Migori gold explorer raises Sh40 million

Red Rock Resources, a UK firm prospecting for gold in Migori, has raised Sh40 million that it intends to use to pay some of its debt.

Red Rock raised the money through a private placement share sale to YA Global Master SPV.

The 2014 annual report shows that Red Rock had two debt facilities with YA Global Master SPV as at June this year consisting of a £321,850 (Sh45.63 million) loan on which it is paying a nine per cent annual interest rate and a £259,324 (Sh36.74 million) loan, which carries a 10 per cent interest rate.

Red Rock chairman Andrew Bell said that the miner raised the cash to avoid financing itself through heavy levels of debt.

“Placing the company on a firm financial footing to enable active exploration in 2015 has been a key goal of the company over the past year. Reducing short-term debt to comfortable levels and continuing to explore innovative ways to finance the business during an extended sector downturn remains key to developing shareholder value going forward,” said Mr Bell in a statement.

The mining firm plans to carry out more feasibility studies on its Migori mines, giving it data needed to do more work. Mining firms have been raising cash since the beginning of the year to finance exploration.

The Economic Survey 2014 shows that Kenya earned Sh7.4 billion in 2013 from gold exports.