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Message: Signs Farm-in Letter of Intent With Africa Oil
| May 28, 2009 |
| Raytec Signs Farm-in Letter of Intent With Africa Oil |
| VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 28, 2009) - Raytec Metals Corp. (the "Company" or "Raytec") (TSX VENTURE:RAY) is pleased to announce the signing of a farm-in letter of intent with Africa Oil Corp. ("Africa Oil") for entry into the production sharing contracts in both the State of Puntland, Somalia and the Republic of Kenya. Africa Oil is a member of the Lundin Group of Companies. Its management team is comprised of key personnel from Tanganyika Oil Company Ltd. which successfully developed a major heavy oil deposit in Syria and recently sold the company to Sinopec for $2 billion ($31.50 per share). In business for over three decades, the Lundins are leaders in identifying superior global investment opportunities in the natural resource sector. The Lundins recognize value and opportunity long before most others and their uninhibited pursuit of highly prospective properties has led to the development of several world-class ore deposits and oil and gas fields. In Puntland, Somalia, Africa Oil will transfer a 25% (twenty-five percent) license interest to Raytec in the Nogal and Dharoor Petroleum Production Sharing Agreements. The Nogal and Dharoor blocks encompass two highly prospective hydrocarbon basins and cover an area of 81,000 square kilometres or more than 20 million acres. The Nogal and Dharoor basins are considered world-class exploration plays with a petroleum system geologically similar to and formerly contiguous with those in the prolific oil producing Republic of Yemen which has estimated reserves of over 6 billion barrels. In Kenya, Africa Oil will transfer a 10% (ten percent) interest in the Block 9 Production Sharing Agreement and a 25% (twenty-five percent) license interest in its other interests in Kenya. In Kenya, Africa Oil holds a highly prospective land package including over 10 million acres in the Anza Basin. The Anza Basin is an extension of the major Sudan oil trend and a continuation of the Muglad Basin which has over 6 billion barrels of proven reserves and currently produces in excess of 450,000 barrels of oil per day. The terms of the farm-in and the schedule of the work programs to be carried out in 2009 and 2010 will be made available once the Letter of Intent has been finalized into a Formal Agreement. A finder's fee is payable on the transaction to Lockwood Financial Ltd. in consideration of introducing the parties to each other and facilitating the transaction. Brian Thurston, President of Raytec, commented, "I am pleased to announce this strategic transaction and welcome the opportunity to partner with one of the most respected names in the resource industry. The Lundin Group has been directly involved in the discovery and development of several major oil fields which has resulted in the creation of enormous value for their shareholders. The Lundin Group of Companies currently operates in over thirty different countries worldwide in the oil and gas sector as well as the mining sector. The Group has been highly commended by local communities and governments over the years for their efforts in developing a set of protocols that ensure issues of environmental and cultural concern are addressed as well as economic benefits and employment opportunities." Management and the directors of the Company would like to take this opportunity to thank Raytec shareholders for their continued support during the past several months while the Company focused on strategic partnering and acquisition opportunities. Management is currently dedicated to sourcing a strategic partner to advance its very prospective potash properties. In conjunction with the Africa Oil transaction, Raytec Metals Corp. has arranged a private placement for a total of up to 10 million units at a price of $0.30 per unit for total gross proceeds of up to $3-million. Each unit will consist of one common share and one non-transferable common share purchase warrant. Each warrant will entitle the holder to subscribe for one additional common share at a price of $0.50 for a period of two years from the date of closing. In consideration of its efforts, the finder of the financing will be paid a finder's fee of 5 per cent of the total proceeds raised under the offering payable in cash upon closing. In addition, the finder will receive warrants equal to 5 per cent of the offering. Each warrant will be exercisable into one common share of the Company for a period of two years from the date of closing at $0.50 per share. The funds raised from the issuance of the units will be used for the advancement of the Company's interest in the Africa Oil licenses and for general working capital purposes. This farm-in transaction is subject to TSX Venture Exchange acceptance, as well as approvals of the appropriate regulatory authorities from the Republic of Kenya and the Government of Puntland, Somalia. The private placement is also subject to TSX Venture Exchange approval. About Raytec: Raytec Metals Corp. is a well-financed, Canadian exploration company with over 180,000 acres of potash permits in Saskatchewan, Canada - the largest producing region for potash in the world. The Company holds approximately a 20 per cent interest in Sulphur Solutions Inc., an emerging fertilizer company developing state-of-the-art patented technology for the production of micronized sulphur fertilizer. The Company is further diversified with iron ore projects in Ontario, and uranium joint venture projects in the Athabasca Basin of Saskatchewan. About Africa Oil: Africa Oil Corp. is an oil and gas company with assets in Kenya, Somalia and Ethiopia. Africa Oil's East African holdings are in what is considered a truly world-class exploration play fairway. Africa Oil's total gross land package in this prolific region is in excess of 200,000 square kilometers - an area roughly the size of Great Britain. The East African Rift Basin system is one of the last of the great rift basins to be explored. New discoveries have been announced on all sides of Africa Oil's virtually unexplored land position including the major Heritage/Tullow Albert Graben oil discovery in neighbouring Uganda. Similar to the Albert Graben play model, Africa Oil's concessions have older wells, a legacy database, and host numerous oil seeps indicating a proven petroleum system. Good quality existing seismic show robust leads and prospects throughout Africa Oil's project areas. Africa Oil is listed on the TSX Venture Exchange under the symbol "AOI". On behalf of the Board, RAYTEC METALS CORP. Brian Thurston, President and CEO |
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