Shanduka finds a new suitor

[miningmx.com] — SHANDUKA Resources seems to have jilted Sentula Mining (Sentula) at the altar and accepted a better offer for its coal assets.

That’s the implication of a terse statement released by Sentula late on Tuesday, which said one of the conditions precedent to the deal through which Shanduka would have carried out a reverse takeover of Sentula had failed.

According to the statement, “Sentula has been advised by Shanduka group that its shareholders have not approved the exchange of shares and will not approve the exchange of shares by June 30 2011, being the last date for fulfilment of the said condition.

“Sentula has also been advised by a senior executive of Shanduka Resources that the shareholders of Shanduka group have approved the acceptance of an alternative offer for Shanduka Resources’ coal assets.’

Sentula CEO Robin Berry could not be reached immediately for comment and neither could Shanduka spokesperson Maureen Mphatsoe.

It may be coincidence that ASX-listed Continental Coal, an Australian junior with an ambitious coal development strategy in South Africa, published a cautionary notice concerning a major black economic empowerment (BEE) deal on the Australian stock exchange on Wednesday morning.

According to Continental, it has negotiated a “landmark’ BEE investment agreement with “a highly respected and well-established broad-based black economic empowerment (B-BBEE) company’.

The terms of the Continental deal are materially different to what Shanduka was looking to do at Sentula because they are for the purchase of a 26% stake in Continental from its existing BEE partner – Masawu Investment.

Continental did not identify the company and said: “Upon completion of the formal documentation process, it is expected that a formal announcement of the B-BBEE party will be made.’

The news clobbered Sentula shares in early trading on the JSE on Wednesday, knocking them down 6% to 260c. They could drop further because the Shanduka deal was viewed as favourable for Sentula, which has been dogged by misfortune since massive fraud was uncovered in its accounts early in 2008.

In terms of the deal, Shanduka would have acquired 51.9% control of Sentula through injecting its 30% stakes in Kangra Coal and Shanduka Coal into Sentula in a deal worth R2.1bn.

This would have been the first time Shanduka had listed any of its mining assets through a company which it controlled, and Sentula was to be renamed Shanduka Mining.

The takeover would also have linked Sentula with resource powerhouse Glencore, which owns the other 70% in Shanduka Coal.

Continental has two operating mines in South Africa currently producing 2 million tonnes (mt) annually and has plans to increase production to 10mt/year by the end of 2015.