Earlier this year, Riversdale executed a binding heads of agreement with two private companies to acquire a 100% interest in licences covering a package of coal-bearing tenements in Mozambique. The HOA was conditional on due diligence and the raising of $10 million, both of which have been completed.
The tenements cover an area of approximately 204,000 hectares and are located in the Lower Zambezi Coal Basin of Mozambique.
Riversdale chairman Michael O’Keeffe said the company was pleased to have secured such a major and strategic foothold in an area now recognised for its world-class mineral resources.
“Our acquisition involves a strategic holding in the Moatize Coal Province, which is considered to be one of the largest known, undeveloped coking and thermal coal provinces in the world,” O’Keeffe said.
The acquisition agreement includes a number of conditions, including the requirement for Riversdale shareholders to meet in August to approve the terms of the acquisition, which include:
$A3 million cash;
10 million fully paid ordinary shares in Riversdale;
10 million options each vesting one year after date of issue and expiring three years from the date of issue with an exercise price of $1.50; and
5 million options each vesting one year after the date of issue and expiring four years after the date of issue with an exercise price of $2.50.
“Coal is present in outcrop on many of the licences and we have other early positive indications as to the general prospectivity of the area, including a favourable ‘Productive Series’ stratigraphy that extends over a large part of the tenement holdings,” O’Keeffe said.
“The initial focus of exploration and development activities will be on the licence areas adjoining mining concessions on which the global mining house CVRD has already made significant coal discoveries.”
O’Keeffe said it was the company’s intention to undertake an extensive exploration program in order to develop sustainable long-life mining operations focused on metallurgical coal.
In its later phases, the project will also involve the development of thermal coal operations for both export and domestic power generation. It is expected the acquisition of the project will be completed by September 30, 2006.
