Xtract Regulatory News (XTR)

19 Oct 2005 13:30

Cambrian Mining PLC19 October 2005 19 October 2005 Cambrian Mining Plc ("Cambrian" or "the Company") New investment in Resmex Plc Cambrian announced today that it has invested £1.0 million through the purchaseof 50 million new ordinary shares in Resmex Plc ("Resmex") (representing 22.3%of Resmex's issued ordinary share capital as enlarged by the issues referred toin the announcement released by Resmex today) at a price of 2p per share.Cambrian has entered into an orderly market arrangement with Resmex in relationto such shares for a period of 12 months from their admission to trading on AIM. Resmex has agreed to invest the funds raised from this share issue in aco-investment with Cambrian in the ordinary shares of an Australian company,Xtract Oil Limited ("Xtract Oil"). Xtract Oil, in conjunction with Australia'sCSIRO (Commonwealth Scientific and Industrial Research Organisation), aims todevelop commercially effective technology to unlock oil reserves in oil shaledeposits and to test the technology using oil shale deposits in an area inQueensland, Australia in relation to which it has an option over explorationrights. Xtract Oil has had no material trading to date and does not have anysignificant assets or liabilities other than rights to the technology referredto above. Under an agreement it has entered into with Cambrian, Resmex has agreed to payCambrian A$1.0 million (£0.4 million at an exchange rate of A$2.33/£1) for halfof the ordinary shares in Xtract Oil owned by Cambrian; as a result each companywill own 9 million shares in Xtract Oil (each representing 21.7% of Xtract Oil'sissued share capital) together with options over 4.5 million Xtract Oil shares. Resmex has also agreed to purchase from Cambrian half of any further Xtract Oilshares which Cambrian acquires under: (i) an offer by Cambrian to acquire up to 50% of the Xtract Oil shares not already owned by it and Resmex and under which Cambrian has agreed to acquire 4.2 million shares; and (ii) an underwriting arrangement with Xtract Oil under which Cambrian has agreed to underwrite a public offer of 20 million shares expected to be made by Xtract Oil by 30 November 2005 followed by a listing on the ASX. Cambrian will subscribe for a minimum of 11.8 million shares in the Xtract Oil public offer. In the event that Cambrian takes up the maximum 20 million shares in the XtractOil public offer, the result will be that Cambrian and Resmex will each hold21.1 million shares in Xtract Oil representing 34.3% of Xtract Oil's sharecapital as enlarged by the public offer offer. For further information contact: Cambrian Mining Plc John Byrne +44 (0) 20 7409 0890 Parkgreen Communications Cathy Malins / Annabel Leather +44 (0) 20 7493 3713 Notes to Editors: Oil shale is a 40-50 million-year-old sedimentary rock, which contains a solidhydrocarbon, kerogen. Kerogen is basically "fossilised algae" which has beenformed during the deposition of sediments in ancient lake environments. Theeffects of time, pressure and temperature have transformed these sediments intoa hydrocarbon-bearing rock, known as oil shale. In its natural state oil shale contains no liquid hydrocarbons. The hydrocarboncomponent can only be liberated by the application of heat. A retorting orheating process carries out the extraction of the hydrocarbon component. Thisinvolves the heating of the oil shale, which forces the decomposition of thekerogen and the release of hydrocarbons as a vapour. The hydrocarbon vapour,when cooled, becomes liquid oil and gas. Conventional oil is formed through a similar process, conducted over millions ofyears of deposition. Australia's known in situ oil shale deposits is around 30 billion barrels of oil*. Approximately, 20 billion barrels are located in ten deposits throughoutcentral Queensland close to infrastructure, a skilled workforce and portfacilities. The silica based deposits are much easier to heat or 'retort', thanthe more common carbonate shales found in other countries and are moreenvironmentally friendly to process. *As at 2002. This information is provided by RNS The company news service from the London Stock Exchange