27th Aug 2015 09:03
LONDON (Alliance News) - Sable Mining Africa Ltd Thursday said it has completed the sale of its "non-core" Rietkuil coal project in South Africa and its stake in its Liberian joint venture company for just under USD2.0 million.
The company sold the coal project for USD1.3 million. It also sold its 60% stake in its Liberian joint venture company, Salmec Resources Ltd, for USD700,000. Salmec held the exploration rights for gold and iron ore. However, Sable said it has spun off and retained the iron-ore rights.
The disposals are part of the company's restructuring to focus on the Nimba iron ore project in Guinea.
As part of the sale of the Rietkuil coal project, Sable has negotiated a debt restructuring agreement which will result in the buyer, Anglo African Capital, repaying USD18.6 million of debt associated with the mine, plus interest, to Sable on a quasi-royalty basis. Sable said Anglo African Capital will repay it USD1.20 per tonne of coal sold from the project, giving the company a potential future revenue stream, it said.
Sable didn't disclose the buyer of the Liberian stake.
"These transactions are the result of a strategic review of our wider portfolio, as we look to generate value from these other non-core investments. Through the disposal of our interests in [Rietkuil] and Salmec, the company will receive an immediate cash injection, whilst the renegotiated debt repayment terms relating to Rietkuil will provide additional upside on a quasi-royalty basis, without further expenditure being required from the company to progress the development of the project," said Chief Executive Andrew Groves.
Sable shares were up 5.1% to 0.457 pence per share on Thursday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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