Last checked at 13 Mar 2015 07:00
ANNOUNCEMENT 13 March 2015
Makhado Project Empowerment Structuring Completed
Coal of Africa Limited ("CoAL" or the "Company") is pleased to announce that it has concluded agreements with broad based black economic empowerment ("BBBEE")partners for their acquisition of 26 per cent of the Makhado hard coking and thermal coal project (the "Makhado Project") (the "Transaction"). Conclusion of the Transaction, which is subject to the conditions set out below, will ensure the Makhado Project complies with mining legislation in South Africa and satisfies one of the last remaining requirements for the granting of a New Order Mining Right.
The Transaction results in the Makhado Colliery Community Development Trust (the "Trust"), representing seven local communities living in the vicinity of the proposed colliery, acquiring 20 per cent of the Makhado Project. The broad base of the Trust's beneficiaries ensures that the Makhado Project will significantly benefit local communities. A further 6 per cent has been acquired by Yoright Investments (Pty) Ltd ("Yoright") a company formed by black entrepreneur Mike Nkuna whose shareholder grouping will include Historically Disadvantaged South Africans and other black entrepreneurs, further expanding the BBBEE shareholding in the project. The Transaction will result in the Trust owning 20 per cent, Yoright 6 per cent and CoAL 74 per cent of Baobab Mining & Exploration (Pty) Ltd, the entity that will implement the Makhado Project.
The Transaction is conditional on inter alia Section 11 approval from the Department of Mineral Resources. The Trust and Yoright have to raise sufficient funding within two years, or such date agreed between the parties. The final amount payable is subject to due diligence and will be negotiated with the Company following these processes.
Commenting today CoAL CEO David Brown stated:
"The acquisition of 26 per cent of the Makhado Project by BBBEE parties is a critical step to obtaining the Makhado Project mining right. Furthermore the transaction reaffirms CoAL's commitment to empowerment and Yoright together with the communities in the vicinity of the project stand to gain significant benefits over the life of the project. The Makhado colliery will be the first of its type in the Soutpansberg and the Company anticipates that the relevant regulatory approvals will be granted in due course."
AUTHORISED BY:
Tony Bevan
Company Secretary
Additional Information
The Makhado Project is not in production and therefore has no turnover or profits and as at 31 December 2014, was carried at $58,151,398 on the Company's Condensed Consolidated Statement of Financial Position.
For more information contact:
David Brown | Chief Executive Officer | Coal of Africa | +27 10 003 8000 |
Michael Meeser | Chief Financial Officer | Coal of Africa | +27 10 003 8000 |
Celeste Harris | Investor Relations | Coal of Africa | +27 10 003 8000 |
Tony Bevan | Company Secretary | Endeavour Corporate Services | +61 08 9316 9100 |
Company advisors:
Jos Simson/Emily Fenton | Financial PR (United Kingdom) | Tavistock | +44 20 7920 3150 |
Chris Sim/George Price/Jeremy Ellis | Nominated Adviser | Investec Bank plc | +44 20 7597 5970 |
Charmane Russell/Jane Kamau | Financial PR (South Africa) | Russell & Associates | +27 11 880 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).