15th Jun 2015 10:13
LONDON (Alliance News) - Obtala Resources Ltd Monday said it is completing the acquisition of 50 year leases for two new timber concessions of 35,000 hectares in total in Mozambique, bringing the company's total forestry area to 314,965 hectares.
In a statement, Obtala said the news provides for a 13% increase in its current land holdings.
"The new blocks are situated adjacent to our main operational centre and, together with the existing holdings, provide a critical mass in terms of approved annual permitted cut," Obtala said.
"We are dedicated to making the timber operations a great success in Mozambique where we have built a highly efficient operational platform over the past few years. The additional land holdings provide security that we can achieve higher production level," Francesco Scolaro, chairman, said in as statement.
Obtala said it has commissioned Honour Capital, a forestry advisory, to undertake a valuation review of the blocks.
The company said it plans to inject USD300,000 for additional capital equipment. Scolaro said the injection is designed to "increase and improve our operational capacity and offer a wider range of timber products to the growing local market".
"The board of Obtala has also agreed a strategy to divest the forestry division thereby recognizing its true value and to grow the business in Mozambique more expeditiously," the chairman said.
Obtala shares were up 7.5% at 9.00 pence on Monday.
By Samuel Agini; [email protected]; @samuelagini
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