29 January 2013 12:38 [Source: ICIS news]
LONDON (ICIS)--African Potash on Tuesday revealed it has re-entered into an agreement to acquire an indirect 70% interest in La Societe des Potasses et des Mines S.A. (SPM) a company that holds the exclusive right to mining research activities for potash salts at Lake Dinga in the Republic of Congo.
In a statement, the London-headquartered firm said it will pay up to $15m (€11.1m) in shares and cash for the stake, with the deal coming several months after the company abandoned its original interest in SPM due to delays in the project obtaining the necessary permits from authorities in the Central Africa country.
"The project is surrounded by numerous potash development projects including the Sintoukola Potash Project, owned by Elemental Minerals Limited and the Mengo Potash Project, owned by Evergreen resources Holdings (BVI) Ltd following its acquisition of MagIndustries Corp," the statement added. "The project benefits from access to infrastructure and is less than 60km from the port of Pointe-Noire."
African Potash chairman and CEO, Edward Marlow, said: "The Lake Dinga Project is a highly attractive investment opportunity with considerable upside potential… [and is] located in a region which hosts world class potash projects such as Sintoukola and Mengo.
"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."
The deal is subject to shareholder approval at a general meeting on 21 February.
($1 = €0.74)
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