RANGE Resources is set to receive a previously undisclosed sign-on bonus believed to be worth $US3 million to $US7 million ($3.8 million-$8.9 million) as part of its joint venture deal with a Canadian company to explore for oil and gas in Somalia's Puntland state.

Range director Peter Landau, who visited Puntland last week, said it would share a portion of the funds with the government of the semi-autonomous state.

He said Range should receive the payment from Toronto Venture Exchange-listed exploration company Canmex Minerals within a few weeks. Under the farm-in deal, Canmex has six years to spend $US50 million on oil and gas exploration on Range's tenements in Puntland, in return for an 80 per cent stake in the project.

Range is retaining the mineral rights and offshore petroleum exploration rights as part of its 2005 deal, giving it exclusive exploration rights over the entire Puntland state.

Mr Landau said the fact there was a sign-on bonus in the joint venture deal was kept confidential because the final amount had not been finalised.

Earlier in the week, Calgary-based Canmex president Rick Schmitt told the Herald he "didn't want to even go close to telling what the commercial arrangements were" although he said the fee would be a material amount for Range and his company, which has a $C60 million ($55 million) market value.

Canmex had $C3.5 million cash and $C3.3 million in term deposits on hand at the end of September. Mr Schmitt said his company was confident it could raise the funds needed for the $US50 million exploration program. He cited the backing of Canmex's 13.6 per cent shareholder, Abalone Capital, which is linked to Sweden's Lundin Petroleum. Lundin, which has a market value of about $4.2 billon, is listed on the Stockholm Stock Exchange

Mr Landau cited the importance of Lundin's experience as a top explorer of "difficult countries" such as Iran, Sudan, the Democratic Republic of Congo and apartheid-era South Africa, as being key to the deal with Canmex.

But Range has not mentioned Canmex's link with Lundin in any of its statements to the Australian Stock Exchange. "We don't think it's relevant," Mr Landau said. "For us, the importance is the relationship with Canmex."

He said some investors would have been made aware of the Lundin-Canmex relationship through a story posted on subscription website Africa Intelligence last year.

Range is planning a dual-listing on London's Alternative Investment Market within the next two to three months. The listing will include a $US20 million capital raising, which Mr Landau said would be put towards buying out former partner Consort Private and further mineral and offshore petroleum exploration in Puntland.

The state has proven lead and zinc provinces but Mr Landau said Range would also look for uranium, which has so far only been found in the war-torn southern region of Somalia.

Despite the large joint venture deal, Range shares fell 0.1c to 3.2c after the announcement on Tuesday and closed at 3.4c on Thursday on volume of 26 million shares.

Source: http://www.smh.com.au/news/business/range-raises-38m-signon-fee/2007/01/28/1169919210570.html