Wescoal moves to acquire remaining 40% of exploration arm
JOHANNESBURG (miningweekly.com) – Coal miner Wescoal has moved to secure the remaining 40% of Wescoal Exploration that it did not already own by acquiring joint venture (JV) partner and owner of the outstanding stake, trading firm Proudafrique Trading.
Created in 2008 as a JV company between Proudafrique and the coal junior, Wescoal Exploration owned the Silverbank and Verblyden coal reserve prospects, in Mpumalanga.
In addition to the 40% shareholding in Wescoal Exploration, Proudafrique owned 14.3-million ordinary Wescoal shares, an amount owed on dividend from Wescoal Exploration of R8-million, and a royalty fee of R5/t of saleable coal mined at Wescoal’s newly acquired Elandspruit operation, also in Mpumalanga.
The trading firm was also entitled to royalty fees of R4/t of saleable coal from Silverbank and Verblyden if it had a calorific value (CV) of less than 24.5, R6/t of saleable coal if it had a CV of between 24.5 and 26, and R8/t of saleable coal if it had a CV above 26.
The purchase agreement would see JSE-listed Wescoal acquire 30% of Proudafrique from the seller, Minoscape, for R18-million, with R13-million of this payable through the issuance of Wescoal shares at R2/share and R5-million payable in cash.
Wescoal would secure the remaining 70% of the trading firm from Minoscape through the payment of R20-million through the issuance of 10 000 Wescoal shares at R2/share as well as the payment of R5.6-million in cash.
In addition, Minoscape would receive a royalty of R3.50/t of saleable coal mined at Elandspruit.
The agreement remained subject to Wescoal shareholder approval by March 31, 2014.
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