Interesting and very positive deal struck with Red Sky and quite...

Interesting and very positive deal struck with Red Sky and quite timely for that matter. I know many of you are saying Red Sky is a micro cap and the deal is not that significant however there’s alot more to this than what you can see on the surface.

Although Red Sky is not a major industry player, this deal has significant corporate and strategic benefits beyond simple funding contributions. Put simply, Red Sky with a minimum 10% stake have bought themselves a vote at operations committee meetings thus removing the “deadlock” previously held by BG. With this new farm out in place over the broadacre permits, negotiations towards drilling programmes can now move forward in a positive manner as the voting table is more balanced. BG’s commitment (or lack there-of) has been one of the governing reasons why a firm programme had not been agreed upon and drilling had not yet commenced.

Another positive aspect to the deal with ROG is that Rohan is proactive and ambitious towards development in central Australia having previously signed agreements with CTP via EIR, and earlier on GSG with PXA. He also has a proven capacity in the sector and is not purely a venture capitalist like the former MPS/PXA boys. This will give comfort that development proposals are expedited in a timely manner with a longer term strategic view in place. Where ROG attains the funding will be interesting as they only recently completed a $4m placement for the Cydonia acquisition. Quite possibly another placement or financial instrument is in the works.

All in all the ROG agreement is a positive transaction for the CTP board to have achieved. A realistic drilling programme seems more likely and, CTP may no longer have to sole risk aspects of the campaign.