South African thermal coal producer Continental Coal is seeking to augment its coal assets with a property in Colombia.
The ASX and AIM-listed company (ASX:CCC; AIM:COOL) said yesterday it has entered into a JV agreement to acquire a 50% interest in an existing coking coal operation in the South American country.
"The acquisition of this well established and high quality hard coking coal mining operation will complement the Company’s existing thermal coal mining, development and exploration projects in South Africa. The acquisition will further diversify its production base geographically into another of the world’s leading coal producing and export nations from a product base into the hard coking coal market," Continental Coal said in a statement.
The JV involves five mining concessions covering 1,500 hectares and includes an existing underground mine that has been producing for the last 24 years. Continental Coal said the minelife is over 50 years, though the mine currently does not have JORC-compliant reserves or resources. It would produce at a rate of 500,000 tpa according to a 2010 technical report.
The acquisition would cost approximately US$15 million, and Continental Coal said it has finalized a convertible note facility with US-based Bergen Global Opportunity Fund LP for up to A$5 million.