Joint Venture Agreement Signed

RNS Number : 0780S

Obtala Resources Limited

15 November 2011

 



15 November 2011

Obtala Resources Limited

("Obtala" or the "Company")

(AIM: OBT)

Joint Venture Agreement Signed for 140km² Agricultural Concession, 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 concluded a Joint Venture Agreement ("JVA") with its partner in Tanzania to develop and operate an agricultural business for both food and energy crops.

Highlights:

·       Obtala controlled subsidiary completes 70% interest in agricultural project

·       Land covers 14,000 hectares in  Southern Tanzania taking Montara Continental's total land holding in Mozambique and Tanzania to 342,653 hectares

·       Montara will manage, fund and operate the JV company

Obtala, through its 75% owned subsidiary Montara Continental Limited, has concluded a Joint Venture Agreement with a private Tanzanian company to acquire a 70% shareholding in a proposed joint venture company, which will act as the operating and management company for an agricultural concession totalling approximately 14,000 hectares located in Southern Tanzania. The partner company is currently working towards completing the requirements for the granting of the title deeds to the land.

Consideration paid upon signing is US$200,000, with these funds committed to costs related to securing the title deeds for the land. Two further cash payments are conditional upon the Title Deeds being granted, with a cash payment of US$300,000 paid upon successful granting of the Title Deeds and a final cash payment of US$250,000 paid on the first anniversary of the Title Deeds being granted.

The agricultural concession will initially grow versatile crops such as groundnuts, sunflower, sesame, canola and soya bean. In addition to processing crops for both domestic and international export, Montara will look to work with local farmers to improve their productivity and act as a conduit to new markets, through its facilities. Through this strategy, Montara plans to rapidly secure significant bulk, export food contracts to other international markets including China and India, in additional to local markets. The medium to long term strategy is to ensure neighbouring farms are key stakeholders in such activity.

Francesco Scolaro, Chairman of Obtala, commented "I am pleased to announce this agreement which substantially increases Montara's potential agricultural landholding in East Africa to approximately 44,000 hectares. Montara Continental remains a key part of Obtala's strategy of realising near term value from a range of resources. We expect the title deeds to be issued H2 2012 and we will initiate work on the concession with trial farming later next year. Work continues on our existing farming JV with trial farm crops expected to be planted towards the end of the month. With the forecast increase in food prices, we believe Montara can develop a food industry in Eastern Africa that operates efficiently while ensuring the long term cultivation of the land."

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

 

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