Andiamo Options Agreement

Ortac Resources Limited

03 February 2014

 

Ortac Resources Ltd ('Ortac')

Andiamo Exploration Ltd ('Andiamo') Enters into Option Agreement for Northern Portion of Haykota Licence

Ortac Resources Ltd, the AIM listed exploration and development company, is pleased to report that its exploration partner Andiamo has entered into an option agreement with Environminerals East Africa Ltd ('EEA') to explore and develop the northern portion of the Haykota Licence Area.

Terms of the Option:

·     Andiamo has granted EEA an option to earn a 50% interest and subsequently a 75% interest (the 'Option') in Andiamo's rights over 87km² ('the Project Area') in the northern part of the Haykota Licence, representing 35% of the total licence area held by Andiamo.

·     The Option is exercisable for a period of three (3) months from 30^th January 2014 (the 'Option Period').

·     During the Option Period EEA is to fund the collection and analysis of geochemical soil samples at an estimated cost of US$50,000.

·     On exercise of the Option, EEA can earn 50% interest in Andiamo's rights over the Project Area by funding exploration to the value of US$2,000,000 by the 31^st December 2015 (the 'Exploration Budget'). The Exploration Budget is to be managed and administered by Andiamo.

·     On completion of the 50% earn-in, Andiamo will grant EEA the exclusive right to earn a further 25% interest in Andiamo's rights over the Project Area by completing at its own expense exploration and research work leading to a Technical and Economic Assessment.

·     If the conclusions of the Technical and Economic Assessment indicate that a viable mining operation can be developed within the Project Area, then Andiamo and EEA shall establish a Project Company in which EEA will hold 75% of the shares and Andiamo will hold 25% of the shares.  Andiamo and EEA will then apply for a Mining Licence, subject to the laws of the State of Eritrea.

·     It is envisaged that a Mining Share Company shall be formed to hold the Mining License, in accordance with the provisions of the Minerals Proclamation 1995 of the State of Eritrea. A new jointly owned Private Limited Liability Company Project Company shall hold Andiamo and EEA's interest in such Mining Share Company holding a Mining License within the Project Area.

·     Following completion of the Technical and Economic Assessment and any application for a Mining Licence, the Parties will contribute to any expenditure pro-rata to their interests in the Project Area.

Ortac's CEO Vassilios Carellas comments: "The option agreement with EEA enables Andiamo to expand its exploration activities in Eritrea and begin work on targets that have previously not been pursued. This option covers 35% of the Haykota licence and does not impact the Yacob Dewar or Ber Gebey targets that are the current focus of Ortac's interests in Andiamo. I strongly believe that this agreement confirms the value of Ortac's investment in this highly prospective area."

In his letter to Andiamo's shareholders, CEO Dr Tim Williams comments: "This transaction will provide a pathway for Andiamo to evaluate several promising coincident electromagnetic and gravity anomalies which the company has previously not pursued whilst concentrating its efforts on the Yacob Dewar and the Shambotei gold deposits. The deal is non-diluting to shareholders, including the recent investment by Ortac Resources Ltd., but has the potential to uncover further Bisha-style Volcanogenic Massive Sulphide deposits".

**ENDS**

For further information please visit www.ortacresources.com or contact: Vassilios Carellas                     Ortac Resources Ltd                              Tel: [phone] Stewart Dickson                       Cantor Fitzgerald Europe                    Tel: [phone] Catherine Leftley                    Cantor Fitzgerald Europe                    Tel: [phone] Jeremy Stephenson               Cantor Fitzgerald Europe                    Tel: [phone] Jonathan Williams                   RFC Ambrian Limited                           Tel: [phone] Jen Boorer                                  RFC Ambrian Limited                           Tel: [phone]

 

END

 

 

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