with the objective of identifying new potentially economic targets and expanding the existing resource base.  

Geophysics, traversing and geological mapping, grab sampling, trenching, aircore drilling and scout diamond drilling have been applied with success across large parts of the Migori licences, encountering intersections up to 12.9m @ 3.72g/t Au and generating 12 new regional exploration targets for further investigation.

Macalder Tailings Resource

The Macalder VMS deposit was discovered in the mid-1930s and mined for copper and gold till mid-1970s. The tailings produced during that period have been demonstrated by Red Rock to contain potentially economic levels of residual gold mineralisation amenable to cyanide leach extraction. A JORC Measured Mineral Resource Estimate has since been completed. 

JORC Measured Resource Estimate
Prospect JORC Classification mt kOz Au g/t Au Cut-off g/t Au
Macalder Tailings Measured 1.3 68 1.65 No Cut-Off

 

A recent scoping study investigated two base case scenarios (new vs used plant equipment) alongside a DCF analysis, examination of previous metallurgical test work and assessment of community and environmental factors. An early Mining Licence Application ("MLA) for processing the tailings has since been submitted to the Kenya government authorities.

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Looking Forward

The next phases of exploration will focus on:

- Mikei Resource

  • Expansion of resource base through further drilling along strike and at depth where the resources remain open
  • Infill drilling to upgrade current Mineral Resource to Mineral Reserves
  • Completing second phase of the Feasibility Study and follow up metallurgical test works

Macalder Tailings

  • Small scale mine planning and construction investigations
  • Advanced metallurgical tests
  • Environmental Impact Assessment

- Migori Regional Exploration

Anomaly Testing

  • Drilling and/or trenching at priority regional targets defined by geochemical and geophysical anomalies

Grassroots Zones and New Target Generation

  • Continued traversing, mapping and surface sampling at early stage prospects and untested zones
  • Assessment of the base metal potential of the licences