Red Rock Resources Jupiter Mines Tshipi RRR JMS

Red Rock Resources (RRR.L) has provided an updated on the estimated cash flows it will receive from the dividends payable by Jupiter Mines (ASX:JMS), an Australian company in which Red Rock has a 0.95% stake. Jupiter owns 49.9% of the Tshipi Manganese mine in South Africa, which has been printing money in the past few years thanks to the high manganese price and the low operating costs of just over US$2 per tonne. Tshipi is now expected to pay A$116M in dividends to its main shareholders, and Jupiter Mines can look forward to an A$58M cheque.

Jupiter usually distributes 70% of its own income to its shareholders, but Red Rock seems to indicate the payout ratio will be higher this year. The total dividend attributable to Red Rock will also depend on Jupiter’s expected overhead expenses, but if it would use a payout ratio of 75% on A$55M, Red Rock can look forward to an attributable dividend of around A$525,000, which is the equivalent of 290,000 GBP at the current exchange rate. Considering Red Rock’s current market cap is just 3.5M GBP, the incoming cash will make a difference as it will help fund Red Rock’s other activities.

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The author has no position in either Red Rock Resources or Jupiter Mines. Please read the disclaimer

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