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CoAL prepares to buy Uitkomst from Pan African Resources

Published by , Editorial Assistant
World Coal,

CoAL has entered into a sale of shares and claims agreement with Pan African Resources Plc to acquire 100% of the shares in and claims against Pan African Resources Coal Holdings Proprietary Limited for a purchase price of R275 million. PAR Coal holds a 91% shareholding in Uitkomst Colliery Proprietary Limited with the remaining 9% held by broad-based and a strategic entrepreneur’s trust.

Uitkomst Uitkomst is a high grade thermal export quality coal deposit with metallurgical applications, which is situated in the Utrecht coalfields in KwaZulu Natal. Uitkomst consist of an existing underground coal mine (Uitkomst - South Mine) and a planned life of mine extension into the northern area (Klipspruit - North Mine).

CoAL has continued to restructure its balance sheet to align its project pipeline and ensure that it is well positioned to unlock shareholder value through its flagship Makhado development project. As part of this restructuring, the company recognised that limited cash flow will be generated during the Makhado pre-production phase over the next three to four years and therefore the company has been focussed on acquiring a cash generating asset. The Uitkomst acquisition represents a highly compelling and attractive value proposition that CoAL believes to be value accretive and which will provide cash flows to support CoAL as the company continues to progress its flagship Makhado project. CoAL believes that Uitkomst will complement CoAL's flagship Makhado project and development project pipeline:

  • Creating a sustainable, multi-product mining group with a skilled team with excellent resources adding to the development profile.
  • Enlarging the asset base which provides a stronger proposition to access the necessary funding required to pursue the development of the enlarged group's growth opportunities.
  • CoAL said the acquisition would help it generate cash while it brings its flagship Makhado project into operation over the next three to four years.
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