LNR Libra Natural

RNS Number:0685O
Libra Natural Resources PLC
18 December 2006


Press Release                                                   18 December 2006




                          Libra Natural Resources plc



                            ("LNR" or "the Company")



    Acquisition of majority interest in Princeton Co-Generation Corporation

                              Potential de-merger



The Board of Libra Natural Resources plc ("LNR" or the "Company"), the
AIM-quoted international green fuel development company, is pleased to announce
the acquisition of a 75% stake in Princeton Co-Generation Corporation ("PCC"), a
leading, profitable, Canadian waste wood fuel producer, for approximately C$4.0
million (c#1.80 million).

Consideration for the acquisition will be met as to c#900,000 from the Company's
cash resources and the balance of up to #900,000 from an issuance of new
ordinary shares to the vendors at a price of 12.52p per share.  The acquisition
is expected to be immediately earnings enhancing and is in line with LNR's
stated strategy to develop a significant presence in the rapidly growing
wood-to-energy sector.

The combination of PCC with LNR's existing Canadian wood pellet subsidiary,
Westwood Fibre Products Inc, will offer significant supply, transportation and
other synergies, and, with a combined current annual production of over 125,000
tons, will create one of the Top 5 North American producers.

Following the proposed acquisition of PCC, and in view of the rapid progress
made by LNR in building a significant presence in this rapidly developing niche
of the alternative energy market, the Board of LNR announces that it is
currently deliberating how best to maximise the opportunities available to its
expanded wood pellets operations, through the potential de-merger and separate
listing of the business.  As a first step in this process, LNR has entered into
Heads of Terms with Fortfield Investments plc ('Fortfield'- AIM: FIV), an
AIM-quoted investment company, which provides, inter-alia, for Fortfield to take
an initial stake in LNR's wood pellet operations and, subject to due diligence,
to acquire these operations from LNR through the issue of Fortfield equity to
LNR, thus achieving a separate listing of the division.

Commenting on the acquisition and potential de-merger, Peter Greensmith, Chief
Executive of LNR, said:  "As we have consistently said, LNR's single-minded
purpose is to identify and execute on a select number of alternative energy
investment opportunities which provide low-risk potential for rapid growth and
value creation.  However, the key to our strategy is not just to make
investments, but, through the pro-active deployment of LNR's financial,
technical and strategic resources, to deliver self-evident valuation enhancement
within a clearly defined time period.



Having demonstrated the success of this strategy with our Prometheus Energy
(AIM: PEC) investment, today's news should be viewed as more evidence of how
your Company is delivering on its promises.  The acquisition of a controlling
interest in PCC creates a major, profitable and international force in the wood
to energy marketplace.  We now believe we have the critical mass and market
position to enable us to move this business to the next stage of its
development.  To help the newly combined PCC/Westwood operations grow further,
to incentivise management and to provide investors with the opportunity to gain
exposure to a pure-play wood-2-energy business, we have determined to achieve a
separate stock market quote for our enlarged wood pellet division.

In assessing the merits of this potential de-merger, however, shareholders
should remain assured that valuation uplift, both immediate and longer-term,
will remain your Company's primary guiding principle".

Details of the acquisition of PCC

*          Founded in 1994 by its current management, PCC produces c70,000 tons of wood pellets on an
           eight acre facility located in Princeton, British Columbia, c100 miles from LNR's existing
           Westwood Fibre operations.  Fibre feedstock is principally sourced from a large regional
           saw mill, located adjacent to the facility.

*          In the year to February 2006, PCC had audited revenues of over C$10 million, EBITDA of
           C$1.3 million and Net Income of C$442,000.  In the eight months ended October 31 2006,
           based on un-audited management accounts, PCC  produced revenues of C$8.9 million, EBITDA
           of C$1.38 million and Net Income of C$940,000.

*          The aggregate consideration payable by LNR for its 75% stake will initially be C$4.0
           million (c#1.80 million).  #900,000 in cash is payable on completion (18 December 2006)
           and a further #900,000 is payable within 45 days of closure, via the issuance to the
           vendors of 7.04 million new ordinary shares in LNR at an issue price of 12.52p per
           ordinary share.

