Baobab Mining & Exploration has completed the transaction to acquire the Lukin and Salaita properties, key surface rights required for its Makhado hard coking and thermal coal project.
The purchase, first announced on 15 November 2018, was conditional upon the seller notifying and addressing any concerns regarding the transaction raised by the Limpopo Province Regional Land Claims Commissioner
The Commissioner did not object to the transaction during the legislated 30-day notification period and the Deeds Office has subsequently processed the change of ownership, legally transferring the Properties to Baobab.
The payment of the initial R35 million ($2.5 million) tranche has now been made to the seller.
The balance of the purchase price, being a further tranche of R35 million, will accrue interest at the South African prime interest rate less 3.0% and is payable within three years, on the earlier of:
- the third anniversary of the transfer of the properties; or
- the first anniversary of production of coal underlying the
- properties; or
- completion of a potential land claims and expropriation process.
In terms of current legislation,this will result in Baobab receiving market related compensation and will be followed by negotiations with the Minister of Land Affairs and the successful claimants, who are shareholders in Baobab, for long-term access to the properties.
David Brown, MC Mining’s CEO comments:
“The acquisition of Lukin and Salaita completes the suite of surface rights required for our flagship Makhado Project and the initial tranche of the purchase price was settled using internal cash flows.
"The transaction will facilitate the commencement of the final geotechnical drilling and related studies required for the siting of the mine’s infrastructure.
"In parallel, we continue to progress offtake negotiations for the balance of the Makhado coking and thermal coal as well as discussions with potential funders.”