Operational Update

RNS Number : 7689B

Obtala Resources Limited

08 April 2013

 



8 April 2013

Obtala Resources Limited

("Obtala" or the "Company")

(AIM: OBT)

Corporate and Operational Update

Obtala Resources Limited (AIM:OBT), the natural resource investment and development company, is pleased to provide a corporate and operational update.

Highlights:

·       2013 logging season commences in Mozambique:

o  Railway sleeper manufacture re-commences

o  Strong domestic interest in timber products

o  Additional buyers for export saw timber identified

o  Building up solid land base in Northern Mozambique

·       Sun-dried tomato project in Tanzania progressing well:

o  Drip irrigation equipment ordered

o  Processing equipment being manufactured

o  Water well drilling to commence shortly

Forestry

Mozambique

The 2013 logging season has officially opened in Mozambique and the Company has re-started the manufacturing of wooden railway sleepers for a private Mozambique registered company who is responsible for the northern railway network in Mozambique. The current requirement is for 7,500 units for line maintenance over the next four months, with negotiation in progress with the Brazilian mining conglomerate, Vale, for an additional order to supply wooden sleepers for the Lichinga line upgrade. The Lichinga upgrade project extends over 240km and work is expected to start in late May.

Hardwood sales have continued over the past two months with cut timber shipped to two buyers in South Africa. With the opening of the cutting season production levels and sales of sawn timber are expected to grow. An initial order has been received for our engineered flooring product which is being manufactured in Europe. In addition to the sleeper and export cut timber orders, the Company currently has a monthly order book in excess of $75,000 for timber products from local demand in-country. An order has been agreed to supply an initial 50m³ per month to a large construction company in Maputo, potentially increasing to 100m³ in H2 2013. The company is continuing to evaluate other opportunities to increase its land holding as it moves towards being the most significant concession holder in the region.

Representatives from the Forest Stewardship Council ("FSC") made their initial site visit in January. A fact finding report based on this inspection is pending.

Agriculture

Tanzania

Work continues on the recently acquired Magole Farm near Morogoro in Tanzania where the Company intends to establish a horticultural business. A hydrogeology survey has been completed with water well drilling expected to commence in the next ten days. An order has been placed for drip irrigation equipment and installation, which the Company expects to be fully commissioned after three months and will cover an area of approximately 30 hectares. A tomato washing and inspection line is currently being manufactured in South Africa and will arrive on site in late May.

The Company's objective of building a sun-dried tomato enterprise remains on course with initial product expected in Q3 2013. Discussions are currently in progress with two buyers operating in Europe and North America. Predictive yields of the final dried product are expected to be in the order of ten tonnes per hectare, with a total of ten hectares harvested monthly on a rotation basis once the project is operating at full capacity. The project will provide high yielding, high value crops grown consistently throughout the year to supply both local and international markets, generating a steady, regular revenue stream.

Corporate

Approval for the off-market transaction to enact the buyback of 11,949,378 of the Company's ordinary shares ("Ordinary Shares") held by Mineral Wealth International in Bushveld Minerals, as per the announcement made on 6 March 2013 was received at the General Meeting held on 3 April 2013.  The transaction was completed on 6 April 2013 with the Ordinary Shares in the Company to be transferred over the coming day. Once the shares have been transferred, the Company will hold these in treasury.

Total Voting Rights

Following the buyback of 11,949,378 Ordinary Shares in the Company (expected 8 April 2013) the total number of shares in issue will be 246,934,182. This figure may be used by shareholders in the Company as the denominator for the calculation by which they will determine if they are required to notify their interest in, or change of interest in the share capital of the Company under the Financial Service Authority's Disclosure and Transparency Rules. 

Francesco Scolaro, Chairman of Obtala, commented: "In spite of recent share price drops, I am extremely encouraged with the progress our company continues to deliver both in Mozambique and Tanzania. Our focus and efforts remain centred around increasing revenue generation, working around high margins, and I am confident that we will achieve our goals. We remain committed to our investment in Paragon Diamonds and are supportive of the team and project in Lesotho. We continue to work relentlessly to advance Obtala towards becoming a dividend yielding Company in the near future."

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

For further information on Montara Continental see our website www.montaracontinental.com

 

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