GVM executed a binding heads of agreement with black economic empowerment (BEE) group Motjoli Resources for the company’s 51% interest in Holfontein (taking GVM’s interest to 100%), as well as the Baobab project and Limpopo licenses.

 

GVM will pay Motjoli 34.86 million ordinary shares for the Holfontein and Baobab JV interests, plus a further 3.42 million shares to be issued on the grant of an export allocation to GVM at Richards Bay Coal Terminal for a minimum of 100,000 tonnes of coal per annum.

 

“This is the most important step we have made so far in becoming a significant producer in South Africa,” GVM managing director Simon Farrell said.

 

The Holfontein project, located in the Witbank coal fields 100km east of Johannesburg, contains an indicated resource of 56 million tonnes. A scoping study has been completed on the project based on production of 400,000tpa of soft/semi-soft coking coal and 500,000tpa of thermal coal.

 

The bankable feasibility study on the Holfontein project is due by the end of 2007.

 

The deal is subject to ministerial consent, regulatory approvals, GVM shareholder approval and the successful listing of GVM on the Johannesburg Stock Exchange.