Sentula Mining subsidiaries Sentula Mining Services and Senex have inked a deal to offload idle property, plant, equipment and associated inventory held in the Democratic Republic of the Congo (DRC).
The deal worth $2.4 million was completed with Orezone Drilling Mauritius and its DRC-focused drilling subsidiary Orezone Drilling DRC.
Decline in activity
The South Africa-based diversified mining company with a pan-African footprint said in a statement on Tuesday that its subsidiaries had been chiefly engaged in providing opencast mining services, exploration drilling services and crane hire services in the DRC.
However, Sentula currently had no contracted work in the country as a result of a significant decline in activity in the exploration drilling sector over the past two years.
Demobilisation not viable
While other equipment previously situated in the DRC had already been relocated to operations in Mozambique, South Africa and Saudi Arabia, the board had decided to dispose of the remaining assets in the country.
“It will not be viable for us to relocate the remaining assets in the DRC to other operations owing to the high cost of demobilising the equipment across borders,” stated the company.
Repayment of debt
Proceeds from the disposal will be used for the repayment of debt and the funding of other international operations.
Orezone had already paid Sentula a nonrefundable deposit of $480 000 on 4 August 4, while the outstanding balance of $1.92-million was payable in nine monthly instalments of $200 000 – the first of which would be made seven days after the signature date, and a final instalment of $120 000.
Under the terms of the sales agreement, for a period of two years after the signature date, Sentula would not be able to perform any exploration drillingwork in the DRC, while Orezone would be unable to perform any drilling work associated with blasting in the DRC.
In addition, where Orezone became aware of a contract for exploration drilling, as well as drilling and blasting work, it would be required to notify Sentula of the possibility of a combined tender, stated the company.