August 26, 2009 (FinancialWire) — Raytec Metals Corp. (TSX Venture: RAY) (OTC: RAYMF) said it has entered into a binding letter of intent to acquire Lion Petroleum Corp. in a share exchange deal.

Vancouver-based Lion is a privately held oil and gas exploration company with an exploration office in Nairobi, Kenya. Lion’s principal assets include two exploration Blocks in Northeastern Kenya.

Lion is party to production sharing contracts with the Kenyan government relating to the blocks.

Under the terms of the LOI, Raytec and Lion have agreed to enter into a business combination in which Raytec, or a subsidiary of Raytec, will acquire all of the 23,865,000 common shares issued and outstanding in the capital of Lion, for 28,399,350 common shares in the capital of Raytec to Lion.

In conjunction with the transaction, it is proposed that Minaz Devji, the president and CEO of Lion, become a director of Raytec, and then be appointed as chairman of Raytec’s board.

Vancouver-based Raytec Metals is an exploration company with a focus on the oil and gas industry in East and Central Africa. The company recently signed an agreement with Africa Oil that gives Raytec the right to earn an interest in five petroleum blocks located in the Republic of Kenya and in Puntland, Somalia.

The company also holds 14.76% interest in Encanto Potash, a junior potash exploration company, and has invested $6.5 million into a joint-venture to increase its holdings to around 29%.

Raytec holds a 20% interest in Sulphur Solutions, an emerging fertilizer company developing technology for the production of micronized sulphur fertilizer. Raytec also holds interests in a uranium joint venture project in the Athabasca Basin of Saskatchewan and an iron ore project in Ontario.

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