African Potash re-enters agreement to acquire interest in Republic of Congo

African Potash, an AIM-listed African exploration company, said Tuesday that it has re-entered into an agreement to acquire an indirect 70 per cent interest in La Societe des Potasses et des Mines (SPM), which holds the exclusive right to conduct mining research activities for potash salts over the Lake Dinga Project in the Republic of Congo.

African Potash, an AIM-listed African exploration company, said Tuesday that it has re-entered into an agreement to acquire an indirect 70 per cent interest in La Societe des Potasses et des Mines (SPM), which holds the exclusive right to conduct mining research activities for potash salts over the Lake Dinga Project in the Republic of Congo.

The total maximum consideration for the acquisition will $15m, which will be satisfied by the issue of $12m-worth of new ordinary shares, and $3.0m cash.

The transaction was previously terminated as a result of "significant delays" in to the granting of the permis de recherches, meaning certain conditions could not be satisfied.

SPM has since been granted the formal permis de recherches for the project by the Republic of Congo.

The company is also proposing the appointment of Jean-Pierre Conrad as Chairman, although this remains subject to approval by shareholders. The company said he has extensive experience in the resources industry in addition to a solid background in the financial markets.

African Potash Chairman and Chief Executive Officer, Edward Marlow, said: "The board is confident that the Lake Dinga Project is a highly attractive investment opportunity with considerable upside potential. I am therefore delighted to announce our re-entry into an agreement to acquire an indirect 70% interest in the project, following the formal grant of the Permis de Recherches to SPM.

"The outlook for commercial potash exploration remains highly positive, with rising population and growing affluence in developing countries leading to ever increasing demand for agricultural produce.

"With potash being a key constituent in fertiliser, the pressing need to develop quality potash assets is expected to continue for many years to come, creating a significant opportunity for an investment company such as African Potash to identify and develop projects, and in so doing delivering significant shareholder value."

The share price rose 12.50% to 3.38p by 15:01.

NR

Recommended

Share tips of the week – 24 September
Share tips

Share tips of the week – 24 September

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
24 Sep 2021
Three strong Asian stocks trading at bargain prices
Share tips

Three strong Asian stocks trading at bargain prices

Professional investor Nitin Bajaj of the Fidelity Asian Values investment trust picks three stocks that dominate their industries, earn good returns o…
20 Sep 2021
Why it pays to face up to your investment mistakes
Investment strategy

Why it pays to face up to your investment mistakes

Buying stocks can be a complicated business. But selling stocks can be tricky, too – even if you sell for the right reasons. Max King explains how to …
17 Sep 2021
Share tips of the week – 17 September
Share tips

Share tips of the week – 17 September

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
17 Sep 2021

Most Popular

A nightmare 1970s scenario for investors is edging closer
Investment strategy

A nightmare 1970s scenario for investors is edging closer

Inflation need not be a worry unless it is driven by labour market shortages. Unfortunately, writes macroeconomist Philip Pilkington, that’s exactly w…
17 Sep 2021
Two shipping funds to buy for steady income
Investment trusts

Two shipping funds to buy for steady income

Returns from owning ships are volatile, but these two investment trusts are trying to make the sector less risky.
7 Sep 2021
What really causes inflation? Here’s what prices since 1970 tell us
Inflation

What really causes inflation? Here’s what prices since 1970 tell us

As UK inflation hits 3.2%, Dominic Frisby compares the cost of living 50 years ago with that of today, and explains how debt drives prices higher.
15 Sep 2021