Concession Contracts Executed

26 Apr 2005 10:00

Chaco Resources PLC26 April 2005 CHACO RESOURCES PLC ('Chaco' or 'the Company') London Stock Exchange - AIM Trading Symbol: CHP Chaco subsidiary: Amerisur SA - Concession Contracts executed in Paraguay •Amerisur S.A. has two hydrocarbon Concession Contracts totalling 2.3 million hectares under application in Paraguay •These have now been executed, triggering the allotment of 1,821,494 new Ordinary Shares to the Vendors •Further to favourable Presidential Decrees announced on 1 April, submission to the Paraguayan Congress for ratification is expected by next week The Directors of Chaco Resources plc are pleased to announce that two ConcessionContracts have been executed by the relevant Paraguayan Government Authoritieswith respect to applications by its Paraguayan subsidiary, Amerisur S.A., forhydrocarbon exploration and exploitation concessions in two significant acreagesin Paraguay, known as Curupayty and San Pedro. The two applications coverapproximately 2.3 million hectares in aggregate. In accordance with the Share Sale Agreement set out in Part IX of the Company'sAIM Admission document* dated 20 October, 2004, 910,747 new Ordinary Shares areto be allotted to the Vendors of Amerisur S.A. with respect to each ConcessionContract being so executed. Therefore a total of 1,821,494 new Ordinary Shares(the "New Shares") will be allotted and the Company will apply for the NewShares to be admitted to AIM on 29 April 2005. As announced on 1 April, a Presidential Decree has already been issued withrespect to these Concession Contracts, approving their submission to theParaguayan Congress for ratification and the promulgation of Concession Lawswith respect to each. The completion of this latter stage will result in theallotment of a further 16,393,442 new Ordinary Shares to the Vendors. The Directors have been advised that the Concession Contracts are likely to besubmitted to the Paraguayan Congress for ratification by the first week of May2005. Background Chaco Resources PLC is the successor company to Gold Mines of Sardinia. In 2004,the Company changed its strategy to one of pursuing hydrocarbon exploration anddevelopment opportunities in South America, focusing initially on Paraguay.Agreements were signed with two local companies, Amerisur SA and Bohemia SA,under which Chaco acquired preliminary rights to approximately 4.8 (sincereduced to 4.7) million hectares they together held under application. Forvarious reasons, the country has seen comparatively little exploration activityto date, but is of interest due to commercial extraction of hydrocarbons havingbeen made in adjoining countries from hydrocarbon basins which extend intoParaguay. On behalf of the Board of Chaco Resources PLCJohn MorrisManaging Director Enquiries:Martin Groak : 07949 209 301 (* The AIM Admission document can be viewed at, or downloaded from the"Corporate Information" section of our website: www.chacoplc.com) This information is provided by RNS The company news service from the London Stock Exchange