JOHANNESBURG (miningweekly.com) – Despite having widened its losses for the year ended June 30, Aim-listed Red Rock Resources chairperson and CEO Andrew Bell on Friday assured shareholders that the company was in an improved financial position.

Red Rock reported a post-tax loss of £1.1-million in 2017, increasing from the losses of £283 280 posted in 2016.

“This reflects an impairment of £1.5-million, essentially the same as last year's, in the value of [our] Greenland iron-ore assets, where we finally took the decision to fully impair the investment, but which was not offset this year by share sale profits or a recalculation of the fair value of a Colombian receivable,” he said.

However, the consolidated income statement for the year under review did not reflect the “substantial” improvement in the group’s financial position on most metrics.

The year under review saw Red Rock starting and building up revenues, most notably from its stake in unlisted Jupiter Mines, the co-owner and operator of the openpit Tshipi é Ntle manganese mine, in the Northern Cape, as well as dividends and gold royalties.

The development of the income stream from Jupiter distributions exceeded expectations, with current price levels unlocking a distribution of £538 740 in the Spring of 2017, with another of £250 000 due in early December.

While the expected income stream from gold royalties from Colombia had been slow to develop to the expected levels as a result of delays in the installation and commissioning of a ball mill and other factors, it is expected to begin contributing more significantly from the November 2017 quarterly payment.

“We are disappointed that we have not yet received any income from our Louisiana oil production participation at Shoat's Creek,” Bell added.

However, a new source of profit – through an equity investment in the Steelmin ferrosilicon plant in Jajce, Bosnia – is likely to start contributing from early calendar 2018.

“Should Steelmin succeed in commissioning a second furnace, then its earnings before interest, taxes, depreciation and amortisation may be running later in 2018 at an annualised level up to €10-million,” Bell commented.

Meanwhile, a reversal of £4.2-million in previous impairments at Jupiter resulted in an increase of 41.2% in total equity to £12.18-million in a year where only £300 000 of new equity was raised, after a 14.6% increase the previous year.

Equity a share, therefore, rose by 16.4% to 2.56p.

“We made clear a year ago our focus on cost control, and our desire to avoid financing through equity markets at a time [when] we expected several income streams to develop and when the company's market valuation seemed significantly to undervalue its assets,” noted Bell.