Managing Director and CEO Max de Vietri said the capital raising would position Baraka as a significant player in West Africa’s oil and gas sector.

“The placement will provide us with sufficient capital to progress the Mali projects held by the Company through to 2008 and provide us with options for joint venture contribution to the development of Block 20,” he said.

“At the same time we will maintain our strategy of preserving capital while maximising exploration expenditure on our exploration tenements through farm-outs and joint ventures.”

In addition to the placement agreement, the Royal Bank of Canada will also manage a facility to purchase up to 50 million maturing escrow shares from Baraka shareholders released this week.

Baraka deputy chairman Shane Doherty said the capital raising was an opportunity for the company to broaden its share register, by in introducing new institutional and international investors in Australia, Asia, Europe, the United Kingdom, USA and Canada.

“We expect this capital raising will be successful in introducing significant retail and institutional investors, from Australia and overseas, that are prepared to support the stock,” he said.

Doherty said the trading of maturing escrow shares was intended to alleviate potential residual market over-hang in the market.

The $35 million share placement is subject to shareholder approval at a general meeting scheduled for June 15.