*          A further deferred payment of up to C$1 million in new LNR shares is payable to the
           vendors over the next two years based upon meeting pre-determined EBITDA targets for the
           periods ending December 2007 and December 2008.

*          Both the initial consideration shares and the deferred consideration shares allotted
           pursuant to the Acquisition will be subject to restrictions on their disposal.  Neither
           the initial consideration shares nor any deferred consideration shares may be disposed of
           by any of the PCC vendors for a minimum period of six months from their respective
           allotments.

*          LNR has entered into post-acquisition arrangements with PCC's existing executive
           management to provide continuity of management for the Princeton facility.



Details of the potential de-merger

*          LNR has entered into conditional Heads of terms with Fortfield, under which both parties
           have agreed to co-operate with one another to secure the implementation of a sale of LNR's
           wood pellet division to Fortfield, via the issuance of new ordinary shares in Fortfield to
           LNR.

*          The de-merger is subject to the satisfactory completion of mutual due diligence by LNR and
           Fortfield, which both parties will initiate immediately with a view to completing within a
           period of 45 days.  Additionally, as the proposed acquisition will constitute a reverse
           takeover for Fortfield under the AIM Rules, final completion will be conditional on
           Fortfield shareholders' approval.

*          LNR has secured the co-operation of its 25% minority partner in Westwood Fibre and PCC, The
           Tetreau Group of Calgary, Canada, such that, subject to the successful completion of the
           proposed sale of LNR's interests to Fortfield, the Tetreau Group will simultaneously sell
           its minority stakes to Fortfield on identical terms and conditions as will apply to LNR.

*          As part of the proposed arrangements with Fortfield, Fortfield has agreed to purchase from
           LNR a stake in LNR's Canadian subsidiary, Fibre Canada Holdings PCC, Inc, for C$500,000 in
           cash (#227,000).  Arrangements are in place for this purchase to be unwound in the event
           that the sale of LNR's wood pellet division to Fortfield does not proceed within the first
           quarter of 2007.







LNR's strategy

Your Board believes that the acquisition of PCC and the resultant creation of a
major international force in the wood-to-energy market, represents further
evidence of your Company's ability to engender meaningful, value-creative,
growth in its investment portfolio.

Furthermore, along with the recent successful AIM-listing of Prometheus Energy,
today's news of the proposed de-merger of our wood-to-energy division, is
signaling your Company's confidence in the real, fundamental value of its
portfolio, and its determination to provide the markets with the transparency it
requires to adequately reflect this in our share price.

We intend to move forward aggressively with a similar growth-orientated, market,
strategy with our waste coal business, which has moved into production this
quarter.

Additionally, it is your Board's intention to make a further series of select
investments in businesses within the alternative energy marketplace, which meet
our very tight investment criteria, including exclusivity, no technology risk
and cash-generation.  Businesses under active review currently are in areas such
as biofuels technology, water treatment and carbon sequestration.

The Board believes that LNR shareholders can look forward confidently to the
future.  From relatively modest initial investments, your Company is building a
series of valuable and meaningful stakes in a growing number of international,
quoted, companies within the alternative energy sector.  We intend to continue
to support and help grow such investments, whilst moving forward with confidence
to the next generation of opportunities.

                                    - Ends -

For further information:
Libra Natural Resources plc
Peter Greensmith, Chief Executive                      Tel: +44 (0) 20 7877 5052


Teather & Greenwood
Gareth Price / Simon Brown, Corporate Finance          Tel: +44 (0) 20 7426 9000



Media enquiries:
Abchurch
Heather Salmond / Franziska Boehnke                    Tel: +44 (0) 20 7398 7700
heather.salmond@abchurch-group.com                        www.abchurch-group.com



Notes to Editors



Libra Natural Resources plc is a company which invests in, or acquires,
commercialised assets, businesses or companies involved in the alternative
energy sector.  The Company listed on the AIM market of the London Stock
Exchange in March 2005.  Libra's successful green fuel strategy currently
concentrates on three waste-to-energy concepts: waste coal, waste wood and waste
gas.





For further information on the Company, please see www.lnrplc.com




                      This information is provided by RNS
            The company news service from the London Stock Exchange
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