Last checked at 7 Apr 2011 10:00
Ortac Resources Ltd / Epic: OTC / Market: AIM / Sector: Mining & Exploration
07 April 2011
Ortac Resources Ltd ('Ortac' or 'the Company')
Rio Paranaiba Update
Ortac Resources Ltd, the AIM listed exploration and development company focussed on precious metal projects in Europe, announces a restructuring ('the Restructuring') of the ownership of the Rio Paranaíba iron ore project in Brazil ('Rio Paranaíba' or 'the Project'), in which the Company holds a legacy 77% interest. The Restructuring is designed to unlock the value of the Project whilst enabling Ortac to remain focussed on its core European gold and precious metal assets.
Overview
·; Rio Paranaíba exploration licences to be transferred to a BVI registered privately funded vehicle, Paranaíba Minerals Limited ('Paranaíba Minerals')
·; Up to $C2m will be raised from external sources to be used to rapidly advance the Project
o The funding is via a placement of up to 8,000,000 shares at 25c which provides a pre money valuation of Paranaiba Minerals of $C2.2 million
o Participants in the funding will also receive 1 warrant for every two shares exercisable at 35c
o Ortac will retain controlling interest with its 80% pre money stake valued at $C1.6m
·; Ortac to retain majority board control of Paranaíba Minerals
·; Drilling campaign expected to commence imminently following the completion of the fundraising
·; Paranaíba Minerals will have a mandate to evaluate additional iron ore projects in the region - several assets currently being assessed as potential acquisition opportunities
Ortac CEO Vassilios Carellas said, "This rationalised structure of ownership of the Rio Paranaíba project will enable the board of Ortac to concentrate on the rapid advancement of the Company's core European projects, which includes our flagship Kremnica Gold Project in Slovakia, whilst retaining our guidance and support of the development of this highly prospective iron ore asset through Ortac's retained controlling stake and board representation. In conjunction with this, the proposed funding for Paranaíba Minerals will also provide it with the ability to rapidly advance development of Rio Paranaíba, following the completion of an encouraging ground magnetic processing, interpretation and modelling exercise, ensuring that Ortac and its shareholders will benefit from any future value uplift as the Project moves through the development cycle."
Further Information Regarding the Restructuring
Under the terms of the Restructuring, ownership of the Rio Paranaíba exploration licences ('the Licences'), which are currently held by Fernando Thompsen, will be transferred to Paranaíba Minerals. In return for the transfer of the Licences, Fernando Thompsen and Miller Creek Resources Inc (together "Fernando Group") will retain a 20% interest in Paranaiba Minerals, prior to the raising of funds from external sources. The funds raised will be used to commence a drilling campaign at Rio Paranaíba, and to assess other opportunities within Brazil.
Representatives from both Ortac and Fernando Group will be appointed to the board of Paranaíba Minerals, including Stewart Winter from Fernando Group and three Ortac appointed directors, including Charles Wood who currently serves as a Director of Ortac. Ortac's additional appointed board representatives will be Mr. Oscar Louzada, who will assume the role of Managing Director. Mr. Louzada has over ten years experience in the financial services industry and has worked with a broad range of mining and energy companies through his roles at Beeson Gregory and Canaccord Adams. It is anticipated that this board structure will ensure the onward development of the Project is conducted for the benefit of all stakeholders.
**ENDS**
For further information please visit www.ortacresources.com or contact: | ||
Vassilios Carellas | Ortac Resources Ltd | Tel: +44 (0) 20 7440 0646 |
Charles Wood | Ortac Resources Ltd | Tel: +44 (0) 20 7440 0646 |
Roland Cornish | Beaumont Cornish Limited | Tel: +44 (0) 20 7628 3396 |
Rosalind Hill Abrahams | Beaumont Cornish Limited | Tel: +44 (0) 20 7628 3396 |
Jeremy Stephenson | Seymour Pierce Limited | Tel: +44 (0) 20 7107 8000 |
Stewart Dickson | Seymour Pierce Limited | Tel: +44 (0) 20 7107 8000 |
Jeremy King | Optiva Securities Ltd | Tel: +44 (0) 20 3137 1904 |
Jason Robertson | Optiva Securities Ltd | Tel: +44 (0) 20 3137 1906 |
Hugo de Salis | St Brides Media & Finance Ltd | Tel: +44 (0) 20 7236 1177 |
Lottie Brocklehurst | St Brides Media & Finance Ltd | Tel: +44 (0) 20 7236 1177 |
Notes:
Ortac Resources Limited is an AIM listed exploration and development company focussed on the development of precious metal projects in Europe. Its focus is on the Carpatho Balkan Metallogenic Belt, initially the Central Slovakian Volcanic Field.
The Company has a current JORC compliant resource of 1.1Moz of gold equivalent from its flagship Kremnica Gold Project in Slovakia, and Snowden Mining Industry Consultants Pty are in the process of preparing a preliminary scoping study on the project, which is expected in H2 2011. The Company's objective is to complete a definitive feasibility study and environmental impact assessment with a view of bringing the Kremnica Gold Project into production.
The Company's strategy is to utilise its highly experienced board and management team and its solid foothold in Central Europe to consolidate additional precious metal development opportunities to build shareholder value.