Mozambique Update

RNS Number : 6883S

Obtala Resources PLC

15 September 2010

 



OBTALA RESOURCES PLC

("Obtala" or the "Company")

Food and Energy Agricultural Operations to Begin, Mozambique

Obtala Resources plc (AIM:OBT), the natural resource investment, development and production company, today announces that its agricultural business, MontaraContinental Ltd ("Montara") has gained the necessary permissions to begin farming both food and energy crops in Mozambique. Montara, in which Obtala has a controlling 60% shareholding, will begin clearing ground immediately for planting of groundnuts and sunflower seeds.  Trial farming of these food and energy crops is expected to commence in 2011. 

Highlights  

·          Licence authorization granted for agricultural concession in Mozambique

·          Land covers 5,000 hectares in the Namuno District, Cabo Delgado Province

·          Provisional licence issued for 2 years thereafter granted concession for 50 years

·          Land clearance for groundnut and sunflower farming to commence immediately

Montara has been informed that the Centre of Investment Promotion (CPI) in Maputo, part of the Ministry of Planning and Development in Mozambique has authorised the issue of an agricultural licence covering 5,000 hectares. The land is located within the Namuno District of the northern Cabo Delgado Province. A provisional licence is issued for 2 years, converting to a 50 year concession licence following final approvals.

Montara is primarily focussed on developing crops to meet growing world food demand.  The Namuno farm will initially grow versatile crops such as groundsnuts and sunflower. Both crops can be converted to use as a fuel but groundnuts have a high nutrition value returned from a relatively small cultivation area. In the business model infrastructure development for a central food and fuel processing facility is planned, with Montara establishing a hub for both Namuno and future projects in the region.  In addition to processing food from Namuno Montara will look to work with local farmers in improving productivity and to act as a conduit to new markets, through its facilities. Through this strategy Montara looks to rapidly secure significant bulk, export food contracts to regions such as China and India and ensure neighbouring farms are key stakeholders in such activity.

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 sustainable land management programme.   In addition to the Namuno property, Montara holds a controlling 70% stake in a JV with an interest in 20,000 hectares of farm land within the fertile Songea district of southern Tanzania. Currently a Feasibility Study and Environmental Impact Assessment (EIA) are in progress on this property.

Frank Scolaro, Chairman of Obtala, commented that "Montara Continental is part of Obtala's strategy of realising near term value from a range of resources underpinning rapid development and population growth globally. While our crops can be used for energy production our primary objective is to create a profitable food processing hub for ourselves and other farmers in Mozambique and Tanzania. With this licence granted we are preparing to clear land for readiness of trial farming next year and plan  construction of a range of processing facilities in the region. With food prices expected to increase over time we believe Montara can develop a food industry in Eastern Africa that operates efficiently while ensuring long term sustainable cultivation of the land."

Contact:

Obtala Resources plc
Simon Rollason - Managing Director Frank Scolaro - Chairman www.obtalaresources.co.uk	[phone]
ZAI Corporate Finance Ltd
Ray Zimmerman/ Sarang Shah	[phone]
Threadneedle Communications
Laurence Read	[phone]

 

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