Pan African Resources plc (LON:PAF) has sold its Uitkomst coal mine in South Africa for almost double the price it paid a year ago.
The gold miner bought the coal operation for a net cost of R148mln (£8.7mln) since when the price of coal has rallied strongly.
Coal of Africa (LON:COAL) is now acquiring PAF's 91% stake for R275mln (£16mln).
WATCH: Sale "allows us to focus on gold business", says Pan African boss ...
Uitkomst, which employs 520 staff, had a net asset value of R209 mln and made profits after tax of R21.3 mln for the six months to December.
Coal Of Africa already owns the Makhado hard coking and thermal coal project; Vele Colliery, a semi-soft coking and thermal coal mine, and the Mooiplaats Colliery near Ermelo.
Pan African said the disposal will allow it to focus on the development of the Elikhulu tailings retreatment plant and its core Evander and Barberton mines plus would mean an immediate R125mln cash flow boost.
A further R125 mln will be settled with CoAL equity.
Cobus Loots, Pan African’s chief executive, said gold mining is Pan African’s business but the deal demonstrated how it can conclude value-accretive transactions to the benefit of shareholders.
Shares eased 2% to 15.25p.
-- adds share price --