28 August 2013
South Africa’s Keaton Energy has made an offer to acquire Australian-listed Xceed Resources’ coal projects in Moabsvelden, Roodepoort and Bankfontein in South Africa’s Mpumalanga province for approximately R183-million.
The deal is expected to significantly boost Keaton Energy’s annual Eskom-quality coal output, as well as offer the firm the opportunity to enter the export thermal coal market.
“The acquisition is consistent with Keaton Energy’s strategy of strengthening its position of becoming a 5Mtpa [million tonnes per annum] producer,” Keaton chief executive officer Mandi Glad said in a statement on Monday.
“The Xceed transaction reflects our strong belief in the South African coal industry and the growth of the group bodes well for Keaton’s continued delivery of records across mining, processing, sales and cash generation.”
Xceed is an Australian public company primarily involved in the exploration and development of thermal coal projects in South Africa.
It will become a wholly owned subsidiary of Keaton Energy and will be unlisted from the Australian Securities Exchange once the deal is concluded and regulatory conditions have been fulfilled.
Moabsvelden hosts a 65.3-million tonne thermal coal resource, a 44-million tonne run of mine open pit reserve and an approved mining right. The mine open pit has a 15-year lifespan and produces mostly Eskom coal, with a small fraction for export. It is also only three kilometres from Keaton’s existing Vanggatfontein Colliery.
The Roodepoort mine hosts a 29.3-million tonne open-castable coal resource and Bankfontein hosts a 13.7-million tonne predominantly underground coal resource.
Keaton’s open-castable coal resource will increase by 100-million tonnes, as well as increase the run of mine coal reserve in the Vanggatfontein Colliery area by about 44-million tonnes.
“This is an exciting opportunity to deliver real value to our shareholders through increased Eskom coal production at a time when the industry is abuzz with Eskom’s impending coal supply shortfall,” Glad said.
“The transaction also provides Keaton with the opportunity to participate in the export thermal coal market for the first time. We are pleased that our major shareholder is aligned with our vision for the company, supports our growth strategy and advocates the development of the South African coal industry.”