News blog

Central China Goldfields / Obtala Resources

  • BY: Andrew Hore |
  • POSTED: 14/10/2009 |

Obtala Resources is building up a stake in Central China Goldfields.

Aim-quoted Obtala acquired an initial 5.25% stake in CCG on 22 September and this has been added to in recent weeks – taking it to 9.34%.

The CCG share price has almost doubled to 3.58p a share over the past month. CCG is valued at £6.56m. There was cash in the bank of £185,000 at the end of June 2009. That was before the sale of its Nimu copper project for RMB71m - payable in three tranches - during the summer. The total payable is equivalent to £6.6m but there is 35% tax to pay. That should leave £4.3m.

The first instalment of RMB21.3m - £1.95m - was paid in August. That should be £1.27m after tax.

Obtala has a good record of building stakes in Aim companies.

Obtala’s acquired a 29.4% stake in Kopane Diamond Developments earlier this year. The bulk of this stake – around 23% of Kopane - was bought in a share placing at 3.5p a share at the end of March 2009. Obtala chairman Francesco Scolaro became chairman of Kopane at that time.

During the first half of September Obtala raised £1.4m from the sale of 8m Kopane sharees at an average price of 17.6p a share. The original 23% stake cost £1.75m so Obtala has made the majority of its investment back already.

That leaves Obtala with 56.535m shares in Kopane – equivalent to 25.74%. That includes 32.2m shares held indirectly through a financial instrument held by Spreadex Ltd. This stake is valued at £7.77m at 13.75p per Kopane share. Obtala says it does not intend to sell more Kopane shares this year.

Obtala is focused on gold, nickel, uranium, iron ore, platinum and gemstones in Tanzania. Obtala joined Aim on 24 April 2008, when it raised £3.5m at 20p a share. The shares are currently trading at 21p each, which values Obtala at £40.5m. 

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