South African thermal coal production and development company Continental Coal has confirmed that a settlement for its sale of a shareholding in Vanadium and Magnetite Exploration and Development Company (VanMag) is expected to be completed later this month.
The company said it had agreed a $10m sale of its shareholding in the company as well as a refinancing of a convertible note facility and the establishment of a standby line of funding to provide additional standby working capital for the company.
With regard to the sale of its stake in VanMag, the company reported that it had received confirmation from its lawyers that a further $3m of the $10m total sale proceeds due from the purchaser had been received. It said that settlement of the sale of the its stake in the company remained "on track for settlement later this month".
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The outstanding amount now due on the sale of VanMag of approximately $6m is scheduled to be received from the Chinese purchaser later this month upon execution and handover of the final settlement documentation and share transfer deeds.
Continental Coal reported that the proceeds from the sale of the company's shareholding in VanMag are to be used to fund all remaining amounts due for the outstanding minority interests in Mashala Resources that were not already held by the company's principle susbsidiary in South Africa,
Refinancing of convertible notes and standby funding
The company added that it had completed a refinancing of the outstanding amount under the A$5m convertible note facility it entered into in May 2012 and had further established a A$15m standby line of funding.
Continental Coal has a portfolio of projects located in South Africa's major coal fields including three operating mines comprising the the Vlakvarkfontein, Ferreira and Penumbra Coal mines.
Continental Coal's share price was up 2.94% to 4.38p at 08:19 on Tuesday.
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