GVM acquires JV partner's South African coal assets for $11m

West Perth-based coal mining company GVM Metals Ltd will acquire additional shareholdings in a group of South African coalfields from its joint venture partner in a deal that could be worth $11 million.

GVM will acquire its partner Motjoli Resources Pty Ltd's 51 per cent interest in the Holfontein coal project, 100km east of Johannesburg. It will also acquire Motjoli's 100 per cent interest in three Limpopo prospecting licences and a 50 per cent interest in the Baobab joint venture project, located in the Limpopo province of northern South Africa.

The consideration payable for the Holfontein and Baobab J.V. interests is 34,863,226 ordinary shares plus a further 3,417,964 ordinary shares to be issued on the grant of an export allocation.

With GVM shares closing yesterday at 31c, the deal could be worth as much as $11million in shares.

An infill drill program has commenced on the Holfontein property, the results of which will form the basis of the Bankable Feasibility Study expected to be completed by the end of 2007.

GVM managing director Simon Farrell said the buy was an important step in GVM's effort to become a significant coal producer in South Africa.

The company also announced that following the acquisition Motjoli managing director Nchaka Moloi is to join the GVM board as a non-executive director, with Motjoli executive director Nonqubela Mazwai being appointed executive director responsible for the group's coal interests.

The transaction and board appointments are subject to the successful listing of GVM on the Johannesburg Stock Exchange, as well as Ministerial consent and shareholder approval.

The company is confident of having satisfied these conditions by October 31.