| Tue 8 Jul 2008, 9:27 | | CZA - CoAL - Rio Tinto and CoAL enter JV and Farm Swap Agreement |
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CZA
CZA
CZA - CoAL - Rio Tinto and CoAL enter JV and Farm Swap Agreement
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`)
RIO TINTO AND COAL ENTER JV AND FARM SWAP AGREEMENT
Coal of Africa Limited, the AIM/ASX/JSE listed coal development company
operating in South Africa (ticker: CZA), is pleased to announce that it has
entered into a Memorandum of Understanding ("MOU") with Kwezi Mining and Chapudi
Coal ("Chapudi"), joint venture companies held by the Rio Tinto Group and the
Kwezi Group of South Africa, pursuant to which the parties intend to formalise
agreements for:
- Chapudi to grant access to and cede to CoAL ownership in certain prospecting
rights and interests over certain project areas ("Farms") that are contiguous
to CoAL`s Makhado Hard Coking Coal Project located in the Limpopo Province.
This is expected to add significant highly prospective acreage to the current
project area and improve the economics of the proposed 5mtpa mining operation
planned to commence in June 2009;
- Chapudi and CoAL to enter into a Joint Venture Agreement ("JV") in respect of
prospecting rights over certain Farms owned by CoAL and Chapudi in the
northern part of the Limpopo Province. It has been agreed that Chapudi will
be the operator of the JV and both companies believe that the area is likely
to contain a significant coal resource; and
- In return for the prospecting rights over Farms that Chapudi will cede to CoAL
as described in 1 above, the Company will cede to Chapudi prospecting rights
and interests over certain other Farms, also located in the Limpopo Province.
Map 1 (available on the Company website) shows the Farms over which prospecting
rights are currently held by Chapudi (shown in Red) and CoAL (shown in Blue).
Map 2, (also available on the Company website), shows the Farms on which
Prospecting Rights will be held by each of CoAL in Blue, Chapudi in Red and the
proposed JV in Purple, post the completion of the proposed transactions as
described above.
This rationalisation of Farms owned by Chapudi and CoAL provides significant
benefits to both companies in terms of bringing the collective properties into
commercial production.
Managing Director of CoAL, Simon Farrell, commenting on the MOU stated, "It is
very pleasing to bring these discussions to finalisation. CoAL is committed to
bringing its Limpopo properties into production in the second half of next year
and this agreement certainly contributes to achieving that goal in a very major
way."
Conditions Precedent
The proposed transactions for the exchange of prospecting rights and JV
agreement described above ("Transactions") require formal documentation and are
subject to the following conditions precedent:
- the completion of due diligence by CoAL and Chapudi ("the Parties);
- the passing by directors and shareholders of any resolutions required in
approving the Transactions;
- CoAL obtaining any necessary consents to the Transactions required from joint
holders or parties with participatory interests in applicable prospecting
rights;
- the waiver of certain confidentiality obligations and all other consents and
authorisations as may be required by the Parties; and
- the Minister of Minerals and Energy granting approval for the transfer and
cession of relevant prospecting rights and interests in such prospecting
rights in terms of Section 11 of the Mineral and Petroleum Resources
Development Act, 2002.
The Company will provide further updates on the progress of discussions and
formalisation of the Transactions in due course.
Yours sincerely,
SIMON J FARRELL
Managing Director
For more information contact:
Simon Farrell, Managing Director CZA +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 +44(0) 20 7448
4400
About CoAL:
Coal of Africa Limited ("CoAL") 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.
About Rio Tinto
Rio Tinto is a leading international mining group headquartered in the UK,
combining Rio Tinto plc, a London listed company, and Rio Tinto Limited, which
is listed on the Australian Securities Exchange. Rio Tinto`s business is
finding, mining, and processing mineral resources. Major products are aluminium,
copper, diamonds, energy (coal and uranium), gold, industrial minerals (borax,
titanium dioxide, salt, talc) and iron ore. Activities span the world but are
strongly represented in Australia and North America with significant businesses
in South America, Asia, Europe and southern Africa.
Date: 08/07/2008 09:27:01 Produced by the JSE SENS Department.
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