Red Rock Resources given 1.6p price target by First Equity

London-based broker, First Equity, has analysed each of Red Rock Resources‘ (RRR) (LON:RRR) investments and projects, calculating a sum-of-the-parts valuation and a share price target.

First Equity has calculated a total sum of the parts value of £19.5m, which is significantly more than Red Rock’s current market cap (£7.3m), equating to 1.60p per share.

The broker argues that the market has not priced in the very near-term potential of Red Rock Australasia (RRAL) and Elephant Oil attaining a market listing within the next few months and realisable asset value which would then be added to the balance sheet, a figure that is very likely to surpass Red Rock’s current market cap.

First Equity estimates the probability of RRAL and Elephant Oil listing on a recognised stock market within the next 6-months is 70% and 80% respectively.

Along with these IPO valuation catalysts, investors can benefit from further exploration news and developments on the Mikei gold and Luanshimba copper-cobalt projects, where active exploration campaigns are in motion, the broker said in a research note.

On the Mikei Gold Project in Kenya, an initial 2,000-metre drill programme is underway. The results from this could help improve the JORC resource of 723,000 ounces at 1.49 g/t, which forms the basis for First Equity’s project-based valuation estimate.

• The greatest potential enhancement to project value in the next 12-months could come from the battery metals focused Luanshimba copper-cobalt DRC project, where a 2,000-metre drill programme is in progress.
• The entrepreneurial culture at Red Rock has resulted in the creation of RRAL and its progression to IPO since 2020. The company currently aims to create two significant listable JVs in other major gold provinces, thereby creating further potential upside.

RRR is an AIM-listed mining company which manages a diverse and international portfolio of projects and investments and seeks to add value through development throughout all phases of the commodity cycle across both the mining and minerals and oil and gas sectors.