West Perth-based coal mining company GVM Metals Ltd will fully acquire its South African joint venture, Baobab Mining and Exploration Pty Ltd, for around $6.2 million after agreeing to buy its JV partner earlier this year.
West Perth-based coal mining company GVM Metals Ltd will fully acquire its South African joint venture, Baobab Mining and Exploration Pty Ltd, for around $6.2 million after agreeing to buy its JV partner earlier this year.
The full text of a company announcement is pasted below
GVM Metals Ltd, the Australian mineral processing and coal mining company with assets in South Africa, is pleased to announce that it has executed a binding Sale of Shares and Claims Agreement to acquire 100 per cent of the issued capital of Baobab Mining and Exploration Pty Ltd, a wholly owned subsidiary of Petmin Limited. BME owns 50 per cent of the Baobab J.V. coal project, the remaining 50 per cent is currently held by Motjoli Resources, which GVM has already agreed to acquire as announced on 22 August 2006.
Completion of both transactions will take GVM's interest in the Baobab Coal Project to 100 per cent.
The consideration payable to acquire BME is £2.5 million in cash, payable upon the fulfillment or waiver of the following suspensive conditions:
Baobab Coal Project
The Baobab Coal Project consists of granted New Order prospecting rights over sixteen farms in the Soutpansberg/Mopane coal fields located within the Limpopo Province in the north of South Africa. These farms intermingle with or adjoin farms held by Rio Tinto as part of their Chapudi Project. The total area of these farms is in excess of 23,000 Hectares, bringing GVM's total interests in the Limpopo coalfields to approximately 32,000 Hectares.
The Soutpansberg/Mopane Coalfield was extensively prospected by Iscor / Kumba and others up until the early 1990's. An independent techno-economic valuation report has been prepared based on open file reports available at the South African Council for Geoscience.
Based on that report, the Company is confident that with further exploration, the coal tonnage on the farms could be between 500 million and one billion tonnes. Readers are referred to "Annexure A" for an extract from that report detailing the historical results as they relate to the Baobab Coal Project. It should be noted that this estimate is conceptual in nature and there has been insufficient exploration to define a Mineral Resource and that it is uncertain if further exploration will result in the determination of a Mineral Resource.
Upon completion of the acquisition, GVM will immediately embark on an exploration program in order to provide a JORC compliant Mineral Resource and advise the market accordingly.
