Wescoal offloads Leeuw Braakfontein

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Wescoal offloads Leeuw Braakfontein

Published Date: 2018-08-08 | Source: Stephen Gunnion | Author: Stephen Gunnion | Comments

Wescoal offloads Leeuw Braakfontein

The junior coal miner is focusing on assets that will accelerate its growth plans

Wescoal is selling its Leeuw Braakfontein Colliery in KwaZulu-Natal as it focuses on acquisitions that complement its existing operations and exits non-core assets.

Sitatunga Resources is paying R103 million for the colliery, with a R20 million upfront payment and remainder once all the conditions for the sale have been met. These include the approvals of the Department of Mineral Ouresces and the Competition Commission.

Leeuw Braakfontein is an advanced-stage exploration property situated on the Klip River Coalfield, which is located about 10km from Newcastle. Wescoal says it has declared no coal reserves for the colliery, with shallow coal on the flanks of the resource area having the potential to be extracted using opencast methods and the balance of the coal being mined using underground mining methods.

It values the assets at R92 million and because they are non-operational it says there were no profits attributable to them in its 2018 results.

It plans to use proceeds from the deal to reduce its short-term borrowing and fund strategic growth options.

Its shares ended 1.7% higher at R1.85.





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