Red Rock Resources set to adopt new strategy

RED Rock Resources Plc, the natural resource exploration and development company with interests in several minerals in Zimbabwe which began exporting lithium ore in November last year, aims to sell the product before arrival at port instead of the current arrangement of sale upon arrival in the destination port.

By doing so, that will shorten its payment cycle and reduce working capital requirements.

In its Annual Report and Accounts 2023 released late December, the firm noted that it started exporting on a modest scale, with 200 tonnes of ore.

The entity is an exploration company boasting gold exploration projects in Kenya, West Africa and Australia, copper/cobalt exploration in Congo, and lithium exploration in Zimbabwe.

“We have secured a lithium mining license and have a stockpile of material in Zimbabwe, and made our first exports during Q4 2023.

“Sales of initial exports will occur upon arrival in the destination port, and further announcements will be made as these occur,” the chairman, Mr Andrew Bell noted.

“We are currently funding our product pipeline from mine to bonded warehouse in the destination port. The working capital requirement of funding a 2-3-month pipeline before getting paid for the product means that we are starting on a modest scale, with 200 tonnes of ore.

Copper

“Once we have established that the pipeline is working efficiently and that customers trust our product, we shall aim to sell product before arrival at port and so shorten our payment cycle and reduce our working capital requirements.

“Potentially significant volumes can be exported and sold by us, but by the second quarter we will have a better idea of how this business is likely to develop, with continuing developments in Government thinking likely to require a flexible and creative approach, but also possibly offering new opportunities for the nimble.”

Mr Bell said the firm expects to generate cash from sales of assets and from court and arbitration awards over the next few months. However, we are now in a position to start selling product, initially from Zimbabwe lithium and a key task is to ensure that this item increases during the current year of account to the point where our sales and profits expectations provide tangible support for our value.

It noted that additional license areas have also been granted.

With the onset of the rainy season, the firm said it will avoid extensive civil works in muddy and rainy conditions.

“Until the rainy season ends in Zimbabwe, our plan is to continue to export from stockpile and avoid extensive civil works in muddy and rainy conditions.

Mr Bell said after careful analysis, the mining entity will not construct a flotation plant at this time.

A lithium flotation plant is a facility that uses the froth flotation process to extract lithium from spodumene, a mineral that contains lithium.

The process involves crushing the ore, grinding it into a fine powder, and then using chemicals to separate the spodumene from other minerals. The spodumene concentrate is then suitable for downstream operations such as hydro-metallurgical processing.

Zimbabwe holds some of the world’s largest reserves of hard-rock lithium, a vital mineral used in the production of clean energy technologies.

Several lithium projects are currently at various levels of implementation across the country, a positive trajectory inspired mainly by the bullish global lithium prices.-chronicleo.zw