African Potash re-enters agreement to acquire interest in Republic of Congo

29th Jan 2013 14:42

African Potash, an AIM-listed African exploration company, said Tuesday that it has re-entered into an agreement to acquire an indirect 70 per cent interest in La Societe des Potasses et des Mines (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 total maximum consideration for the acquisition will $15m, which will be satisfied by the issue of $12m-worth of new ordinary shares, and $3.0m cash. The transaction was previously terminated as a result of "significant delays" in to the granting of the permis de recherches, meaning certain conditions could not be satisfied. SPM has since been granted the formal permis de recherches for the project by the Republic of Congo. The company is also proposing the appointment of Jean-Pierre Conrad as Chairman, although this remains subject to approval by shareholders. The company said he has extensive experience in the resources industry in addition to a solid background in the financial markets. African Potash Chairman and Chief Executive Officer, Edward Marlow, 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 to SPM. "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."The share price rose 12.50% to 3.38p by 15:01.NR