LONDON (Alliance News) - Obtala Resources Ltd Monday said it had signed a binding deal for an additional 1,534 acres of agricultural land in Tanzania ideally suited for fruit trees, including some already planted with mango trees, as it started selling down its stake in Bushveld Minerals.
It said 120 hectares of the land is already cleared, and there are 1,500 fruit-bearing Mango trees already planted. It will start by planting 50,000 new trees on a further 200 hectares, and expects initial production of five to seven tonnes a hectare, rising to 10 to 15 tonnes as the trees mature.
The agreement is a heads of agreement, which comes just before a formal deal is signed. It is with a private, unrelated, Tanzanian company, which will keep a 20% stake in a new operating company the two will form.
Obtala said it has also decided to cut its stake in Bushveld Minerals Ltd due to the decline in that company's share price, a lack of recent transparency at the company, and due to Obtala's understanding of the timing and progress from Endulwini's discussions with its funding partner.
Obtala, which is Bushveld's second-largest shareholder, didn't say how much of its 35.36% holding it will sell. However, a document filed with the London Stock Exchange showed its holding had dropped to 8.52%.
Obtala Resources shares were up 3.2% at 8.9 pence Monday morning. Bushveld shares were up 10.3% at 4 pence.
By Steve McGrath; stevemcgrath@alliancenews.com; @SteveMcGrath1
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Bushveld Minerals (BMN)