CoAL makes preparation for Universal take-over
Published by Jonathan Rowland,
Editor
World Coal,
As part of the preparation for its take-over of Universal Coal, Coal of Africa (CoAL) and Universal Coal have released updated mineral resources and ore reserves for their material assets: CoAL’s Makhado project and Greater Soutpansberg Project (GSP) and Vele coal mine and Universal’s Kangala coal mine and NCC, Brakfontein, Arnot South, Berenice Cynus and Somerville projects.
Under AIM Rules, CoAL’s acquisiton of Universal Coal constitutes a reverse takeover, requiring the company to release an admission document and seek shareholder approval for the acquisition in a general meeting. As part of the preparation of the admission document, independent competent persons reports were prepared the two company’s material projects, updating the company’s mineral resources and ore reserves from JORC 2004 to JORC 2012.
The two producing assets – CoAL’s Vele coal mine and Universal’s Kangala project – both reported falls in mineral resources and ore reserves due to depletion through production. Changes to pit slope design and angles to align with revised rock mechanical engineering requirements were also a factor at Kangala.
At CoAL’s Makhado project and GSP and Universal’s Berenice Cynus and Somerville projects, estimates were unchanged from previous announcements with measured, indicated and inferred mineral resources of 796 million t at Makhaso, 7.2 billion t at GSP and 1.4 billion t at Berenice Cynus, while Somerville reported an inferred open mineral resource of 274 million t.
Makhado also reported probable ore reserves of 188 million t (mineable t in situ). CoAL aims to start mining at Makhado in the second half of this year and has appointed DRA Group in December 2015 to undertake the optimisation study and FEED package for the infrastructure components of the project.
Proven ore reserves fell at both Universal’s NCC and Brakfontein projects – a reflection of the resources that are currently considered to have a reasonable prospect of economic extraction under the current low-price environment and taking into account trends likely to affect future coal supply and demand, the company said.
At NCC, proven ore reserves were estimated at 29.3 million t with a measured, indicated and inferred mineral resource of 130.4 million t. At Brakfontein, proven ore reserves stood at 9.1 million t with a measured, ndicated and inferred mineral resource of 75.8 million t.
The general meeting for CoAL shareholders to approve the acquisition will be held 3 March 2016 in London.
“We are pleased to publish the admission document today and notice of general meeting in relation to the offer for Universal, which has built a profitable thermal coal business that generates positive cash flows despite the current depressed coal price environment,” said Bernard Pryor, Chairman of CoAL. “The proposed transaction creates a platform that combines producing assets and near-term projects from Universal’s assets with Coal of Africa’s flagship medium-term coking coal development projects”
Edited by Jonathan Rowland.
Read the article online at: https://www.worldcoal.com/coal/02022016/coal-makes-preparation-for-universal-take-over-2016-158/
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