3rd Feb 2014 10:07
LONDON (Alliance News) - Ortac Resources Ltd Monday said its exploration partner has done an option deal for the exploration and development of the northern portion of the Haykota license area in Eritrea, but the agreement doesn't impact the areas that are the main focus of Ortac's interest in the area and won't dilute its holding in the partner.
In a statement, Ortac Resources Chief Executive Vassilios Carellas said he thinks the deal confirms the value of Ortac's investment in the area.
Under the deal Ortac's exploration partner Andiamo has done with Environminerals East Africa Ltd, the latter has an option to earn a 50% interest and then a 75% interest in Andiamo's rights over 87 square kilometers in the northern part of the license. That is about 35% of the total license area held by Andiamo.
"The option agreement with EEA enables Andiamo to expand its exploration activities in Eritrea and begin work on targets that have previously not been pursued. This option covers 35% of the Haykota licence and does not impact the Yacob Dewar or Ber Gebey targets that are the current focus of Ortac's interests in Andiamo. I strongly believe that this agreement confirms the value of Ortac's investment in this highly prospective area," Carellas said in a statement.
"The deal is non-diluting to shareholders, including the recent investment by Ortac Resources Ltd., but has the potential to uncover further Bisha-style Volcanogenic Massive Sulphide deposits," Andiamo Chief Executive Tim Williams said.
Earlier this month, Ortac said it it had formed a strategic alliance with Andiamo, taking a stake of up to 26.7% in the exploration company for USD1.5 million with an option to take a further 21% stake for USD2.0 million.
Those funds were to be used for a drilling programme in the Yacob Dewar deposit on the site.
Ortac Resources shares were down 2.1% at 0.2496 pence Monday morning.
By Steve McGrath; [email protected]; @SteveMcGrath1
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