African Potash today announced that it is ready to begin exploration at the Lake Dinga project in the Republic of the Congo (Congo-Brazzaville). This comes as the company says it has re-entered into an agreement for the acquisition of 70% of La Societe des Potasse set des Mines SA (SPM), which holds the rights to the project.
The agreement would allow African Potash to acquire the entire issued share capital of Patagonia Capital, a Mauritian company that holds a 70% interest in SPM.
The acquisition would be a consideration payable of US$15 million (R136 million), which will be satisfied by the issue and allotment of up to US$12 million worth of new ordinary shares in the company.
Edward Marlow, African Potash chairman and CEO, said: “The board is confident that the Lake Dinga project is a highly attractive investment opportunity with considerable upside potential. I am therefore delighted to announce our re-entry into an agreement to acquire an indirect 70% interest in the project, following the formal grant of the Permis de Recherches [exploration licence] to SPM. Lake Dinga is located in a region that hosts world-class potash projects such as Sintoukola and Mengo, and subject to shareholder approval on 21 February 2013. I look forward to identifying the resource potential of this exciting asset through a defined exploration programme.
“The outlook for commercial potash exploration remains highly positive, with rising population and growing affluence in developing countries leading to ever-increasing demand for agricultural produce. With potash being a key constituent in fertiliser, the pressing need to develop quality potash assets is expected to continue for many years to come, creating a significant opportunity for an investment company such as African Potash to identify and develop projects and, in so doing, delivering significant shareholder value.”