Acquisition

RNS Number : 4462V

Obtala Resources PLC

29 May 2008

 



Embargo for 7.00am on 29 May 2008

OBTALA RESOURCES PLC ('Obtala' or the 'Company')

Acquisition of Gemstone Mining Licences

Obtala Resources Plc (OBT: AIM) today announced the acquisition of six 1km2 (totalling 6 km2) new gemstone mining licences in Manyara area of Tanzania, adjacent to Lake Manyara. The licences have been granted for gemstones. The licences are valid for an initial period of 10 years and confer the holder the right to prospect for and mine gemstones. Furthermore, all these licences can be extended for an additional 10 years.

Information on the Licences

Gemstone Licence Number	Holding held by the Company	Local Partner and Minority Shareholder	Licence Expiry Date
201/2005	75%	Sumayi Investment International Ltd	10 February 2015
198/2005	75%	Sumayi Investment International Ltd	10 February 2015
199/2005	75%	Sumayi Investment International Ltd	10 February 2015
202/2005	75%	Sumayi Investment International Ltd	10 February 2015
200/2005	71%	African Rock Ltd	10 February 2015
203/2005	71%	African Rock Ltd	10 February 2015

The Manyara deposit is known for a variety of gemstone other than emeralds, including alexandrite, ruby, garnet and spinet. Emeralds and gemstones from the Manyara region are brilliant with a vivid lustre and high transparency (Gubelin 1974). The alexandrite displays the classic 'alexandrite effect' whereby it displays a bluish-green hue in daylight and a raspberry colour in incandescent light. According to Gubelin, gemstones from the Manyara region are of exceptional gem quality producing high grade stones of up to 5 carats (source: The Emerald Deposit at Lake Manyara; The Lapidary Journal 5, 338-347 Gubelin).

The licences are surrounded by excellent infrastructure including, power, access roads and water supply.  

Consideration 

The Consideration for the acquisition of the six mining licences in Lake Manyara will be satisfied by a cash payment of US$450,000 in total for the 75% and 71% holdings in the shares respectively from the vendors. 

Moreover, the Company has acquired the right to exercise the option over the remaining 25% holding owned by Sumayi Investment International for a consideration of $600,000 in 12 months, or $1,500,000 in 24 months to be settled entirely by the issue of equity by the Company in the event that the option is exercised. However, the Company has not acquired the option for the remaining 29% owned by African Rock Ltd which is subject to further negotiation.

Company Comment

The addition of these licences complement the existing portfolio and progresses the company's strategy of working with local partners in the exploration and development of mineral assets, with initial focus in Tanzania.  

The Directors believe that the acquisition provides a good opportunity in the coloured gemstone market and paves the way to attract a strong partner to joint venture and create a revenue stream for Obtala Resources from the gemstone market. Also, the acquisition will provide Obtala with substantial and important foundations for creating a gemstone division.

Contact

Nigel Chapman BSc (Hons) Aus I.M.M C.O.O.	[phone]
Obtala Resources plc www.obtalaresources.co.uk
Ray Zimmerman/Jonathan Evans	[phone]
Zimmerman Adams International Ltd - Nominated Adviser and Broker

Notes

Information in this announcement has been reviewed by Mr. Sam Kiri, ACMA, CFA, who is a member of the American Society of Mechanical Engineers, US and the Institute of Engineers, Sri Lanka has more than 15 years relevant experience and is a Qualified Person under the AIM rules. 

 

END

 

 

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