Investment into Zamsort Limited, Zambia

Ortac Resources Ltd / Epic: OTC / Market: AIM / Sector: Mining & Exploration

30 March 2015

ORTAC RESOURCES LTD 

("ORTAC" OR THE "COMPANY")

Investment into Zamsort Limited, Zambia

Funding provided by way of Secured Convertible Loan Note

Ortac Resources Ltd ("Ortac"), the AIM listed exploration and mine development company, is pleased to announce that it has today entered into a Secured Convertible Loan Note (the "Convertible") and a Call Option Agreement (the "Option") with Zamsort Limited ("Zamsort"), a private company registered in Zambia that holds a prospective Cu-Co mining and exploration licence in the Zambian Copper Belt.

Highlights:

· Zamsort holds the rights to a 4km2 Small-Scale Mining Licence ('SML') over the Kalaba Cu-Co resource enclosed within a 999.28km2 prospecting licence located in the Zambian Copper Belt;

· Estimated oxide resource of 16.59Mt @ 0.94% copper ('Cu') equivalent (non-JORC) estimated in the Small-Scale Mining Licence on limited exploration drilling carried out during the late 1990's; 

· Over 30,000 tonnes of screened ore grading at 3.5% acid soluble copper ('ASCu') stockpiled on site ready to be shipped and toll treated;

· Initial subscription of US$600,000 secured convertible loan notes for 10.71% stake in Zamsort allowing for a period of due diligence with a call option valid for one year which, if exercised, would allow a further subscription by Ortac of US$600,000 loan notes and increase Ortac's stake in Zamsort to 19.35%.

Vassilios Carellas, Ortac's CEO, commented, "Zambia is considered to be one of the most politically stable and mining friendly countries in Africa with the Zambian Copper Belt being recognised as the leading source of copper from the African continent over the last decade. Copper mining in Zambia has gradually migrated westward. The most recent mine commenced production in 2014 and is located 40km to the east of Zamsort's Licence area.

We consider the Kalaba Project to be one of the most exciting, undeveloped polymetallic assets in Zambia at the moment, offering existing small scale production along with the opportunity to explore a world class licence with the potential to host Zambia's next big mine development."

About Zamsort Limited

Zamsort is a private Zambian registered company that is the 100% owner of the Kalaba Cu-Co Project located approximately 1,000 km from Lusaka, in Mwinilunga, North Western Province, well within the trending arm of the major geological structure known as the Lufilian Arc (copper belt), on the western flank of the Kabompo Dome. 

The project consists of a 4km2 Small-Scale Mining Licence ('SML') over the Kalaba Cu-Co mineral resource enclosed within a 999.28km2 Large Scale Prospecting Licence ('LPL'), which was previously explored by Equinox Minerals Limited ('Equinox') and Anglo American Prospecting Services ('AAPS') by way of the Zambezi Joint Venture ('JV') through AAPS's affiliate Zamanglo Prospecting Ltd ('Anglo American') during the late 1990s as part of the Kabompo Property. The current LPL encompasses 7 of the top 10 high priority exploration targets identified through the JV prior to Anglo American exiting the country in 2001.

The SML expires in May 2015, however Zamsort have submitted an application and paid the relevant fees to get the SML renewed for a further 10 years. The LPL was officially issued on 16 October 2014 and is issued for an initial two year period, allowing for two renewals for two additional years each plus one more year and can be held on this basis for a maximum total of seven years.

In order for Zamsort to maintain the SML in good standing it has undertaken seasonal mining from the oxide copper resource exposed on surface. Zamsort has estimated that approximately 70,000 tonnes of material has been mined to date from Kalaba. At present, it has estimated that it has approximately 33,000 tonnes of screened ore grading at 3.5% ASCu stockpiled on site and ready to be shipped and toll treated at one of the local facilities in the copper belt where non-exclusive off-take agreements are already in place.

Zamsort's EBITDA for the 12 months to 31 December 2014 was $184,497. The proceeds of all subscriptions for the Convertible shall be used for Zamsort's working capital and capital expenditure requirements.

The estimated Kalaba Cu-Co oxide resource of 16.59Mt @ 0.94% Cu equivalent is exposed on surface and has been generated in-house by Zamsorts' Chief Geologist and although it has been registered by Zamsort with the Geological Survey and Ministry of Mines in Zambia, at present it is not considered to be code compliant.

Terms of the Convertible and Call Option Agreement

The convertible loan notes are repayable on the first anniversary of drawdown and have an annual interest rate of 8 per cent which is payable on the redemption or conversion of the notes. The Company is entitled to convert the notes into ordinary shares of Zamsort equal to 10.71 per cent of the issued share capital of Zamsort. In addition, the loan note instrument incorporates an anti-dilution mechanism in the event that Zamsort raises capital from other sources.

While the notes remain in issue, Ortac and its advisers have the right to carry out detailed due diligence on Zamsort. Zamsort also undertakes upon the issue of the Convertible to appoint Vassilios Carellas to its board as an executive director with an executive management role in the operations of the Company.

Subject to further due diligence and at Ortac's sole discretion, pursuant to the Option, Ortac has the right to apply for, and Zamsort shall issue, further convertible loan notes for the aggregate principal amount of US$600,000 (the "No.2 Loan Notes"). The Option may be exercised at any time before the expiration of one year from the date of the agreement. The No.2 Loan Notes are also repayable on the first anniversary of drawdown and have an annual interest rate of 8 per cent which is payable on the redemption or conversion of the notes. The Company is entitled to convert the notes into ordinary shares of Zamsort equal to a further 8.64 per cent of the issued share capital of Zamsort. In addition, the instrument also incorporates an anti-dilution mechanism in the event that Zamsort raises capital from other sources.

The Company will make further announcements as appropriate.

For additional information please visit - www.ortacresources.com

Appendix

ASCu Acid Soluble copper

Lufilian Arc/copper belt The Lufilian Arc / copper belt is a region of Central Africa running throughnorthern Zambia and the southern Democratic Republic of Congo known forcopper mining

Not Code Compliant Not compliant to any internationally recognised method for estimating andcalculating ore resources, such as JORC or National Instrument 43-101