DGAP-News: ICHOR Coal N.V. / Key word(s): Acquisition/Miscellaneous ICHOR Coal N.V.: IchorCoal concludes agreements to acquire Continental Coal's Penumbra and Vlakvarkfontein Coal Mines 08.06.2015 / 16:00
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IchorCoal concludes agreements to acquire Continental Coal's Penumbra and Vlakvarkfontein Coal Mines - IchorCoal to acquire Penumbra and Vlakvarkfontein for R128 million - The acquisitions are an important part of IchorCoal's plan to participate meaningfully in the South African coal sector - Synergies to be extracted from combining IchorCoal's Vunene mine and Continental Coal South Africa's Penumbra asset Johannesburg, 8 June 2015. Ichor Coal N.V. ("IchorCoal") has today announced that it has entered into binding agreements to acquire Continental Coal Limited South Africa's ("Continental Coal South Africa") interests in the Penumbra and Vlakvarkfontein coal mines (the "transaction"). IchorCoal will pay ZAR55 million for Continental Coal South Africa's 100% interest in Penumbra, which has a resource of 14 million gross tonnes in situ and produced 500,000 tonnes of coal per annum since 2012. The Penumbra acquisition also includes a rail siding and an annual export allocation of 18,000 tonnes at Richards Bay Coal Terminal. In addition, an amount of ZAR73 million will be paid for Continental Coal South Africa's 50% shareholding (and 60% economic interest) in Ntshovelo that wholly owns Vlakvarkfontein, an opencast operation that produces approximately 1.2 million tonnes of thermal coal a year. IchorCoal intends funding the acquisitions of Penumbra and Ntshovelo through a combination of internal funds and third party funding. "The transaction," said Nonkululeko Nyembezi-Heita, CEO of IchorCoal, "is another step toward IchorCoal becoming a leading mid-tier thermal coal producer in South Africa. Particularly noteworthy is the proximity of Penumbra to our current operation at Vunene and the potential to extract material synergies, which will result in numerous benefits including the lowering of the overall operating cost. Further, our existing, indirect, shareholding in Vlakvarkfontein makes us the logical acquirer of this asset and clearly demonstrates IchorCoal's strategy to actively participate in the consolidation of the South African junior coal sector." Continental Coal South Africa and its wholly owned subsidiary companies − Mashala Resources and Penumbra Coal Mining − entered into business rescue proceedings in terms of Chapter 6 of the Companies Act, 71 of 2008 in November 2014. The court appointed business rescue practitioners initiated a sale process on the Penumbra asset in February 2015, with IchorCoal being selected as preferred bidder for Penumbra following approval of the business rescue plan at a meeting of creditors on 14 April 2015. IchorCoal was also selected as preferred bidder for Continental Coal's interest in Vlakvarkfontein as part of this process. Ntshovelo was not placed under business rescue and continues to operate profitably. Transaction Rationale IchorCoal believes the transaction has material and immediate benefits to its current operations and asset base for the following reasons: - The transaction has provided IchorCoal with an opportunity to acquire production assets at an attractive price; - The acquisition of the assets increases IchorCoal's current attributable mineable resource base of 449 million tonnes to 460 million tonnes; - IchorCoal anticipates securing immediate access to an additional ~1.2mtpa in attributable run of mine production, an increase in excess of 50% on 2014 production of 2.1m tonnes; - The transaction provides IchorCoal with the ability to extract operational efficiencies as a result of the geographic proximity of the combined assets and larger operational platform; and - The addition of the assets to IchorCoal's portfolio further mitigates its operational risk through asset diversification and introduces greater operational flexibility. Ms Nyembezi-Heita added, "This is a significant opportunity for IchorCoal to increase its footprint in the domestic and export coal markets. We remain focused on our plan to increase attributable coal production, which we expect will coincide with an anticipated increase in the price of and demand for coal". Conditions Precedent The transaction remains subject to the fulfilment of a number of conditions precedent that are typical for a transaction of this nature, including requisite regulatory approvals from competition authorities and the department of mineral resources. The Ntshovelo transaction also remains subject to the existing shareholder not exercising its pre-emptive rights. Overview of Continental Coal South Africa Continental