Continental To Complete 100% Acquisition Of Mashala Resources
Continental Coal Limited (ASX:CCC / AIM:COOL) ("Continental" or "Company") the South African thermal coal production, development and exploration company, is pleased to announce that settlement of the sale of its shareholding in Vanadium and Magnetite Exploration and Development Co (SA) (Pty) Limited ("VanMag") has been completed.
Total sale proceeds of approx. US$10 million from the sale of its shareholding in VanMag are to now be used by the Company towards purchasing all the outstanding minority interests in Mashala Resources ("Mashala") not already held by the Company's principal and 74% owned subsidiary in South Africa (Continental Coal Limited ("CCL")).
Following the acquisition of the outstanding interests in Mashala which is scheduled to be completed over the coming days CCL will hold a 100% interest in the operating Ferreira Coal Mine and Penumbra Coal Mine. Both these mining operations produce a high quality thermal coal that is exported through the Richards Bay Coal Terminal and sold under existing off take agreement into predominantly the Asian markets. In addition, CCL will hold a 100% interest in the De Wittekrans Coal Project that is forecast to become the Company's fourth coal mine, and where the Company is in advanced negotiations in respect to a potential long-term off-take agreement, strategic partnership and stand alone funding agreement for its development.
"To be able to conclude the sale of one of the Company's non core assets and use the proceeds towards the finalization of acquiring the outstanding minority interests in Mashala, is a major positive for the Company and its thermal coal business in South Africa." Continental's Chief Executive Officer, Don Turvey said.
"We have over the past 3 years invested heavily in establishing a South African thermal coal production, development and export business, that includes the Vlakvarkfontein and Ferreira Coal Mines and now following the commencement of mining activities at the Penumbra Coal Mine, we anticipate increased returns for our shareholders in the coming years" Mr Turvey added.
With settlement of the sale of the Company's interest in VanMag and the process towards acquiring via CCL, the remaining minority interests in Mashala underway, the Company looks forward towards further finalising its advanced negotiations with parties regarding the acquisition of an interest in its South African coal mining business and/or for the acquisition and/or joint venture of specific operating and development projects. While these negotiations are advanced, they remain confidential and incomplete and there is no guarantee that a transaction will be completed to the satisfaction of the Company.