Brazzaville, Republic of Congo — 30 January 2013 – African Potash “’ an AIM listed investing company focussed on sub-Saharan potash assets “’ has signed an agreement to acquire an indirect 70% interest in La Societe des Potasses et des Mines S.A. (SPM), which holds the exclusive right to conduct mining research activities for potash salts over the Lake Dinga project in the Republic of Congo.
The agreement is to acquire the entire issued share capital of Patagonia Capital Limited, a Mauritian company which holds a 70% interest in SPM, a company incorporated in the Republic of Congo for the purpose of mineral exploration.
The Lake Dinga project is surrounded by numerous potash development projects including the Sintoukola potash project, owned by Elemental Minerals Limited and the Mengo potash project, owned by Evergreen Resources Holdings (BVI) Ltd following its acquisition of MagIndustries Corp. It benefits from access to infrastructure, and is less than 60km from the port of Pointe-Noire
African Potash has revealed that the total maximum consideration payable for the acquisition is US$15 million, which will be satisfied by the issue and allotment of up to US$12 million worth of new ordinary shares in the company at 10p per share, and by the payment of up to US$3 million in cash.
Jean-Pierre Conrad “’ who has extensive experience in the resources industry, in addition to a solid background in the financial markets “’ has been proposed as Chairman to the Company Completion of the acquisition and appointment of Conrad is subject to shareholder approval in line with the company’s investment strategy
The company say exploration work is planned to delineate a JORC compliant resource and maximise the value potential of the project. As part of this process, African Potash is in advanced negotiations to appoint a full operations team at the licence area, including a country manager and chief geologist.
Subject to shareholder approval, African Potash’s first exploration project will be the 702.5 sq km Lake Dinga project area, extending 57 km NW-SE into the Kouilou region, in the Republic of Congo.
Exploration will be conducted in two stages: a Phase I drilling programme, comprising four holes, to be completed by December 2013; and a Phase II drilling programme comprising 12 holes to be completed by September 2014. The drilling results, in tandem with historical drill data and seismic data, will be evaluated to prove up the resource potential.
In addition to proving up the value potential of Lake Dinga, the Board will continue to seek to identify other projects in order to establish a solid portfolio of highly prospective potash assets in sub-Saharan Africa.
Source: African Potash. For more information, click here.