Coal South Africa is 74% owned by ASX listed Continental Coal Limited and 26% by SIOCCDT Resources Holdings (Proprietary) Limited. Continental Coal South Africa primarily operates as an investment holding company with interests in subsidiaries with business activities related to the exploration, development and operation of thermal coal mines and properties in South Africa. Its flagship mine - the Penumbra coal mine held through Mashala Resources Proprietary Limited ("Mashala Resources") - is located 5 kilometres south of Ermelo, Mpumalanga and operates as a conventional board and pillar coal mine. Penumbra has a resources base of 14 million gross tonnes in situ and has been producing approximately 500,000 tonnes per annum for export since November 2012. Following difficult trading conditions, Penumbra was placed on care and maintenance in February 2015. Continental Coal South Africa's primary producing asset is the Vlakvarkfontein coal mine located near Ermelo, which is wholly owned by Ntshovelo Mining Resources (Proprietary) Limited ("Ntshovelo"). The latter in turn is a 50:50 joint venture between Continental Coal South Africa and Orha Mining Proprietary Limited, with a 60% economic interest accruing to Continental Coal South Africa. Vlakvarkfontein is an opencast operation with a resource base of nearly 6 million tonnes and produces approximately 1.2 million tonnes per annum and has been in production since May 2010. Advisers Macquarie First South Capital Proprietary Limited is acting as financial adviser to IchorCoal in relation to the transaction. Werksmans Incorporated is providing South African legal advice to IchorCoal in relation to the transaction. About Ichor Coal N.V. Ichor Coal N.V. is an international mining company focusing on thermal coal production in South Africa. The company owns and operates its own coal resources and sells the output coal both locally and in international markets. Furthermore, the company holds minority equity positions in two South African mining companies. IchorCoal is led by its CEO, Nonkululeko Nyembezi-Heita and COO, Andries Engelbrecht - who together bring substantial experience in the industrial and commodity sectors. Contact: Ichor Coal N.V. 30 Jellicoe Avenue Rosebank 2196 South Africa Tel: +27 11 2681100
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08.06.2015 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de
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366297 08.06.2015
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IchorCoal concludes agreements to acquire Continental Coal's Penumbra and Vlakvarkfontein Coal Mines - IchorCoal to acquire Penumbra and Vlakvarkfontein for R128 million - The acquisitions are an important part of IchorCoal's plan to participate meaningfully in the South African coal sector - Synergies to be extracted from combining IchorCoal's Vunene mine and Continental Coal South Africa's Penumbra asset Johannesburg, 8 June 2015. Ichor Coal N.V. ("IchorCoal") has today announced that it has entered into binding agreements to acquire Continental Coal Limited South Africa's ("Continental Coal South Africa") interests in the Penumbra and Vlakvarkfontein coal mines (the "transaction"). IchorCoal will pay ZAR55 million for Continental Coal South Africa's 100% interest in Penumbra, which has a resource of 14 million gross tonnes in situ and produced 500,000 tonnes of coal per annum since 2012. The Penumbra acquisition also includes a rail siding and an annual export allocation of 18,000 tonnes at Richards Bay Coal Terminal. In addition, an amount of ZAR73 million will be paid for Continental Coal South Africa's 50% shareholding (and 60% economic interest) in Ntshovelo that wholly owns Vlakvarkfontein, an opencast operation that produces approximately 1.2 million tonnes of thermal coal a year. IchorCoal intends funding the acquisitions of Penumbra and Ntshovelo through a combination of internal funds and third party funding. "The transaction," said Nonkululeko Nyembezi-Heita, CEO of IchorCoal, "is another step toward IchorCoal becoming a leading mid-tier thermal coal producer in South Africa. Particularly noteworthy is the proximity of Penumbra to our current operation at Vunene and the potential to extract material synergies, which will result in numerous benefits including the lowering of the overall operating cost. Further, our existing, indirect, shareholding in Vlakvarkfontein makes us the logical acquirer of this asset and clearly demonstrates IchorCoal's strategy to actively participate in the consolidation of the South African junior coal sector." Continental Coal South Africa and its wholly owned subsidiary companies − Mashala Resources and Penumbra Coal Mining − entered into business