With final government approval obtained, Continental can now move to complete the Mashala acquisition over the coming weeks, executive director Peter Landau said.
“The acquisition of Mashala provides Continental with immediate export coal production from the Ferreira open cast mine which exported approximately 600,000 tonnes in FY 2009,” he said in a statement.
“In addition Mashala also has Richards Bay Coal Terminal allocation and Transnet Freight Rail contracts in place, enhancing the company’s key logistics capabilities.”
Under the terms of share sale agreements executed on September 15, 2010, by Continental and Mashala’s shareholders, Continental will acquire a 64.1% shareholding in Mashala for a cash payment of $US35 million.
The balance is to be acquired on the same terms within 12 months of settlement date.
Mashala has a 300tph wash plant operation and rail siding only 3 kilometres from the Ferreira open cast mine and Penumbra underground project, where Continental is looking to immediately begin works designed to develop this project into a 500,000tpa export thermal coal operation.
Continental’s shares were up by 0.01c to 0.078c in afternoon trade.