Coal of Africa Limited Rio Tinto Chapudi Agreements (3059R)

TIDMCZA

RNS Number : 3059R

Coal of Africa Limited

08 March 2016

ANNOUNCEMENT 8 March 2016

Rio Tinto Chapudi Agreements

Shareholders are hereby advised that Coal of Africa Limited ("CoAL") and its subsidiary company, MbeuYashu Proprietary Limited ("MbeuYashu") received a notice from Rio Tinto Minerals Development Limited ("Rio Tinto") and Kwezi Mining Proprietary Limited ("Kwezi") alleging that CoAL is in breach of an obligation under the agreements pursuant to which MbeuYashu acquired interests in Chapudi Coal Pty Ltd and Kwezi Mining Exploration Pty Ltd, and therefore all amounts owed by CoAL and MbeuYashu are now due for payment. These interests relate to assets within the Greater Soutpansberg Project.

On legal advice, CoAL will dispute the validity of the notice. If Rio Tinto and Kwezi pursue the matter, CoAL and MbeuYashu will defend it vigorously.

The original amount owed by CoAL and MbeuYashu to Rio Tinto and Kwezi was USD75 million of which USD56 million has already been paid (which equals 75% of the original acquisition price) and an amount of USD19m is still owing. Payments to Rio Tinto and Kwezi are due finally by 15 June 2017. CoAL and MbeuYashu have met, and will continue to meet all of their payment obligations to Rio Tinto and Kwezi.

Authorised by

David Brown

Chief Executive Officer

For more information contact:

 
                    Chief Executive                              +27 10 003 
 David Brown         Officer              Coal of Africa          8000 
                    Chief Financial                              +27 10 003 
 De Wet Schutte      Officer              Coal of Africa          8000 
                                                                 +27 10 003 
 Celeste Riekert    Investor Relations    Coal of Africa          8000 
                                          Endeavour Corporate    +61 08 9316 
 Tony Bevan         Company Secretary      Services               9100

Company advisors:

 
 Jos Simson/Emily          Financial PR                                +44 20 
  Fenton                    (United Kingdom)    Tavistock               7920 3150 
 Matthew Armitt/Ross       Nominated Adviser    Peel Hunt              +44 20 
  Allister                  and Broker           LLP                    7418 8900 
                                                Mirabaud Securities    +44 20 
 Richard Morgan            Broker                LLP                    7878 3360 
 
 Charmane Russell/Olwen    Financial PR         Russell &              +27 11 
  Auret                     (South Africa)       Associates             880 3924 
                                                                        or 
                                                                        +27 82 
                                                                        372 5816

Investec Bank Limited is the nominated JSE Sponsor

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 Greater Soutpansberg Project /MbeuYashu, including CoAL's Makhado Project (coking and thermal coal).

This information is provided by RNS

The company news service from the London Stock Exchange

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March 08, 2016 02:00 ET (07:00 GMT)

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