Sentula Mining Ltd. gained in Johannesburg trading after the South African company accepted a 686 million-rand ($92 million) bid for its stake in Siyanda Coal Ltd., a transaction that would end the need to raise cash in a rights offer.

The stock added as much as 66 cents, or 23 percent, to 3.51 rand, and traded at 3.38 rand as of 11:46 a.m. in Johannesburg. Sentula’s board accepted a conditional offer from a Noble Group Ltd. venture for its 49.9 percent stake in the Koornfontein coal mine operated by Siyanda, the company said in a stock exchange statement today.

Sentula needs to pay 400 million rand to its funders by Nov. 30 or “incur significant penalties on its existing debt,” it said. The sale depends on how fast the buyers complete a due diligence study of the mine, Sentula said.

“Significant progress” has been made regarding the company’s proposed 500 million-rand rights offer, it said. The rights offer may be abandoned if Koornfontein can be sold in time.

Sentula has until Oct. 30 to scrap the share sale. The disposal of the mine is the company’s preferred means of recapitalization, it said.

Find More Other News : Coal, Mining Finance, Mining Investment, mining companies