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Update: Obtala Resources unveils second share issue

Published: 10:05 08 Apr 2013 BST

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Obtala Resources (LON:OBT) has raised £295,000 after issuing new shares in another boost to its development plans in East Africa.

The company, which invests in and develops natural resources in Africa, has issued 4.38mln new shares at 6.75 pence each; trading in the newly issued shares is expected to start trading on April 9.

The first issue of around 4.37mln shares at 14.85p raised £650,000 for Obtala, with one more instalment still to come.

Francesco Scolaro, Obtala’s chairman, said in February: “Our group of companies remain debt free and we intend to use this funding to continue our move towards building a cash generating, highly attractive margin producing businesses .”

The company, which recently offloaded the majority of its shareholding in Bushveld Minerals for £13mln, will use the funds to develop both the forestry and agricultural assets in Tanzania and Mozambique to generate potentially significant revenue and profit streams.

Scolaro added that work continues on the recently acquired Magole Farm near Morogoro in Tanzania where the company intends to establish a horticultural business.

"A hydrogeology survey has been completed with water well drilling expected to commence in the next ten days.  The objective of building a sun-dried tomato enterprise remains on course with initial product expected in the third quarter of 2013.

"Discussions are currently in progress with two buyers operating in Europe and North America. Predictive yields of the final dried product are expected to be in the order of ten tonnes per hectare, with a total of ten hectares harvested monthly on a rotation basis once the project is operating at full capacity."

The 2013 logging season has also officially opened in Mozambique and the company has re-started the manufacturing of wooden railway sleepers for a private Mozambique registered company.

Scolaro said: "In spite of recent share price drops, I am extremely encouraged with the progress our company continues to deliver both in Mozambique and Tanzania.

“We remain committed to our investment in Paragon Diamonds and are supportive of the team and project in Lesotho.

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