Continental Coal completes sale of VanMag stake for 10m dollars
AIM-listed South African thermal coal production company Continental Coal has completed settlement of the sale of its shareholding in Vanadium and Magnetite Exploration and Development Company (VanMag).
AIM-listed South African thermal coal production company Continental Coal has completed settlement of the sale of its shareholding in Vanadium and Magnetite Exploration and Development Company (VanMag).
It reported that the total sale proceeds of approximately $10m would be used towards purchasing outstanding minority interests in Mashala Resources that were not already held by Continental Coal's principal, 74%-owned subsidiary in South Africa.
Following the acquisition of outstanding interests in Mashala, which the company said was scheduled to be completed over the coming days, Continental Coal's principal South African subsidiary will hold a 100% interest in the operating Ferreira Coal Mine and Penumbra Coal Mine.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Both mining operations produce high quality thermal coal which is exported through the Richards Bay Coal Terminal and sold under an existing off-take agreement into Asian markets predominantly.
In addition, Continental Coal's African subsidiary will hold a 100% interest in the De Wittekrans Coal Project which is forecast to become the company's fourth coal mine and where the company is in advanced negotiations with respect to a potential long-term off-take agreement, strategic partnership and stand-alone funding agreement for its development.
Don Turvey, Chief Executive Officer of Continental Coal, said: "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."
"We have over the past three 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," he added.
Continental Coal's share price was up 7.41% to 3.62p at 08:43 on Friday.
MF
Sign up to Money Morning
Our team, led by award winning editors, is dedicated to delivering you the top news, analysis, and guides to help you manage your money, grow your investments and build wealth.
-
8 of the best properties for sale with smallholdings
Eight of the best properties for sale with smallholdings – from a 17th-century farmhouse in the Deben Valley, Suffolk, to a property set in 36 acres on the slopes of the Preseli Hills, Pembrokeshire
By Natasha Langan Published
-
US election – is the Trump Trade back?
The US election is around the corner. How does Trump influence US markets?
By Alex Rankine Published