Red Rock, which has an interest in the local operation through a 15 per cent stake in Mid Migori Mining Company Ltd (MMM), did not say why the Ministry of Mining had cancelled the company’s licence.
The parties have, however, agreed to settle the matter in what paves the way for the multinational to make a new licence application.
London-based Red Rock Resources is set to resume production of gold estimated at more than Sh100 billion in Migori after settling a court case with the government which had terminated its mining licence in May 2015.
Red Rock, which has an interest in the local operation through a 15 per cent stake in Mid Migori Mining Company Ltd (MMM), did not say why the Ministry of Mining had cancelled the company’s licence.
The parties have, however, agreed to settle the matter in what paves the way for the multinational to make a new licence application.
A consent has been signed on behalf of the Attorney General and the company and is being filed with the court, the multinational said in a statement on Tuesday, adding that the parties have agreed that the case be marked as withdrawn with no order as to costs.
As part of the deal, Red Rock will also be at liberty to apply for licences under Section 225(6) of the Mining Act 2016 and that previous decisions will not be prejudicial to such applications.
"This settlement we hope will open the way to renewed progress towards our aim, which is to have a producing gold mine. Our desire, and that of the authorities and local communities, is to see work towards this recommence without delay,” Andrew Bell, the chairman of Red Rock, said.
“We shall make further announcements as the applications progress,” he added.
The company’s licences that were cancelled, SPL122 and SPL202, were issued under the former Mining Act. The multinational wants to resume exploration and production of gold in the Migori belt area covering 243 square kilometres.
Red Rock is expected to raise its stake in its local associate MMM, currently majority owned by Kansai Mining Corporation, to 75 per cent following the settlement with the government.
The UK firm will surrender all its unspecified interest in Kansai which it will also pay a total of £50,000 (Sh6.6 million) as part of the transaction. Kansai will retain a 25 per cent interest in MMM.
As part of the deal, Kansai allowed Red Rock to fund and direct the lawsuit that has now been settled.
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