Ichor Coal is planning to acquire all of the shares in Universal Coal for A$80m ($58.6m) in an all cash transaction.
Ichor Coal is focused on thermal coal production in South Africa, and the company recently increased its shareholding in Universal to more than 29.99% following the conversion of its preferred shares on 13 August 2015.
IchorCoal presently has 400 million tons of coal on 16 properties, and the company plans to increase its current production of around 2.1 million tons per annum to 15 million tons per annum by 2017.
IchorCoal CEO Nonkululeko Nyembezi-Heita said: "Owing to our achievements of 2014 and despite the backdrop of depressed commodity prices, IchorCoal is well on its way to reaching its medium-term objective of positioning the company not only as a successful mid-tier producer but as South Africa’s pre-eminent medium-sized coal miner.
"This offer provides Universal Coal shareholders with an attractive opportunity to realise, in cash and at a material premium to the current share price, their investment in a historically illiquid stock."