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Agreement to acquire Potash Asset

RNS Number : 8161W
African Potash Ltd
03 February 2012
 



African Potash Limited / Index: AIM / Epic: AFPO / Sector: Mining

 

African Potash Limited ('African Potash' or 'the Company')

Agreement to Acquire Potash Asset in the Republic of the Congo

 

African Potash Limited is pleased to announce that it has today entered into an agreement to acquire an indirect 70% interest in a potash exploration company located in the Republic of Congo, in accordance with its stated investment strategy.

 

Overview

 

·    African Potash has entered into an agreement to acquire the entire issued share capital of Patagonia Capital Limited ('Patagonia'), a Mauritian company which holds a 70% interest in La Societe des Potasses et des Mines S.A. ('SPM') ('the Proposed Acquisition'), a company incorporated in the Republic of Congo for the purpose of mineral exploration ('the Proposed Acquisition')

·    The total maximum consideration payable for the acquisition of Patagonia is US$15,000,000 which will be satisfied (subject to the achievement of certain milestones by SPM) by the issue and allotment of up to US$12,000,000 worth of new ordinary shares in the Company and by the payment by the Company of up to US$3,000,000 in cash

·    SPM currently holds a 12 month authorisation to conduct prospecting for potash (and associated minerals) in the lake Dinga area of the Republic of Congo, a highly prospective potash region ('the Project') and has applied to be granted a Permis de Recherche in respect of the same area

·    The 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 MagIndustries 

·    The Project benefits from access to infrastructure and is less than 60km from the port of Pointe-Noire

·    Completion of the Proposed Acquisition is subject to (amongst other matters):

 

SPM being granted a Permis de Recherche for potash and related minerals; and

Shareholder approval in line with the investment strategy outlined in the Company's original Admission Document

 

In addition to entering into the agreement to acquire Patagonia, the Company has also entered into a US$1 million loan facility with Patagonia which will enable Patagonia to fund the working capital requirements of SPM pending completion of the Proposed Acquisition. 

 

The Proposed Acquisition will constitute a reverse takeover for the purposes of the AIM Rules and accordingly, trading in the Company's shares has been suspended, pending publication of a readmission document (which will provide further detailed information on the Proposed Acquisition), which will be posted to shareholders in due course.

 

African Potash Chairman and CEO, Edward Marlow, said, "This acquisition represents our first transaction aimed at establishing African Potash as an exploration and development company focussed on potash assets in sub-Saharan Africa.  The project which has been identified by SPM is located in a globally significant potash region, flanked by projects currently being developed by international mining companies, providing confidence that we have identified an investment target with considerable potential.  With this highly prospective potash address, coupled with African Potash's highly experienced management team and Board, I believe we have the necessary components to rapidly build value within the Company."

 

* * ENDS * *

 

For further information visit www.africanpotash.com or contact the following:

 

Ed Marlow

African Potash Limited

+44 (0) 20 7408 9200

Jonathan Wright

Seymour Pierce Limited

+44 (0) 20 7107 8000

David Foreman

Seymour Pierce Limited

+44 (0) 20 7107 8000

Richard Greenfield

GMP Securities Europe LLP

+44 (0) 20 7647 2836

Susie Geliher

St Brides Media and Finance Ltd

+44 (0) 20 7236 1177

Hugo de Salis

St Brides Media and Finance Ltd

+44 (0) 20 7236 1177

 

 

 


This information is provided by RNS
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