Coal of Africa (LON:CZA) has found a partner for its Makhado project in Limpopo, South Africa after a Singapore investment company bought around 10% of the company.
Singapore-based Yishun Brightrise has agreed to buy 183mln shares in the company (9.5%) for £9.4mln (5.15p per share), with Coal of Africa hoping for further investment.
Yishun, a private investment company, is looking at expanding into Africa having already bought interests in coal and nickel in both China and Indonesia.
Coal of Africa has also entered into a US$10mln loan agreement with Yishun, which the company will put towards progressing its Makhado project.
David Brown, chief executive said: "Yishun's investment in Coal of Africa, combined with the US$10 million loan to the company represents a significant step forward in the process to identify a strategic partner for our flagship Makhado hard coking and thermal coal project.
The funds will be used for pre-construction costs at Makhado, which is currently waiting for an integrated water use licence.
Both the loan and share purchase are subject to shareholder approval.
Shares rose 10.5% to 4.75p today.