Continental Coal (ASX: CCC) has received an initial payment of US$1 million (A$955,989) following the settlement of the sale of its non-core shareholding in Vanadium and Magnetite Exploration and Development Co (NYSEMKT:SA) (Pty) Limited (VanMag).
Don Turvey, chief executive officer of Continental Coal, commented: "Proceeding with the financial settlement of our shareholding in VanMag is a significant step forward for the company.
"The shareholding is a non-core asset and it is extremely pleasing to have finally got there and to see settlement proceeding with US$1 million of the total net proceeds of US$10 million already received.
"The proceeds from the VanMag settlement will be used to fund the acquisition of the outstanding minority interests in Mashala, and provide our principal subsidiary in South Africa with 100% interests in the operating Ferreira and Penumbra export thermal coal mines and the De Wittekrans Coal Project that is forecast to become the company's fourth coal mine."
Final settlement of the US$9 million balance is to be made early in the March 2013 quarter.
Continental has used the US$1 million received to meet part of the ZAR76 million (A$8.3 million) purchase price for the outstanding minority interests in Mashala Resources not already held by the company's principal subsidiary in South Africa, Continental Coal Limited.
The company has also reached agreement with the minority shareholders in Mashala to extend the date by which Continental is required to acquire the outstanding interests in Mashala to 28 February 2013.
Final payment of the outstanding interests is scheduled to be made from the US$9 million from the final settlement of the VanMag transaction.
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