Red Rock plummets on weak mine data

Red Rock Resources, the mining and exploration company, has released updated estimates for the amount, and type, of gold available at its El Limon mine in Colombia.

The firm admits, however, these estimates "have been completed without independent verification and without the use of modern ...methodologies."

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The current estimated total at the mine is 32,219 tonnes of "mineralised material". Red Rock says the margin for error could be as high as 10%.

Because of the way these estimates have been compiled, the numbers cannot be declared "JORC Compliant" - that is the standard by which mineral deposits are usually judged. In addition, the company cannot claim them as "resources" in its balance sheet.

In today's update Red Rock says "there can be no assurance that the predicted production can be realised."

It also says: "there is as yet limited understanding of gold grade variation within the vein".

In the next six months the plan is to try and keep El Limon going through development and "in-mine exploration".

How much this will cost is not stated but Red Rock says: "The new mine team is optimistic that the exploration and development planned over the next six months will define ore extensions to allow as much as a further 18 months of operations before production is required from below the already established Level 7."

They are certainly trying to squeeze as much production out of the facility as possible but investors are wary.

Since the open today Red Rock shares have fallen 8%. Since the beginning of this year the stock is down 78%.

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