JOHANNESBURG - MC Mining said on Thursday its subsidiary Baobab Mining & Exploration had reached agreement on the terms and conditions to acquire two key properties required for its Makhado hard coking and thermal coal project.

It said the deal would result in Baobab owning the Lukin and Salaita properties at a cost of R70 million (US$4.8 million) to be settled in two equal tranches.

“The agreement to acquire Lukin and Salaita is a significant step for MC Mining and completes the suite of surface rights required for our permitted flagship Makhado Project," MC Mining CEO David Brown said.

"With the acquisition of the properties, the company can proceed with the geotechnical and related studies for the mine’s infrastructure."

The initial tranche of the purchase price would be funded from internal cash flows, Brown added.

MC Mining has made substantial progress on the Makhado Project milestones, including an off-take agreement for approximately half of the hard coking coal to be produced at the mine. 

Negotiations for the sale of the remaining hard coking coal as well as the thermal coal were at an advanced stage while funding initiatives were also progressing, the company said on Thursday.

- African News Agency (ANA)