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October 23, 2009

Investment firm raises US$5.1 million to develop cattle ranching business in Mozambique

Agriterra has secured more funds for the expansion of its cattle ranching and feedlot production business in Mozambique via an equity placing, raising US$5.1 million. The placing of almost 64 million shares represented 11.9% of the enlarged share capital.

The Channel Islands-headquartered agricultural sector focused investor is looking to extend the 1,000 ha (hectare) Movonde Stud Ranch and develop and stock the recently acquired 20,000 ha Dombe Ranch with pedigree Beefmaster breeding livestock imported from South Africa. Agriterra is planning a substantial expansion of its herd, aiming to increase it to 10,000 from the current 720 over the next three years.

The proceeds of the placing will also be used to construct an abattoir and feedlot business on the recently acquired 200 ha property in the environs of Chimoio to help the company reach its goal of growing a cattle ranching business capable of processing 5,000 head of cattle annually over the next two years.

“The construction of a feedlot business and abattoir in the vicinity of both of our current ranches provides us with the ability to rapidly expand our cattle business without the additional costs associated with transport of feed or animals. In conjunction with this, costs will be further controlled by way of integration with our maize business at Chimoio, as the bran residue which is a by-product of milling makes ideal cattle feed,” said Chief Executive of Agriterra Andrew Groves.

The company said operations at Chimoio achieved a record buying season with a total 34,000 of maize purchased from local growers, while Agriterra’s second maize processing facility at Tete has acquired 7,000 tonnes of maize since commencing operations in May this year.

Agriterra recently aborted the takeover of palm oil developer Equatorial Biofuels Limited for US$2.5 million in cash and 110 million shares. The company simultaneously announced the appointment of Euan Kay, who has managed Agriterra’s subsidiary Desenvolvimento E ComercializaĆ§Ć£o Agricola Limitada ('DECA'), to the Board as an Executive Director.

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