Red Rock Resources Is Looking To Act As An Iron Ore Consolidator In The Yilgarn District Of Western Australia
By Alastair Ford
On the desk at the reception as you walk into Andrew Bell’s offices, just opposite the new Rio Tinto building, is a dealer’s note for the acquisition of some Mindax shares. The offices are in a small unassuming muse tucked away behind Paddington station, and it’s only because the two-storey building is modestly distinguished with metallic nameplates that read ‘Greatland Gold’, ‘Regency Mines’, and ‘Red Rock Resources’ that you’d know from the outside that the whole setup isn’t the base for some aging dowager who hasn’t cleaned her net curtains for a while. You get the feeling Mr Bell has been in situ a whole lot longer than Rio Tinto. Whether he’ll outlast Rio is another matter.
One thing’s for sure, though. The small size of his companies means he can be a lot more fleet of foot when it comes to deal-making. The Mindax shares represent just the tip of the iceberg. Under the Red Rock banner Mr Bell is making all sorts of moves down in Australia to act as consolidator in manganese and especially in iron. It’s a big undertaking for a company that’s only capitalised – and not even in Australia – at just under £5.5 million.
But Mr Bell knows a thing or two about how to work markets. With Portman’s Koolyanobbing as his model, he’s hoping to stimulate a bit of corporate activity in Wetsern Australia’s Yilgarn area. The reason is that, in tune with the times, Mr Bell reckons that there’s too much small-time activity going on in the area, and that what’s needed is scale. Red Rock has its own ground in the district, of course. Three properties, Mount Alfred, Mount Ida, and Mount Hope, constitute a combined ground holding of over 200 square kilometres. Red Rock is already in partnership with Australian-listed Jupiter mines, in which it also holds an eight per cent stake. Mindax is another neighbour, and Red Rock holds eight per cent in that company too. Other local small-time operators include Iron Mountain Mining, Polaris Metals and Hawthorn Resources.
It’s not rocket science to work out the plan, but Mr Bell spells it out anyhow: “Our neighbours are too small. We are trying to act as a catalyst. If you get four or five of these companies together you’d also get Chinese interest.” It’s the old China story again, and no one can deny it’s worked pretty well in the past.
So what’s on offer? Well Jupiter has 2.2 million tonnes in the inferred category, but apart from that there’s not much for the Joint Ore Reserves Committee to get its teeth into. According to Mr Bell, the thinking at Mindax is that the company is sitting on 75 million tonnes of high grade haematite. But funding has been tight, so progress to date has been slow. This year things should get moving though, as the iron ore price continues to stimulate activity, Mr Bell injects a bit of cash here and there, and drilling starts to bring in some hard numbers. Whether Red Rock ultimately gobbles or gets gobbled up by one of its neighbours, or by a third party, only time will tell. But what with the stakebuilding that’s already been achieved, Mr Bell will certainly have some say as to the outcome.
In the meantime there’s also the manganese property to work up at Oakover, where the company has 695 square kilometres of ground, forty kilometres north of Consolidated Minerals’ Woodie Woodie mine. According to Mr Bell, the recent bidding war for Consolidated Minerals “shows you what people think of manganese”. Some say the eventual buyer overpaid, but the counter view is that the losing bidders were ultimately outclassed. Either way there’s plenty of demand for manganese, as the recent arrival of Spitfire Resources onto the scene has also demonstrated. Early shows at Oakover are good, although, as with the iron properties there’s much work to be done yet.