Diamond Sales

RNS Number : 3586T

Obtala Resources Limited

27 September 2010

 



Obtala Resources Limited

 ("Obtala" or "the Company")

Diamond Sales, Sierra Leone

·     'Special' gem quality stones achieved average value of $3,278 per carat

·     Gem quality, run-of-mine, stones achieved value of $322 per carat

·     Bulk sampling identifies potential significant returns on increase production

·     Kimberly Certificate issued by the Minister of Mineral Resources of Sierra Leone

Obtala Resources Limited (AIM:OBT), the resources investment, development and production company, today announces its first sale and export of select rough diamonds for US$744,270 from the Konoma alluvial project in Sierra Leone. The parcel of 2,480 carats, sold to international buyers at sight in Freetown, was recovered from recent bulk sampling activities at the Bakidu operation and included a selected blend of "special" stones, gem quality stones and industrial stones.

Special Stones (greater than 10.80 carats)	US$/Carat
23.26	3,105.00
14.90	4,776.00
11.93	2,280.00
11.34	2,715.00
Specials Average	3,278.00
Gem Quality	321.94
Industrial Quality	31.00
Overall Parcel Average	300.00

Established Sales Process

The stones were inspected and valued in Freetown by representatives of VL Holdings, the Sierra Leone Government and an Independent Diamond Valuation (IDV) Company. The role of the IDV is to provide a second, independent valuation of diamond parcels exported through the Gold and Diamond Department (GDD) of the National Revenue Authority.

VL Holdings entered into an agreement with Obtala whereby VL Holdings acts as the exclusive distributor responsible for the collection, safe transportation, marketing and selling of stones. Security and transportation in Sierra Leone was carried out by G4S, a specialist security company. VL has acquired the exclusive rights for a one year period (refer to the Press release dated 20^th January 2010). Under the terms of the agreement VL has further agreed to pay Obtala an amount equal to the price per carat as determined by the Government Diamond Valuator ("GDV") plus a 15% premium on all stones. The GDV is regulated by the Government of Sierra Leone under the Kimberley Process Certification Scheme. In addition VL will pay OBT 50% of the realised value, after costs, from the sale of polished individual stones greater than or equal to 5 carats.

Frank Scolaro, Chairman of Obtala, commented: "I am delighted with the results of our first sale of diamonds from Sierra Leone. Today's sale demonstrates the high value stones from the Konoma project can realise and we shall continue to optimise our Sierra Leone diamond operations in order to rapidly achieve maximum value from our assets. Our company has now put into place, and has a good knowledge of the procedures, strategy and working relationships which will now be further developed in country to increase production and profitability."

Contact:

Obtala Resources Limited
Simon Rollason - Managing Director Frank Scolaro - Chairman www.obtalaresources.com	[phone]
ZAI Corporate Finance Ltd
Ray Zimmerman/ John Depasquale	[phone]
Threadneedle Communications
Laurence Read	[phone]

 

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