2015-06-15) Obtala Resources outlined plans to increase its timber land holdings by 13% in Mozambique through buying two new license’s and revealed it plans to divest its forestry division there.
The two 50 year leases, subject to government approval, total 35,000 hectares and will bring the group’s total area in the country to 314,965 hectares.
Obtala has hired Honour Capital, a specialist forestry advisory and management Company, to carry out a valuation review on the new blocks.
Last summer, the group attributed a NPV (net present value) to Obtala’s timber business of US$161mln at a 12% discount based on a 10 year cash flow model.
Obtala chairman Francesco Scolaro said: “We are dedicated to making the timber operations a great success in Mozambique where we have built a highly efficient operational platform over the past few years.
“The additional land holdings provide security that we can achieve higher production levels. In tandem, we are making a capital injection to increase and improve our operational capacity and offer a wider range of timber products to the growing local market.
He added: “The board of Obtala has also agreed a strategy to divest the forestry division thereby recognizing its true value and to grow the business in Mozambique more expeditiously. We will provide further updates to shareholders in due course.”
The logging season started again in April, said Obtala, and the group is supplying processed timber to Mozambican based construction companies for the rapidly expanding housing market, which is forecast to grow over the next few years.
Therefore, the firm does not plan to export any timber this year.
Negotiations continue with respect to the potential participation of the timber opportunity in Brazil and contract logging in Mozambique, Obtala added.
FRANCESO “FRANK” SCOLARO PROFILE
Mr. Francesco Scolaro, also known as Frank, LLB served as the Executive Chairman of Paragon Diamonds Limited from January 17, 2012 to December 2012. Mr. Scolaro is a Lawyer. He serves as the Chairman of Obtala Resources Limited and Grandinex International Corp. He served as an Executive Chairman of Paragon Diamonds Limited until June 20, 2011. He served as Non-Executive Chairman of Firestone Diamonds since September 2010. He served as Non Executive Chairman of Kopane Diamond Developments plc since March 30, 2009. He served as a Non-Executive Chairman of Regal Petroleum Plc from October 9, 2006 to November 22, 2007. He has been a Non-Executive Director of Sierra Leone Diamond Company Limited since July 21, 2005. He serves as a Director of Monte Cristo Investments Limited; Avvenimenti Turistici Italiani Limited and Funteam Leisure Limited Mintbuy Limited. He has been a Director of Obtala Resources Limited since December 20, 2007. He served as a Director of Paragon Diamonds Limited from January 17, 2012 to December 18, 2012. Mr. Scolaro served as a Non-Executive Director of Regal Petroleum Plc from June 16, 2006 to March 2008 and African Minerals Limited from July 21, 2005 to July 23, 2007. He served as a Director of until June 20, 2011. Mr. Scolaro qualified as a Barrister in 1988 and has pursued a career as an active investor in publicly quoted companies in the resource, leisure and property sectors. (Bloomberg)
Source: Proactive Investors
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