Forbes Coal, Ikwezi property acquisition accord expires
TORONTO (miningweekly.com) – Dual-listed Forbes & Manhattan Coal on Monday reported that its agreement to buy Ikwezi Mining’s right for Alleen No 2, located next to Forbes’ current Magdalena opencast operations, in KwaZulu-Natal, had expired as a result of not receiving consent from the South African Mineral Resources Minister Ngoako Ramatlhodi for the transaction to close.
TSX- and JSE-listed Forbes had on April 30 extended the proposed closing date for the transaction to June 30 for the same reason, as the parties were still awaiting written consent from the Minister, as required in terms of Section 102 of the Mineral and Petroleum Resources Development Act.
However, both parties had indicated "a continued interest" in closing the proposed transaction.
Under terms of the agreement, Forbes Coal subsidiary Zinoju Coal would acquire the Alleen No 2 property for R8-million (C$790 906), an amount based on the estimated run-of-mine (RoM) to be extracted from the mining right area.
Should the actual RoM exceed the agreed-upon production threshold, Ikwezi would be entitled to receive a top-up payment equivalent to R10/t extracted, which exceeded the production threshold.
Forbes Coal expects to change its name to Buffalo Coal pending TSX approval, as part of its plan to transfer its head office to South Africa under its restructuring process. The coal producer, which had been facing financial difficulties, had first announced plans to change its name in January.
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