Red Rock Resources and Pallinghurst end cooperation agreement for Jupiter Mines as targets achieved

Red Rock Resources (AIM: RRR) announced that its co-operation arrangements and understandings with Pallinghurst Resources (JSE: PGL) in relation to the respective shareholdings in Jupiter Mines (ASX: JMS) has come to an end. Red Rock said the cooperation had achieved its objectives now that Jupiter is well-placed to progress in the steel feed market, and therefore it would serve no further purpose.

Red Rock currently owns a just over 25% shareholding in Jupiter Mines, while Pallinghurst owns a 28.5% stake. Pallinghurst has the backing of at least US$1bn and also co-invests in specific projects with its partners which include the Korean company POSCO, the second largest steel manufacturer in the world.

In May 2008, Red Rock announced that it was acting in concert with Pallinghurst to acquire shares in Jupiter Mines. Subsequently the concert parties made a proposal to Jupiter whereby they would jointly vend in certain assets in Western Australia in two tranches in exchange for the issue of new Jupiter shares.  According to Red Rock, both parties worked together harmoniously throughout the period and they share the same strategic vision for Jupiter. As such there is no reason why this would not continue, the company said.

December was a positive month for the investee company, on the 10th Jupiter announced high grade sampling results from its Oakover manganese project in the Pilbara region of Western Australia. The results indicate significant potential for a major manganese prospect, Jupiter said. The following day, Jupiter also set an exploration target of 1.1 - 1.3 billion tones for magnetite at the Mt Ida prospect at the Yilgarn Iron project, grading from 30% to 40% iron. The target was calculated by independent geological consultants Geological Services using 3D modelling and it excluded the magnetite potential at the adjacent Mt Mason prospect.

Subsequently London-based independent research group, Growth Equities and Company Research (GECR) maintained its ‘speculative buy’ recommendation. According to the analyst, Jupiter may put together major and possibly transformative deals to expand its core steel feed business in the next few months.

When Red Rock spun-out of Regency Mines in July 2005, it brought with it three iron ore licenses on the Yilgarn Craton of Western Australia, including Mt Ida. Subsequently in 2006, the company entered into an option agreement with Jupiter mines, which was exercised in 2007.  Consequently Jupiter acquired the Mt Ida and Mt Hope properties, which neighboured its own licenses. In return Red Rock received shares, cash and royalties. Later, the former Red Rock properties were integrated into what is now referred to as the Central Yilgarn Iron Project (CYIP).

Red Rock continued to build its stake in the ASX listed company further and in May 2008, it agreed the cooperation partnership with Pallinghurst. The concert parties influenced a number of changes at Jupiter, making significant board appointments. Red Rock exchanged its Mt Alfred iron ore property and its manganese tenements at Oakover for equity. Whilst Pallinghurst also vended certain assets in return for equity and attracted further investment into Jupiter, from its Korean associate, POSCO.

http://www.proactiveinvestors.co.uk/companies/news/12917/red-rock-resources-and-pallinghurst-end-cooperation-agreement-for-jupiter-mines-as-targets-achieved-12917.html