Red Rock Resources Plc., a London-based gold-exploration and mining company, dismissed a Kenyan parliament recommendation that a license held by a subsidiary in the East African country be canceled.
The Daily Nation, a Nairobi-based newspaper, reported earlier today that lawmakers recommended Mid Migori Mining Co.’s permit be withdrawn after it failed to meet the requirements for an exclusive mining license. David Mugonyi, a spokesman for parliament, wasn’t immediately available for comment when Bloomberg called him five times today.
“The recommendation of the adopted report is to investigate certain matters with a view to possible revocation of one of the two licenses,” Red Rock Chief Executive Officer Andrew Bell said in a phone interview today from London. “It is however implied elsewhere in the report that if we can satisfy the investigation we are in the clear.”
Red Rock said in October it would increase its stake in Mid Migori Mining, a closely held Kenyan company, to 75 percent from 15 percent by financing a feasibility study for a gold mine. The London-based company acquired the stake in Mid Migori in 2009. Since then, the company has invested more than $10 million in the project, situated 264 kilometers (164 miles) west of Nairobi.
The Daily Nation said lawmakers called for the withdrawal of Mid Migori’s license because it had explored for gold for more than 20 years with “no results to show.”
“There has been very effective exploration by Mid Migori,” Bell said. Red Rock will “move forward rapidly with the development” of its project in western Kenya, he said.
Red Rock expects “large-scale” production at the site to start by 2016 and initial findings indicate the mine may produce as much as 50,000 ounces in the first three to four years, Bell said in October.
Shares in Red Rock snapped three days of decline and rose 3.4 percent to 1.08 pounds by 12:24 p.m. in London.