THE BOURSE WHISPERER: Continental Coal (ASX: CCC) has completed settlement on the sale of its shareholding in Vanadium and Magnetite Exploration and Development Co (SA) (Pty) Limited.
Continental said the total sale proceeds of approx. US$10 million from the sale of the company’s shareholding in VanMag will be put towards purchasing all the outstanding minority interests in Mashala Resources not already held by its principal and 74 per cent-owned subsidiary in South Africa (Continental Coal Limited (CCL)).
Once it has completed acquiring the outstanding interests in Mashala, which the company said it anticipates occurring over the coming days, CCL will hold a 100 per cent 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 per cent interest in the De Wittekrans coal project that is forecast to become the company’s fourth coal mine.
CCL is currently in advanced negotiations in respect to a potential long-term off-take agreement, strategic partnership and standalone funding agreement for the development of De Wittekrans.
“To be able to conclude the sale of one of the company’s non-core assets and use the proceeds towards the finalisation of acquiring the outstanding minority interests in Mashala, is a major positive for the company and its thermal coal business in South Africa.” Continental Coal chief executive officer Don Turvey said in the company’s announcement to the Australian Securities Exchange.
“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.”