Perth-based explorer CityView Corporation has scrapped one acquisition in favour of another that will give it a controlling stake in a coal briquette company, with the deal valued at $27 million.
The company today announced it had dropped plans to acquire an 18.325 per cent interest in a South African coal fines company. CityView was to pay a total of $US30 million for the interest.
"After carrying out extensive due diligence CityView has determined that it would be more commercially attractive to acquire control of a smaller operation rather than hold a minority stake in a larger enterprise," the company said.
As a result, CityVIew will now acquire a 74 per cent in Velvogen Pty Ltd for $US23.8 million ($A27 million).
The remaining 26 per cent will be held by a Black Economic Empowerment group.
Velvogen is constructing a coal briquetting plant and holds rights to be supplied with 750,000 tonnes of high grade coal fines each year. The company also holds offtake agreements for 600,000t of coal briquettes each year.
Briquetting is a means of transferring fine and ultra fine coal into saleable product.
Shares in CityView closed up 0.2 cents to 0.6c today.
