Completion of Acquisition (0325D)
May 10 2012 - 2:00AM
UK Regulatory
TIDMCZA
RNS Number : 0325D
Coal of Africa Limited
10 May 2012
ANNOUNCEMENT 10 May 2012
Acquisition of Rio Tinto and Kwezi's South African coal assets
completed
"Transaction strengthens Coal of Africa's position as one of the
most substantial holders of prospecting and mining rights for
coking coal in South Africa's Soutpansberg coalfield," says CEO
John Wallington.
Coal of Africa Limited ("CoAL" or "the Company"), the coal
exploration, development and mining company operating in South
Africa, is pleased to advise that the consents, required under the
Section 11 of the Mineral and Petroleum Resources Development Act
("Section 11 consents"), have been granted by the Minister of
Mineral Resources in respect of the sale of shares by Rio Tinto
Minerals Development Limited ("RTMD") and Kwezi Mining
(Proprietary) Limited (collectively "the Vendors") in both Chapudi
Coal (Proprietary) Limited ("Chapudi") and Kwezi Mining and
Exploration (Proprietary) Limited ("KME") to Keynote Trading &
Investment 108 Proprietary Limited ("Keynote"). Keynote is a
subsidiary of the Company, with a recently constituted Board of
Directors and Rothe Investments as the 26% Black Economic
Empowerment ("BEE") shareholder. Chapudi and KME hold the
prospecting rights for the Chapudi Coal Project and related
exploration properties in South Africa's Soutpansberg coalfield in
the Limpopo Province, (collectively, the "Chapudi Coal Assets").
The Section 11 consents relate to the transfer of an interest or
control in a mining or prospecting licence holder.
Coal of Africa CEO John Wallington commented that, "The granting
of the Section 11 consents by the Minister concludes the regulatory
steps to complete the acquisition of the Chapudi Coal Assets,
strengthening Coal of Africa's position as one of the most
substantial holders of prospecting and mining rights for coking
coal in the region. The transaction provides significant scale and
optionality in the planning of future mining projects, and will
enable the consolidation of several contiguous tenements in the
Soutpansberg coalfield. The detailed planning and technical work
required as part of this process has commenced with our partners,
while the reserve and resource calculations of these newly-acquired
coal assets are being evaluated and a further update will be issued
to the market in due course."
Mashudu Ramano, Chairman of Rothe Investments noted that, "We
will seek to develop these assets responsibly, and in the interests
of all stakeholders. The consolidation of the various tenements
will provide further long-term potential for the economic
development of this region. Communities in close proximity to
Chapudi hold a 40% interest in Rothe, the structure of which will
be finalised in consultation with the relevant communities, making
this a truly broad-based BEE project."
As advised in the report for the quarter ended 31 March 2012,
and released on 30 April 2012, the original share purchase
agreement ("the Original SPA") was amended to allow for the sale of
equity and the sale of shareholders' claims to close separately
(the "Amended SPA"). This amendment facilitated the application by
the vendors for South African Reserve Bank ("SARB") exchange
control approval for separate payment in respect of the sale of the
equity and shareholder claims. In anticipation of a longer period
to obtain approval for the settlement of the shareholder loans, the
priority for the Vendors, the Company and Keynote was to close the
equity sale.
In line with the Amended SPA, the date for the fulfilment of the
conditions precedent for the sale of the equity was extended from
30 April 2012 to 31 May 2012. The date for the fulfilment of the
conditions precedent for the sale of the shareholder claims was
extended from 30 June 2012 to 31 July 2012. The purchase
consideration remains US$75 million in aggregate, of which a $2
million deposit has been paid. SARB exchange control approval for
the sale of the equity was received in early April 2012 and having
satisfied the remaining conditions precedent, final closing of the
transaction is expected to occur on 11 May 2012 following
settlement of the first tranche of the purchase consideration due
under the terms of the Amended SPA.
On closing, Keynote will take ownership of the equity and pay
the first tranche of the purchase consideration of US$29,357,545 to
the Vendors. Upon granting of exchange control approval by the SARB
in respect of the shareholder claims, the remaining amount due
under the first tranche of US$13,642,455 is payable by the Company
to RTMD. The second tranche of $30 million will become payable
either on the receipt of a New Order Mining Right ("NOMR") on any
of the properties that form part of the prospecting area in any of
the New Order Prospecting Rights ("NOPRs"), or two years from the
date upon which the conditions precedent are fulfilled, whichever
transpires earlier.
For more information contact:
John Wallington Chief Executive Officer Coal of Africa +27 11
575 4363
Wayne Koonin Financial Director Coal of Africa +27 11 575
4363
Shannon Coates Company Secretary Coal of Africa +61 89 322
6776
Sakhile Ndlovu Investor Relations Coal of Africa +27 11 575
6858
Reuben Govender JSE Sponsor J.P. Morgan Equities Limited +27 11
507 0430
Charmane Russell/Jane Kamau Financial PR (South Africa)
Russell
& Associates +27 11 880 3924/
+27 82 372 5816
Jos Simson/Emily Fenton Financial PR (United Kingdom) Tavistock
+44 20 7920 3150
Chris Sim/Jeremy Ellis/Neil Elliot Nominated Adviser
Evolution Securities +44 20 7071 4300
www.coalofafrica.com
About CoAL:
CoAL is an AIM/ASX/JSE listed coal exploration, development and
mining company operating in South Africa. CoAL's key projects
include the Vele Colliery (coking and thermal coal), the Makhado
Project (coking coal) and the Mooiplaats and Woestalleen Collieries
(both thermal coal).
The Mooiplaats Colliery commenced production in 2008 and is
currently ramping up to produce 2 Mtpa. The Woestalleen Colliery,
acquired through the acquisition of NuCoal Mining (Pty) Limited in
January 2010, currently processes approximately 2.5Mtpa of saleable
coal for domestic and export markets. The Woestalleen Complex also
incorporates three beneficiation plants with a total processing
capacity of 350,000 run-of-mine (ROM) feed tonnes per month.
CoAL's Vele Colliery started commercial production in Q1 2012.
During the initial phase, the operation is targeting 2.7 Mtpa ROM
production to produce 1.0Mtpa of saleable coking coal. The Makhado
Project, CoAL's flagship project in the Soutpansberg coalfield, is
well into the feasibility stage, with a Definitive Feasibility
Study having been reviewed by the CoAL Board in March 2012. An
application for a New Order Mining Right for the Makhado Project
was submitted in January 2011.
In November 2010, CoAL agreed to acquire the Chapudi coal
project and several other coal exploration properties in the
Soutpansberg coal basin in South Africa from the previous owners,
including Rio Tinto. The acquisition of the Chapudi Coal Assets
strengthens Coal of Africa's position as one of the most
substantial holders of prospecting and mining rights for coking
coal in South Africa's Soutpansberg coalfield.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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