The sealant is for the ends of the two rubber gaskets that sit under the valley gasket and have the two steel clamp pieces on top of the valley gasket with a single bolt fixing (Which you must not overtighten)
The LR sealant is a black RTV type of silicon sealer, but we have used Hylomar on our rebuild. The reason for the sealer is that the area where the ends of the rubber gasket fit are variable in size and shape, according to tolerances on the manifold, head alignment etc etc.
Peter