rescue proceedings in terms of Chapter 6 of the Companies Act, 71 of 2008 in November 2014. The court appointed business rescue practitioners initiated a sale process on the Penumbra asset in February 2015, with IchorCoal being selected as preferred bidder for Penumbra following approval of the business rescue plan at a meeting of creditors on 14 April 2015. IchorCoal was also selected as preferred bidder for Continental Coal's interest in Vlakvarkfontein as part of this process. Ntshovelo was not placed under business rescue and continues to operate profitably. Transaction Rationale IchorCoal believes the transaction has material and immediate benefits to its current operations and asset base for the following reasons: - The transaction has provided IchorCoal with an opportunity to acquire production assets at an attractive price; - The acquisition of the assets increases IchorCoal's current attributable mineable resource base of 449 million tonnes to 460 million tonnes; - IchorCoal anticipates securing immediate access to an additional ~1.2mtpa in attributable run of mine production, an increase in excess of 50% on 2014 production of 2.1m tonnes; - The transaction provides IchorCoal with the ability to extract operational efficiencies as a result of the geographic proximity of the combined assets and larger operational platform; and - The addition of the assets to IchorCoal's portfolio further mitigates its operational risk through asset diversification and introduces greater operational flexibility. Ms Nyembezi-Heita added, "This is a significant opportunity for IchorCoal to increase its footprint in the domestic and export coal markets. We remain focused on our plan to increase attributable coal production, which we expect will coincide with an anticipated increase in the price of and demand for coal". Conditions Precedent The transaction remains subject to the fulfilment of a number of conditions precedent that are typical for a transaction of this nature, including requisite regulatory approvals from competition authorities and the department of mineral resources. The Ntshovelo transaction also remains subject to the existing shareholder not exercising its pre-emptive rights. Overview of Continental Coal South Africa Continental Coal South Africa is 74% owned by ASX listed Continental Coal Limited and 26% by SIOCCDT Resources Holdings (Proprietary) Limited. Continental Coal South Africa primarily operates as an investment holding company with interests in subsidiaries with business activities related to the exploration, development and operation of thermal coal mines and properties in South Africa. Its flagship mine - the Penumbra coal mine held through Mashala Resources Proprietary Limited ("Mashala Resources") - is located 5 kilometres south of Ermelo, Mpumalanga and operates as a conventional board and pillar coal mine. Penumbra has a resources base of 14 million gross tonnes in situ and has been producing approximately 500,000 tonnes per annum for export since November 2012. Following difficult trading conditions, Penumbra was placed on care and maintenance in February 2015. Continental Coal South Africa's primary producing asset is the Vlakvarkfontein coal mine located near Ermelo, which is wholly owned by Ntshovelo Mining Resources (Proprietary) Limited ("Ntshovelo"). The latter in turn is a 50:50 joint venture between Continental Coal South Africa and Orha Mining Proprietary Limited, with a 60% economic interest accruing to Continental Coal South Africa. Vlakvarkfontein is an opencast operation with a resource base of nearly 6 million tonnes and produces approximately 1.2 million tonnes per annum and has been in production since May 2010. Advisers Macquarie First South Capital Proprietary Limited is acting as financial adviser to IchorCoal in relation to the transaction. Werksmans Incorporated is providing South African legal advice to IchorCoal in relation to the transaction. About Ichor Coal N.V. Ichor Coal N.V. is an international mining company focusing on thermal coal production in South Africa. The company owns and operates its own coal resources and sells the output coal both locally and in international markets. Furthermore, the company holds minority equity positions in two South African mining companies. IchorCoal is led by its CEO, Nonkululeko Nyembezi-Heita and COO, Andries Engelbrecht - who together bring substantial experience in the industrial and commodity sectors. Contact: Ichor Coal N.V. 30 Jellicoe Avenue Rosebank 2196 South Africa Tel: +27 11 2681100
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08.06.2015 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de
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366297 08.06.2015
