St. Peter Port, Guernsey, 20 September 2011 -- Obtala Resources Limited (AIM:OBT), a natural resource investment and development company, recently announced that it has signed a heads of agreement (HoA) to acquire a 75% interest in a private Mozambique registered company, which holds a number of forestry concession in Mozambique. The remaining 25% is held by a local partner who is also the vendor. The acquisition will not be a substantial acquisition under the London Stock Exchange AIM Rules.
The acquisition would give Obtala 75% interest in 180,000 hectares of forestry concession, bringing the company's total holding in Mozambique to 347,00 hectares (including area under application). Obtala would acquire a 70% interest in return for a commitment by Argento to develop the concessions, and a further 5% to be acquired for EUR 150,000 in Obtala shares at 40 pence per share and EUR 100,000 cash, bringing total interest to 75%
The concessions held by the Vendor totals 180,000 hectares and are located in three separate regions. The transaction will be effected by a formal contract once the company has completed and is satisfied with its due diligence check of the vendor and the assets. The acquisition will be made by Montara Continental Limited (Montara), through its 99.5% owned subsidiary Argento Mozambique Lda (Argento). Argento will assume full operational and management control and will assume responsibility for implementing the business plan and financing of the company.
Argento has agreed to acquire 70% of the target for no consideration but in exchange it has agreed to make certain investments in the target forestry concessions with the minority interest not contributing. In addition Argento has agreed to acquire a further 5% interest in the target for total consideration of EUR 150,000 in new ordinary shares in the company valued at GBP 0.40 per share and EUR 100,000 in cash.
The vendor has agreed not to dispose of the shares for a period of six months from the date of completion and following that under orderly market principals for a further six months.
Montara's forestry land holdings in Mozambique now total approximately 293,000 hectares, with an additional application for a further 54,000 hectare concession pending approval with the Ministry of Agriculture in Mozambique.
"I am very pleased to announce this Heads of Agreement, which now gives Montara the critical land mass required to develop our forestry business in Mozambique," said Francesco Scolaro, chairman of Obtala. "We are initiating operations on the ground and moving closer to creating a self-sustainable, profitable forestry and agricultural business. As mentioned previously, we expect near-term revenue streams to be produced by these projects, which will further establish the company in East Africa," he said.
"Once we obtain the Ministerial approval for the final applications, we will have exposure to over 347,000 hectares of forested land. This land package will enable us to evaluate the potential of bringing in an established partner to create a manufacturing facility in-country, bringing tremendous benefits to both Obtala and the citizens of Mozambique."