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Alara Resources expands Omani portfolio with Awtad project stakes

Alara Resources Ltd. said March 1 that its Alara Oman Operations Pty. Ltd. signed an agreement to acquire up to a 70% interest in Awtad Copper LLC and its Awtad copper project in Oman.

Alara will secure an initial 10% stake based on its previous contributions to the Awtad project, amounting to about 246,000 Omani rials. The company will then continue to fund further exploration and development costs until its expenses reach US$1.5 million, entitling Alara to raise its Awtad stake to 51%.

Alara's stake will increase to 70% after it completes a definitive feasibility study on the project. Following Alara's final earn in, Awtad shareholders will have to contribute any required funding in proportion to their respective interests or have their stakes reduced. If a shareholder's stake falls below 10%, this interest will be assigned to other shareholders in exchange for a 2% net smelter return over the Awtad project.

Awtad shareholders are entitled to a one-off option to maintain their stakes at 49% should a threshold resource of 20,000 tonnes of contained copper or more be delineated within the project area until the date Alara completes its 51% earn-in. Alara will be entitled to appoint two members to Awtad's board and appoint the company's chairman and managing director. The remaining two board seats will be filled by local Awtad shareholders.

The deal remains subject to certain conditions, including Awtad renewing the exploration license and settling liabilities owed to its current shareholders.

As of March 1, US$1 was equivalent to 0.38 Omani rial.