Coal of Africa soars 15pc on $17m colliery sale
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Coal of Africa shares gained 15 per cent in early trade today on news it has sold its mothballed Mooiplaats thermal coal colliery for about $17 million.
The ASX-listed, South African focused coal play (ASX:CZA) was trading 0.6c higher at 4.5c in morning Tuesday trade following the news.
Mooiplaats, which has been on care and maintenance since October 2013 after a fall in global thermal coal prices, has been sold to a consortium of investors.
The sale will yield annual operational cost savings of around $1.4 million with proceeds used to provide funds to Coal of Africa’s Mooiplaats Black Economic Empowerment partner for further development of its flagship Makhado project.
“The sale of Mooiplaats colliery is the final step in the company’s balance sheet restructuring strategy settling the course for Coal of Africa to become a self-sufficient mid-tier coal mining company,” Coal of Africa CEO David Brown said.
The company will also look to potential use funds to acquire further assets.
Coal of Africa has a market cap of around $127 million.