| Wed 7 May 2008, 9:10 | | CZA - Coal of Africa Limited - Sale of Holfontein |
|
CZA
CZA
CZA - Coal of Africa Limited - Sale of Holfontein Coal Project for A$25m
Coal of Africa Limited
(previously, "GVM Metals Limited")
(Incorporated and registered in Australia)
(Registration number ABN 008 905 388)
Share code on the JSE Limited: CZA
ISIN AU000000CZA6
Share code on the Australian Stock Exchange Limited: CZA
ISIN AU000000CZA6
(`CoAL` or `the Company`)
SALE OF HOLFONTEIN COAL PROJECT FOR A$25m
Coal of Africa Limited ("CoAL") (ticker "CZA"), the AIM/ASX/JSE listed coal
development company operating in South Africa, is pleased to announce that it
has reached agreement with Lachlan Star Limited ("Lachlan Star") whereby Lachlan
Star will acquire 100% of the Holfontein Coal Project ("Project") in South
Africa. Total consideration for the Project is A$25 million, payable in a mix of
cash and shares and staged at key milestones.
The transaction also includes an option agreement covering the adjoining
Wildebeestfontein Farm.
Transaction Summary
The proposed transaction will include an upfront payment upon transfer of the
Project and a series of milestone payments related to the granting of a New
Order Mining Right ("NOMR") for the Project and certain production targets. The
payment terms are as follows:
* A payment of A$15 million, with minimum cash consideration of A$9 million
upon transfer of the Project tenements to Lachlan Star`s nominated subsidiary;
* A cash payment of A$1 million and a share payment of A$2 million (to be
priced at Lachlan Star`s 30 day VWAP prior to payment) upon grant of the NOMR;
* A cash payment of A$2 million and a share payment of A$3 million (to be
priced at Lachan Star`s 30 day VWAP prior to payment) upon the production of an
aggregate of 500,000 tonnes of saleable coal; and
* A cash payment of A$1 million and a share payment of A$1 million (to be
priced at Lachlan Star`s 30 day VWAP prior to payment) upon the production of an
aggregate of 1,500,000 tonnes of saleable coal.
The transaction is conditional upon:
* Approval from all relevant regulatory bodies in South Africa for the
transfer of title in the Project to Lachlan Star`s nominated subsidiary;
* Assignment of CoAL`s rights under the Wildebeestfontein Agreement dated 3
December 2007 to Lachlan Star;
* Approval by Lachlan Star`s shareholders of the transaction; and
* Legal due diligence.
Following the conclusion of the sale, CoAL will be the largest shareholder in
Lachlan Star.
A further detailed announcement will be made by the Company upon satisfaction of
the applicable conditions.
Managing Director of CoAL, Simon Farrell, commented `We are pleased to reach
this agreement with Lachlan Star for the sale of the Holfontein Coal Project.
This agreement allows CoAL to concentrate on our larger Mooiplaats and Limpopo
coal projects, while taking an interest in Lachlan Star Limited.`
7 May 2008
SIMON J FARRELL
Managing Director
For more information contact:
Simon Farrell, Managing Director
GVM +61 417 985 383 or +61 8 9322 6776
Petronella Gorrie
The Event Shop +27 82 827 8815
Jos Simson/ Leesa Peters
Conduit PR +44(0) 20 7429 6603
Olly Cairns / Romil Patel
Blue Oar Securities Plc +61 8 6430 1631 or +44(0) 20 7448 4400
www.coalofafrica.com
About CoAL:
Coal of Africa Limited ("CoAL"), formerly GVM Metals Limited, is primarily
focused on the acquisition, exploration and development of thermal and
metallurgical coal projects. The Company`s key projects, along with its leading
metals processing company NiMag Group (Pty) Ltd are in South Africa. The Company
was incorporated in Western Australia and listed in 1980. Since 2005, the
Company has also listed on both the AIM and JSE markets, allowing further growth
in the Company`s coal assets.
Sponsor
PricewaterhouseCoopers Corporate Finance (Pty) Ltd
Date: 07/05/2008 09:10:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
