better buy in the blipp guys, page-27

I think the following info has been around for a while but might help explain a few things:

A number of recent press releases from London listed mining minnow Red Rock Resources suggest that something - which we mere mortals cannot quite grasp – is bubbling below the surface.

What am I blathering on about?

Three names: Jupiter Mines, Mindax and Pallinghurst Resources.

Over the past few months, Red Rock Resources (AIM: RRR) has been building up a stake in ASX listed Jupiter Mines (ASX: JMS). Red Rock originally became a stakeholder when Jupiter exercised an option to buy two of Red Rock’s iron ore tenements in the Central Yilgarn of Western Australia, for approximately 4.6 million shares, A$250,000 in cash, and a 1.5% production royalty.

Since then, Red Rock has kept on buying shares, and with an approximate total spend of A$2.2 million, took its holding to 10.12% of the company.

Red Rock also built a 7.3% interest in Mindax Limited (ASX: MDX), which happens to hold tenements contiguous to Red Rock’s Mount Alfred tenement, also in the Central Yilgarn of Western Australia.

Enter Pallinghurst Resources - a heavyweight investment group, funded by several large backers to make investments in various parts of the natural resources sector, including those involved in the production of steel. Pallinghurst Resources is headed up by Brian Gilbertson, former CEO of BHP Billiton.

Pallinghurst Resources has built up a 10.57% interest in Jupiter Mines, which together with Red Rock’s now diluted 8.81% makes 19.38%, just below the takeover threshold.


Pallinghurs has also announced it is acting in concert with Red Rock, and has placed one of its founders, Priyank Thapliyal, formerly the right-hand man of the Chairman of Vedanta Resources, on the board of directors.

Andrew Bell, Chairman of Red Rock, has also joined the board of Jupiter.

Now that Pallinghurst and Red Rock have confirmed that they are working ‘in concert’, and with two non-executive’s on the board of Jupiter, an announcement seems likely in the not too distant future.

So what does this all mean?

Well clearly there is some sort of plan here; the problem is fathoming what will happen next. Andrew Bell has been difficult to reach recently – he seems to have been travelling to Australia a lot - but after speaking to him it became clear that our hunch - that Pallinghurst is keen to build up a large iron ore prospecting position in Australia - is not far off the mark.

What Mr. Bell would not say is how this will be achieved, but it looks likely that Jupiter and Red Rocks’ combined interests in the Central Yilgarn of Western Australia will be at the heart of any agreement or transaction.

The combined stake of Pallinghurst and Red Rock in Mindax Ltd has also risen to 9.67%, with the parties declaring that they are acting in concert and the bulk of Red Rock’s holding has been sold to Pallinghurst.

With iron ore prices continuing to rise, one has to wonder what value the tenements have – and how will this value be realised for shareholders? Perhaps a three-way Red Rock-Jupiter-Mindax merger is on the cards? Only time will tell.

All this can only help SP, particularly as MDX has held up pretty well in the recent commodities sell off.