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Rogue Update: Stone Sales continue, Sold non-core Radio Hill Project, Amended Langmuir APA to clarify New Resource Timing

Press Release

  • In Q3-2022, Rogue Stone sold 4,278 tons realizing $83/ton1 with COGS of $47/ton
  • Sold non-core Radio Hill Iron Project, maintaining a back in right for gold potential
  • Amended Langmuir Asset Purchase Agreement to allow for the Updated Resource by the end of 2023

TORONTO, ON – Rogue Resources Inc. (TSX-V: RRS) (“Rogue” or the “Company”) The Company is pleased to announce operational results for Rogue Stone with 4,278 tons sold in Q3-2022, from November through January, with an average realized price per ton of $83 and Cost of Goods Sold (“COGS”) of $47/ton. This information was included in the Company’s Q3-2022 financials, for the quarter ended January 31, 2022 (available on Rogue’s website or through the SEDAR filing system). In addition, Rogue Stone has seen an increase in average realized price per ton through April, as the 2022 spring/summer demand begins to build.

“Rogue Stone has continued to see ongoing demand and sales of limestone through Q3 and Q4 but the winter was very difficult for our operations”, said Sean Samson, President and CEO of Rogue. “The volume of stone we had available to sell in Q3 and continuing into Q4 was negatively impacted by the extended cold weather and ongoing impact of COVID 19, with large parts of the team exposed and quarantining. This past month we’ve seen a very encouraging rise in our average revenue per ton and we are beginning to see the benefit of the higher value guillotine products. We anticipate increased sales volumes through the spring and summer with the return of warmer temperatures and the re-opening of the Shadow Lake Quarry after the lifting of the spring load restrictions on the access road. Rogue Stone continues to work collaboratively with our customers, restocking their stone yards and providing them with high quality limestone products.”

Rogue Stone Results by Quarter:

Period Tons Average Realized Revenue Average Cost of Goods
per ton sold (“COGS”) per ton sold
Q3-2021 (Nov 2020 – Jan 2021) 6,914 $70 $37
Q4-2021 (Feb – April) 5,398 $80 $48
Q1-2022 (May – July) 6,547 $88 $40
Q2-2022 (Aug – Oct) 5,431 $81 $42
Q3-2022 (Nov 2021 – Jan 2022) 4,278 $83 $47

Preliminary Results for the Current Quarter2:

Period Tons Average Realized Revenue Average Cost of Goods
per ton sold (“COGS”) per ton sold
February 535 $66
March 1,464 $84
April 1,508 $105
Q4-2022 (Feb– April) 3,507 $90 TBD Q4-2022 Financials

As part of the ongoing inflation impact across industry, Rogue Stone has felt cost pressure, primarily on fuel cost and labour. Price increases were implemented for this year across all products, in addition to a special fuel surcharge added on loads. These increases have been accepted by customers and the Company does not see a negative impact on demand.

Sale of the Non-Core Radio Hill Property

The Company has now sold its ownership and rights in the non-core Radio Hill project located west of Timmins, Ontario to Canada Nickel Company Inc. (TSX-V: CNC) (“CNC”), a publicly traded company incorporated under the laws of Ontario.

The asset purchase agreement between Rogue and CNC outlined the following:

  • Rogue was paid $75,000 in cash and will receive 50,000 shares of CNC upon TSX-V approval;
  • Rogue maintains a 0.5% net smelter returns royalty on iron produced from the property;
  • If gold is discovered, Rogue maintains a right to form a 50:50 joint venture with CNC for its development.

“This is a good deal for Rogue, realizing some value from a non-core asset”, explained Sean Samson. “We felt the true value in Radio Hill was for the gold exploration potential and this transaction allows us to preserve 50% of that potential.”

Amended Langmuir Asset Purchase Agreement to allow for more Drilling towards a Resource

In 2021 Rogue sold its non-core Langmuir Nickel Project located south of Timmins, Ontario to EV Nickel Inc. (TSX-V: EVNI) (“EVNi”). In addition to the upfront consideration paid, a future payment will be received by the Company based on the size of an updated new mineral resource estimate (the “New Resource Payment”), which had been expected to be completed by EVNi in 2022. This payment will be up to a maximum of $5,000,000 paid in cash, EVNi shares, or a combination thereof to be determined by EVNi (for further detail see the March 26, 2021 news release).

Rogue has now amended the Langmuir Asset Purchase Agreement, granting until the end of 2023 for EVNi to complete an updated mineral resource estimate. The extension was granted to allow for additional drilling across the Langmuir property, including on the W4 deposit which has an historic resource already and is currently completing metallurgical test work to be fully incorporated into any updated resource.

In exchange for this amendment, EVNI has agreed to provide Rogue with access to an advance on the New Resource Payment, up to $200,000. If Rogue chooses to draw from this advance it will carry an interest rate of 6%.

Update on Silicon Ridge Litigation

As part of Rogue’s plan to explore all legal options open to it and attempt to protect the Company and secure fair compensation, Rogue has engaged in discussions with legal contractors on potential litigation related to the decision by the Ministère des Forêts, de la Faune et des Parcs (“MFFP”) to reject Rogue’s Section 128.7 Authorization application (see press release dated April 1, 2021).

Investment decisions were made by the Company given the encouragement by the Government of Québec to continue investing, with the shared and constant goal of creating good paying jobs in Québec. This encouragement included direc support from the MFFP, which provided continued approvals and encouragement, leading Rogue to continue investing in and developing the Silicon Ridge project. Rogue remained consistent and reacted positively to continued support and signoffs along the way. Similarly, Rogue had been consistent in stressing that if a permit was not issued, it would expect fair compensation. Rogue invested more than $5M into the Silicon Ridge Project and the Project has been valued at almost 5x that amount by an independent study performed by Québec based engineers and geologists. All of this spending has been audited, can be demonstrated and explained, and most importantly was spent based on stage-gated approvals by the MFFP as we progressed.

About Rogue Resources Inc.

Rogue is a mining company focused on generating positive cash flow. Not tied to any commodity, it looks at rock value and quality deposits that can withstand all stages of the commodity price cycle. The Company includes Rogue Stone selling quarried limestone for landscape applications from two operating quarries in Ontario; Rogue Quartz focused on advancing its silica/quartz business with the Snow White Project in Ontario and the Silicon Ridge Project in Québec; Rogue Timmins with the gold potential at Radio Hill and an ownership position in EV Nickel (TSXV: EVNI), exploring in the Shaw Dome.

Qualified Person

The Company’s Projects are under the direct technical supervision of Paul Davis, P.Geo., and Vice-President of the Company. Mr. Davis is a Qualified Person as defined by NI 43-101. He has reviewed and approved the technical information in this press release. There are no known factors that could materially affect the reliability of the information verified by Mr. Davis.

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