Baobab will acquire the Lukin and Salaita properties for a total of R70 million (approximately US$4.8 million), with the balance to be paid in two equal tranches. The properties have been pledged as security until the purchase price (including any accrued interest) is settled. The first tranche is payable on transfer of the properties while Baobab will have access to the properties upon payment of this amount to the conveyancing attorneys.
The second tranche will accrue interest at the South African prime interest rate (currently 10%) less 3% (from date of transfer) and is payable on the earlier of:
- the third anniversary of the transfer of the properties; or
- the first anniversary of production of coal underlying the properties; or
- completion of a potential land claims and expropriation process that would, in all likelihood result in Baobab receiving market related compensation under present legislation. Should the properties be expropriated in favour of the land claimants, MC Mining will negotiate access terms with the Minster of Land Affairs and the successful claimanats who are expected to be communities who have a shareholding in Baobab.
David Brown, MC Mining’s CEO, said: "The agreement to acquire Lukin and Salaita is a significant step for MC Mining and completes the suite of surface rights required for our permitted flagship Makhado project. With the acquisition of the properties, the company can proceed with the geotechnical and related studies for the mine's infrastructure. The initial tranche of the purchase price will be funded from internal cash flows."
Brown added: "MC Mining has made substantial progress on the Makhado project milestones, including an off-take agreement for approximately half of the hard coking coal to be produced at the mine. Negotiations for the sale of the remaining hard coking coal as well as the thermal coal are at an advanced stage while funding initiatives are also progressing. The company will keep shareholders appraised on these processes as well as the results of the geotechnical studies, with further updates expected in 1Q19."
Read the article online at: https://www.worldcoal.com/coal/15112018/baobab-mining-exploration-acquires-key-properties-for-makhado-project/