CityView on verge of Petro African agreement

Perth-based oil and gas exploration company CityView Corporation Ltd is on the verge of entering into a joint venture agreement with Johannesburg-based Petro African Energy plc.

Under the terms of the proposal, the company will acquire a 30 per cent interest each in both the Longonjo uranium project and the Ucwa beryllium project, for an allotment of 20 million new CityView shares. The company believes the projects, both in Angola, will place it in a strong position for the acquisiton of further interests there.

Earlier this year, the company had issued over 80 million shares in the hope of raising $3.2 million in order to retire debt and improve working capital, but was only able to make $2.2 million, or 69 per cent of its target. The shortfall was placed with underwriter Patersons Securities Limited.

A full statement, issued by CityView, is pasted below

JOINT VENTURE WITH PETRO AFRICAN
CityView advises that negotiations are reaching conclusion for CityView's entry into the Longonjo uranium project and the Ucwa beryllium project. Dr Michael Smith, FIMMM, C.Sci, C.Eng has advised CityView: "Based on the author's experience of licence values in Angola, work done to date, the activities of his own group and current trends, an opinion of minimum value can be given. In the author's opinion, the minimum value of the interest available in both licences is not less than US$20 million. It is believed that a VALMIN study of the data will yield a figure in excess of this and the ultimate value, based on the work programmes envisaged is considerably in excess of this".
It is proposed that CityView will acquire a 30% interest in both of the projects for an allotment of twenty million new CityView shares. The other 70% interest will be held by Petro African Energy plc ("Petro African") controlled by a Black Power group based in Johannesburg.
A seven months work program has been agreed between CityView and Petro African with each party contributing on a pro-rata basis: Petro African 70% and CityView 30%. The total program budget is US$1,415,000 and will test all four targets, initially through geochemical sampling and then follow-up drilling. Upon completion of this program a resource estimate will be prepared together with an updated valuation. CityView's director Mr John Jacoby is being appointed to the operating committee and will be actively involved in supervising the program.
CityView will make a contribution of US$500,000 towards the past work program which has been carried out on the projects. This comprised integration of maps and data into a digital database, satellite imaging interpretation, aerial photo and topography study, ground reconnaissance, target definition and licence fees.
Having established an alliance with Petro African, CityView believes that it will be in a strong position to acquire further interests in Angola, and in particular participation in an onshore oilfield.