Africa Oil Corp

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Raytec brings Encanto holdings to 14.76%


2009-08-24 16:36 ET - News Release

Mr. Brian Thurston reports

RAYTEC FINALIZES AGREEMENTS WITH ENCANTO POTASH CORP. AND ACQUIRES SHARES

Raytec Metals Corp. has closed its previously announced transactions with Encanto Potash Corp. Raytec has transferred all of its interests in its potash properties in Saskatchewan to Encanto's operating subsidiary in exchange for 19,846,525 common shares of Encanto, at a deemed total value of 25 cents per share ($4,961,631 in total). As a result, Raytec now owns 19,846,525 common shares of Encanto representing approximately 14.76 per cent of the common shares of Encanto. Raytec has acquired the common shares of Encanto for investment purposes.

Raytec will also incur $6.5-million in expenditures on Encanto's existing potash properties and Raytec's potash properties by Dec. 31, 2009, to earn a 51-per-cent interest in the potash properties. Encanto will have the option to repurchase the 51-per-cent Raytec interest in the potash properties for 26 million common shares of Encanto. If this option is exercised, Raytec will own a total of up to 45,846,525 shares of Encanto which will be equal to an estimated 28.57 per cent of Encanto's issued shares based on its current issued share capital.

The company will file a report describing the above transactions with applicable securities regulators, a copy of which will be available under the company's profile on SEDAR. For further information, or to obtain a copy of the early warning report, please contact Brian Thurston, president and chief executive officer, at 604-688-6410.