Resource Generation (ASX: RES) has agreed to divest its Tasmanian coal tenements for $1.5 million in order to focus on the proposed Boikarabelo coal mine in South Africa.
The divestment will be through the sale of all its shares in Energy Investments Pty Limited and Tiger Coal Pty Limited. Resource Generation will also receive a royalty of $1.20 per tonne on all coal sold from any mine developed on these tenements.
Despite potential for the development of a mine at its Tasmanian coal tenements, after completing exploration and analysis the company decided it would require funding and personnel commitments that would detract management from its main asset at Boikarabelo.
At the proposed Boikarabelo coal mine in South Africa there are probable reserves of 745 million tonnes of coal on 35% of the company’s tenements.
The company is currently continuing normal activities to develop the Boikarabelo mine and is confident that a Mining Right for the mine will be confirmed at the end of a statutory process.
The company is targeting completion of the sale for 16 September 2011. The purchaser, which is a private company, has paid a non-refundable deposit of $150,000.
Originally published at: http://www.proactiveinvestors.com.au/companies/news/19129/resource-generation-to-sell-tasmanian-coal-assets-for-a15-million-19129.html
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