Ortac holds 26.99% stake in Andiamo Exploration Ltd, which holds the Haykota licence, prospective for copper and gold.
Ortac Resources Ltd (LON:OTC) shares surged over 7% as it hailed a potential 25% stake being taken in its Eritrea exploration partner Andiamo.
The AIM-quoted firm holds a near 27% stake in the latter, which holds the Haykota exploration licence, prospective for copper and gold.
In the summer, the Eritrean Government granted Andiamo an extension of 91 sq km to the license area to include ground known to host volcanogenic massive sulphide (VMS) targets.
Then in August, Environminerals East Africa (EEA), having spent around US$2.3 million on exploration, offered to exchange its joint venture interest in the JV license area for a 25% interest in Andiamo subject to conditions.
Ortac noted: “The transaction has not yet completed and potentially may not complete, but under the original terms might imply a value of approximately US$0.17 per Andiamo share; this could potentially value Ortac’s interest in Andiamo at approximately US$1.8 million.”
Ortac chief Vassilios Carellas noted that at the western VMS belt in Eritrea economic discoveries have recently been made by Nevsun Resources Ltd. (TSX:NSU, NYSE: NSU) just to the north of Andiamo’s license area.
“… it is encouraging to see EEA wanting to convert its JV interest into shares in Andiamo as this supports our belief that apart from the JV area, the rest of Andiamo’s exploration area is of material interest and could well deliver a discovery of significance.
“Although this transaction, if completed, would be at a 70% premium to the price paid by Ortac for its recent purchase of Andiamo shares in September, it is assumed that any new money raised by Andiamo may be at a level lower than this.”
Ortac shares gained 7.55% to 0.0285p in early deals.
