The property is located north of Dundee in the Kwa-Zulu Natal province in South Africa, adjacent to Forbes Coal’s current Magdalena opencast operations.
Under the terms of the agreement, Forbes Coal’s subsidiary Zinoju Coal Proprietary will acquire Alleen No. 2 based on the estimated run of mine that can be extracted from the mining right area.
Ikwezi will receive a top-up payment equivalent to ZAR 10 (CAD$1) per ton, if the run of mine actually extracted exceeds the agreed upon production threshold.
Forbes Coal, a coal producer in southern Africa, holds a majority interest in two operating mines through its 100% interest in Forbes Coal, is a South African company which has a 70% interest in Zinoju Coal.
Zinoju has a 100% interest in the Magdalena bituminous mine and the Aviemore anthracite mine in South Africa.
The sale is subject to the South African Minister of Mineral Resources’ written consent.
