25 May 2012

Obtala takes £2.5m tin stake 

23/02/2011 Robert Tyerman

Entrepreneur Frank Scolaro's Obtala Resources (OBT) has paid $4 million for half of private South Africa-focused tin developer Greenhill Resources. The money, paid in staggered payments, should help Guernsey-registered Greenhills take its Mokopane tin project in the mineral-rich Bushveld complex north of Johannesburg, into production in the first half of next year.

The deal will give AIM-quoted Obtala an indirect 37 per cent of Mokopane, where Greenhills has already identified a potential resource of 3,400 tonnes of open-pittable tin near the surface. Steered by mining consultant and project manager Fortune Mojapelo and mining financier Anthony Viljoen, Greenhills has also spotted five further targets, with an estimated potential to take the project to 20,000 tonnes.

Chairman Scolaro argues Obtala can now benefit from tin's 'extremely favourable' present market fundamentals. He suggests this deal will be 'transformational' for the company, which recently bought a chunk of fellow AIM counter Goldstone Resources.

Observers believe Obtala, whose Paragon Diamonds gem spin-off has proved an AIM winner, now has other sizeable asset acquisitions in its sights. Up from a 27p year's low to 49.25p, valuing the company at £110 million, the shares are still likely to outperform.

Tags: Frank Scolaro, Greenhill Resources, Obtala

Sector: Mining

Companies: Obtala Resources

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