The company announced on Friday that through the sale of its shareholding in Vanadium and Magnetite Exploration and Development it had proceeds of approximately $US10 million to purchase the outstanding minority interests in Mashala.
“To be able to conclude the sale of one of the company’s non-core assets and use the proceeds towards the finalisation of acquiring the outstanding minority interests in Mashala is a major positive for the company and its thermal coal business in South Africa,” Continental chief executive officer Don Turvey said.
Following the acquisition of the outstanding interests in Mashala, scheduled to be completed over the coming days, Continental will hold a 100% interest in the operating Ferreira and Penumbra coal mines.
“We have over the past three years invested heavily in establishing a South African thermal coal production, development and export business that includes the Vlakvarkfontein and Ferreira coal mines and now, following the commencement of mining activities at the Penumbra coal mine, we anticipate increased returns for our shareholders in the coming years,” he added.
Continental’s three operating mines, Vlakvarkfontein, Ferreira and Penumbra, are set to produce 2.8 million tons per annum of thermal coal.
The company is also in advanced negotiations in respect to a potential long-term offtake agreement, strategic partnership and stand-alone funding agreement for the development of the De Wittekrans project, forecast to become the company’s fourth coal mine.