Thursday, 31 October 2013

South Africa's CoAL receives $21.4 mil in funding to focus on coking coal strategy

South African junior miner Coal of Africa Limited (CoAL) said Wednesday it has secured a Rand 210 million ($21.4 million) in funding from investment firm Investec Bank Limited to be used to assist in its transformation strategy to focus on its coking coal assets.

It said in a statement that the 18-month working capital facility would be used for general operational expenditure and to fund reduced yet ongoing operating costs at identified non-core assets Woestalleen, Mooiplaats, Opgoedenhoop and Holfontein, while it awaited proceeds from the sale of these assets.

The miner added that the first Rand 105 million (50%) tranche of the two-part loan would be available immediately.

Among the principle terms of the loan, CoAL said it would issue Investec with 20 million options exercisable at Rand 1.32/share before October 2018.

"It is forecast that the proceeds generated from sale of the non-core assets, once completed will be sufficient to settle the facility," CoAL said.

The junior miner announced in mid-October that its board had approved a Rand 220 million expansion of its 100%-owned Vele coking coal colliery in South Africa's Limpopo province.

CoAL announced in early June that it had stopped production at its 6,000 mt/day Mooiplaats thermal coal mine and put it under a care and maintenance program after struggling to turn a profit on its operations for the past two financial years.

Source: Platts

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