Woodbois Regulatory News (WBI)

24 March 2010

Obtala Resources plc

Community Mining Scheme Commences for Diamond Recovery, Sierra Leone

·; Community Mining Scheme fully endorsed by Sierra Leone Government and key stakeholders

·; Commencement of three month trial partnership with local artisanal miners

§ 450 workers from three chiefdoms to be employed

§ Daily salaries provided with diamond recovery bonus

§ Equipment supplied

·; Optimisation of DMS plant at Konoma in process

·; Diamonds recovered from gravels treated during optimisation process reported > 95% gem quality

·; Community development programme underway

§ Including pledge to develop regional youth football academy

Obtala Resources plc ("Obtala") (AIM:OBT), the UK resources investment and development company, today announces the commencement of a Community Mining Scheme within the mining licences hosting the alluvial diamond mining operation at Konoma, within the Kono District of Sierra Leone. The mining licences are held by the 100% owned Obtala subsidiary, Sierra Leone Hard Rock Limited. The Community Mining Scheme has been launched following endorsements, resulting from a consultation process held in Sierra Leone, with Vice President, Hon. Chief Samuel Sam-Sumana, the Minister of Mineral Resources, Hon. Alhaji Alpha Kanu, the Minister of Labour, Employment and Social Security, Hon Minkailu Mansaray, the Governor of the Kono District, the Paramount Chiefs for the Nimiyama, Nimikor and Sandor Chiefdoms and the Senior District Mining Engineer.

The Community Mining Scheme is a partnership between Obtala and the artisanal miners operating in the respective Chiefdoms. Currently the Kono District is home to one of the worlds' largest concentrations of artisanal diamond miners, many of whom live in near poverty, and typically unemployment in the area is high. The partnership, endorsed by the Government of Sierra Leone and key stake holders, will see Obtala paying daily salaries and taxes due, and providing mining equipment to 150 miners from each of the three chiefdoms, totalling 450 workers. Obtala will ensure a policy of socially responsible employment is complied with at all times. The programme will be trialled for a 3 month and upon successful completion shall be rolled out for a further 12 months with an additional 1000 people, in total, employed from the Chiefdoms. Obtala will also provide the sales and marketing outlet for diamonds mined during the term of the partnership, and will ensure that the diamonds pass through the Kimberley Certification process in Freetown and that all taxes are paid to the Government of Sierra Leone.

Obtala continues to increase its own production capability and is currently in the process of optimising the DMS plant at Konoma. Diamonds recovered from the gravels treated during the optimisation process are reported at over 95% gem quality.

Frank Scolaro, Chairman of Obtala, commented that "Obtala's intention is to engage and work with the people of Sierra Leone. We recognise that the District in which we operate is severely depressed and opportunities are limited for the local people. The partnership allows all parties involved; Obtala, the Government of Sierra Leone and importantly the people of the Kono District to benefit. Obtala will provide the current miners with a daily wage, profit share of stones recovered and equipment. The agreement enables all parties to see the alluvial beds rapidly expand production under a formal mining regieme. As well as the direct benefits the Mining scheme provides to the local area, Obtala is establishing a community development programme including a pledge to establish and sponsor a regional youth football academy." 

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