Zooming into the Past

Range gains rights to all minerals in Puntland

Ralph Wragg Australian Business News

October 05, 2005

Sydney - Wednesday - October 5: (RWE Australian Business News) - Range Resources Ltd (ASX code: RRS) has entered a conditional heads of agreement to acquire a 50.1 per cent interest in the sole and exclusive rights to all mineral and hydrocarbon exploration and development in the Somali state of Puntland, which covers an area of 212,000 sq km.

The company views Puntland as one of the last underexplored countries in the world that has high potential for vast reserves of hydrocarbons and other minerals.

During the late 1980s the state was divided into a number of concessions for oil exploration.

Significant exploration was undertaken but this effectively ceased due to political instability in the early 1990s.

Range considers the political situation in Puntland to be stable (democratic elections January 2005) and notes the state does not experience the "political unrest" affecting Mogadishu and the southern half of Somalia.

The mineral potential of Puntland has yet to be mapped, tested and exploited.

Range believes large deposits of iron ore, coal and base metals could be identified.

Under the agreement, Range will manage all exploration programs and enter farm-in or joint venture arrangements with third parties in order to fully exploit the exploration potential of Puntland.

Out of Africa and far, far left field

Robin Bromby

The Australian

October 07, 2005

Exploration

OF all the thousands of mining exploration companies in all the world, big and small, Range Resources has been tapped on the shoulder to control the as-yet unknown oil, gas and mining resources of Puntland.

It sounds like an apt name for the Australian junior to go looking in -- a semi-autonomous state in northeastern Somalia, which is trying to govern itself and restore an economy badly affected by last year's tsunami.

Puntland President Mohamud Muse Hirsa and his Government have no aspirations towards independence, but seek to be part of a federal Somali state if law and order ever return to the south of the country -- and, in particular, the capital Mogadishu.

Ancient Egyptians told of a Land of Punt in the area now known as Somalia. The story of Range's involvement is no less fascinating. Executive director Jim Marinis said he was not sure why Range was chosen, or even whether it was the first choice.

The initial feeler was through the humanitarian organisation, Kids in Need (part of World Vision), that was trying to help Puntland get some economic activity started. Mr Marinis said contact was made with Range through "connections" and the deal negotiated through lawyers in Australia and England.

Yet Range has never had direct dealings with the company set up by Puntland authorities to control the territory's resources, and Mr Marinis said he knew little about Consort Private apart from the fact that its directors included government ministers. "I don't know who the directors are."

Range will take a 50.1 per cent interest from Consort in all the hydrocarbon and mineral resources of the 212,000sqkm territory controlled from the town of Garowe.

Range will pay Consort an initial $US1.5 million ($2 million) for the 50.1 per cent interest, with further payments totalling $4.4 million, along with 85 million Range shares and options.

Mr Marinis said Range's role would be to assess the exploration potential of Puntland and then farm out prospects to large mining and oil companies.

So Range, whose shares were selling at 3c yesterday, expects to be soon sitting across the negotiating table from the likes of Shell, Conoco and Phillips Oil.

He said Range was not concerned about Somalia getting its house in order, adopting a national government that could overrule decisions made by the Puntland authorities. "That will take many years to come -- it's many, many years away."

The potential is promising. Agip, Shell, Amoco and others have drilled around the Horn of Africa but most data had been destroyed, the company said. But there's known iron, manganese, tin, lead-zinc and copper deposits.

Range is working on a capital raising to get people on the ground in Puntland. "We need to go there and start geological testing," Mr Marinis said.

Range wins rights to Land of Punt

Jamie Freed

The Sydney Morning Herald

October 07, 2005

Junior explorer Range Resources pinned its hopes on Somalia's Democratic State of Puntland yesterday, signing an agreement that gives it exclusive mineral and oil and gas exploration and development rights in the semi-autonomous state.

Range said it would fund the deal through a $3.45 million non-renouncable 1-for-2 rights issue at 1.5c each.

Executive director Jim Marinis said his company would initially focus on oil and gas exploration, although there was also hope of finding copper, iron ore, manganese, tin and other metals.

Conoco-Phillips and Shell conducted exploration and drilling in the state in the 1980s and early 1990s but the programs were abandoned and the exploration data destroyed after the Somali government was ousted in 1991 and the country descended into famine and tribal warfare.

Range will have a 50.1 per cent interest in all projects and is looking to draw multinationals like Conoco-Phillips and Shell back into the country as farm-in partners and operators.

Range believes the political situation in Puntland, a semi-autonomous state in the country's north-east, near the Horn of Africa, is stable enough to draw investment to the region.

"The state does not experience the 'political unrest' currently affecting Mogadishu and the southern half of Somalia," Range's release to the stock exchange said.

But the Australian, British and US governments all have strict warnings in place against travel to all regions of Somalia and none maintain an embassy there.

The CIA's World Factbook reports that Puntland disputes its border with the neighbouring self-governing province Somaliland and has suffered "civil strife", while the US State Department says "serious fighting" has occurred in the state.

A 15th century BC visit to the Land of Punt, generally believed to be Somalia, by the Queen Hatshepsut of the 18th Dynasty is recorded on the queen's mortuary temple opposite Thebes.

Mr Marinis has not visited Puntland, reputedly having signed the agreement with the state's government in Dubai. But executive chairman Michael Povey toured the state in April and did so without armed guards, Mr Marinis said.

"There is definitely no civil unrest," Mr Marinis said.

Range is now establishing a workforce of Australians, other expats and Somalis and expects to begin exploration by the end of the month.

Nearly one-quarter of Range's shares changed hands yesterday. They closed 0.4c higher at 3c.

BUSINESS INTELLIGENCE

Puntland's mining potential

The Indian Ocean Newsletter

October 15, 2005

Range Resources, headed by the mining engineers Michael Povey, a former employee of Rio Tinto and JCI, and Jim Marinis, is active in gold and uranium mining in Australia and Peru. Last month, the firm acquired 51% of the agreement Consort Private Ltd, the firm owned by Terry Donnelly and Anthony Black, had negotiated with the government of Puntland (ION 1151). Under the terms of this agreement, Range and Consort were the sole companies entitled to explore and work Puntland's mineral resources.According to Range, in additional to the potential oil reserves, Puntland's underground, already briefly explored by a team of geologists from Bulgaria in the 1970s, bears a large variety of mineral ores. Copper is believed to be present in the northern region of the province, around Bossaso, iron, manganese and tin ore in the North East, near Madjayan and Dalan, as well as uranium in the region of Mudug.

To become its partner in Puntland, Range paid Consort $1.5 million and is to pay a further $1 million when the shareholders have approved the deal. Subsequently, Range is to pay Consort a monthly fee of $200,000 and has attributed its two directors 85 million shares in the company, listed on the Australian Stock Exchange since last year.