Crop Planting Commences on Montara Agriculture JV

RNS Number : 4689V

Obtala Resources Limited

12 January 2012

 



12^th January 2012

Obtala Resources Limited

("Obtala" or the "Company")

(AIM: OBT)

Crop Planting Commences on Montara Agriculture JV, Tanzania

Obtala Resources Limited (AIM:OBT), the natural resource investment, development and production company, today announces that its agricultural business, Montara Continental Ltd ("Montara") has initiated planting of its maiden crop on its farm land in southern Tanzania.

Highlights:

·       First crops being planted

·       Land clearing of local scrub land - 80 hectares for trial farming with total land cover is 19,787 hectares

·       First harvest is expected in late April 2012

·       On-site oilseed processing plant to be evaluated

·       Full-time Farm Manager appointed

Planting activities have now commenced in the project with sesame seed currently being sown. Further seed crops to be planted are soya, groundnut, canola and sunflower. In addition a small parcel of land will be sown with cassava and seed maize.

This trial area is being used as a "proof of concept" and in future will become a training centre or "Centre of Excellence" for the surrounding farmers as part of a planned out-grower scheme. The bulk of the crop produced within this specified area will be sold back to the seed suppliers in the form of an off-take agreement. A portion of the crop will be used to determine the oilseed production potential for the project and it is anticipated a small-scale trial oil processer will be set up to further evaluate the potential for processed oilseed production in the area.

The Company has recruited Grahame Vetch as the Farm Manager. Grahame is an agricultural economist with over 30 years of large-scale farm management experience. He was previously the Country Director for Dominion Farms Ltd; a 17,000-acre start-up irrigated rice and fish farm in Kenya. Grahame graduated from the Royal Agricultural College, UK in Farm Management and is a fluent Swahili speaker.

Montara shall continue to invest in Tanzania and Mozambique with the objective of realising profits from both expanded processing and farming operations. Sustainable productivity remains at the core of the Montara strategy with high yield crops being farmed as part of a land management programme.  

Francesco Scolaro, Chairman of Obtala, commented "I am very pleased to announce that planting activities have commenced on the project in Tanzania. This represents an important milestone in the project's development and we remain on course with our development plans and hope to have the first harvest in within the first half of 2012. We are delighted to have Grahame join the team as he brings a wealth of experience in operating in East Africa within this sector. Working in partnership with local communities our next step is to assess the viability of adding significant value to local farming by assessing the viability of producing oilseed in-situ ready for domestic use and export."

Photographs are available on the Obtala website.

Obtala Resources Francesco Scolaro - Chairman Simon Rollason - Managing Director www.obtalaresources.com	[phone]
Macquarie (Nomad and Broker)	[phone]
Nicholas Harland
Steve Baldwin
Threadneedle Communications	[phone]
Beth Harris Laurence Read

Background Information

Obtala, through its 75% owned subsidiary Montara Continental Limited, has acquired a 70% shareholding in Montara Land Company Limited which is the operating company for an agricultural concession totalling 19,787.62 hectares which is located within the Songea District, Ruvuma Region, Tanzania. Access to the area is excellent with the main Songea-Dar es Salaam tarmac road forming the eastern limited of the concession, which is located 80km north of the District Headquarters of Songea. The Title Deed for the land was issued on the 8th March 2011 and is leasehold valid for a period of 99 years with effect from 1st January 2011.

Montara is primarily focussed on developing crops to meet growing world food demand.  The Lutakira farm will initially grow versatile crops such as groundnuts, canola, sesame, soya beans and sunflowers, all of which can be converted to use as a fuel. Over the past year prices for these commodities have increased by almost 50%.

 

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