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.”