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Migori Gold Project

  • RRR: 100% Economic Interest
  • RRR: 75% Project Interest
  • 1.2Moz gold JORC Resource
  • Kenyan Greenstone Belt
  • Exploring Partnership Opportunities

Kenya Kenya

Red Rock is exploring the Migori gold belt in Kenya. The under-explored Migori gold belt is analogous to producing Tanzanian greenstone gold belts with significant upside potential.

Investment

Red Rock holds a 75% direct interest in Mid Migori Mining Company Ltd (“MMM”) which controls a 1.2Moz JORC gold resource in Kenya via Special Prospecting Licenses 122 and 202.

In May 2015 Red Rock was granted leave to institute judicial review proceedings and a stay in relation to the purported termination of the Special Licenses covering the Migori Gold Project. On 22 October 2018 the Company announced an update in relation to the legal proceedings instituted by Red Rock and its local partner in May 2015 against the Ministry of Mining in Kenya in order to achieve the restoration of the licenses.
A Consent has been signed on behalf of the Attorney General and the Company and is being filed with the court. Under the terms of the Consent, the parties have agreed that the case be marked as withdrawn with no order as to costs, that the Applicants are at liberty to apply for licenses under section 225(6) of the Mining Act 2016, and that previous decisions will not be prejudicial to such applications. The Company welcomes this settlement and has caused the appropriate applications to be made.

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.  In February 2017 Acacia announced it had found "one of the highest grade gold projects in Africa today" in reporting its 1.31m oz resource at 12.1grams per tonne.

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

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//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.

Looking forward

Once the application for the license passes through, the Company will be able to continue the work it began at the licences earlier this decade. The work culminated with an initial 1.3 MMoz mineral resource under the JORC Code for the licences in 2012. It also found that gold recoveries of more than 90pc were achievable at a prospect called MK, while mineralisation at all prospects remains potentially open at depth and along strike of key higher-grade zones.
The next stage will focus on drilling and will involve more work on the higher-grade areas and on expanding the resource. The next stages of exploration will aim to increase the size of the resource and its grade.

Highlights

  • JORC Mineral Resource Estimates:
    • 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
  • Ongoing interpretation and desktop analysis of historic and recent results and planning for future 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