TIDMCZA
RNS Number : 5526D
Coal of Africa Limited
30 January 2015
ANNOUNCEMENT 30 January 2015
REPORT FOR THE QUARTER ENDED 31 DECEMBER 2014
Significant Progress for Coal of Africa
Coal of Africa Limited ("CoAL" or "the Company") which operates
in South Africa, together with its subsidiaries, hereby provides
its operational update for the quarter ended 31 December 2014. All
figures are denominated in United States dollars unless otherwise
stated. A copy of this report is available on the Company's
website, www.coalofafrica.com.
Salient Operational Features
-- No lost-time injuries recorded during the quarter (FY2015 Q1: nil).
-- Signature of Biodiversity Offset Agreement ("BOA") for the
Vele Colliery with the Department of Environmental Affairs and
South African National Parks.
-- Work continued on the applications to amend the Environmental
Authorisation ("EA") for the Vele Colliery to include the
anticipated plant modifications, approval for which was received
post 31 December 2014.
-- Sedgman completed the Front End Engineering and Design
("FEED") process for the Vele Colliery plant modification during
the quarter.
Corporate and Financial Features
-- Completion of the first two stages of the three stage equity
placement process raising $46 million net of costs, with the final
stage raising gross proceeds of approximately $14 million, due to
be completed on or around 29 April 2015.
-- Payment of $10 million to Grindrod Corridor Management
Proprietary Limited and Terminal de Carvão da Matola Limitada,
settling all outstanding liabilities and take or pay obligations
until 31 December 2016. Any further obligations would be dependent
on any future capacity requirements still to be contracted.
-- The liability owing to Rio Tinto was reduced during the
quarter on the payment of $6.2 million while discussions continued
on the settlement of the remaining balance of $23.5 million.
-- Settlement of the Investec working capital facility, in
accordance with its terms, during the quarter with the payment of
$5.8 million.
-- Settlement of the last outstanding significant legal matter
following an arbitration award of $1.4 million and $1 million
interest to Envicoal.
-- Continued discussions with stakeholders including the
communities and the Department of Mineral Resources in advancing
the award of the Makhado New Order Mining Right ("NOMR").
-- The Company continued to engage with the Department of Water
Affairs to progress the application for the Makhado Project
Integrated Water Use Licence ("IWUL"), which CoAL anticipates will
be issued after the receipt of the NOMR.
-- Extension of the option period until end CY2015 following
receipt of a further payment of ZAR2.5 million ($0.2 million) for
the sale of Holfontein.
-- Extension for the proof of funding period in terms of the
Sale and Purchase Agreement ("SPA") with Blackspear for the
disposal of the non-core Mooiplaats Colliery until April 2015.
-- Restructuring of rehabilitation guarantees resulted in the
release of R16 million ($1.3 million) of restricted cash.
-- Resignation of David Murray as Senior Non-Executive Director
and appointment of Andrew Mifflin and Thabo Mosololi as
Non-Executive Directors.
-- Available cash at period end was $20.6 million after
settlement of liabilities, payment of operating costs of $3.4
million and restricted cash of $1.9 million.
Post period highlights
-- The Company received the amended and updated EA for the Vele
Colliery. The application for the amendment and extension of the
IWUL for the colliery is still pending, following which the Company
will make a decision as the timing of the start of the plant
modification at the colliery.
Commenting today, Mr David Brown, Chief Executive Officer said:
"The successful completion of two stages of the equity placement
process at a premium to the current CoAL share price is a vote of
confidence in the Company's strategy and the intrinsic value of its
assets, as well as the progress made during the last 18 months. The
third stage of the placement process is expected to be completed
during April 2015, resulting in a successful capital raise in what
are considered to be very tough market conditions for mining
companies, especially junior mining companies. The funds raised
will be utilised to settle historic obligations and progress the
Company's projects which are at various stages of exploration and
development."
QUARTERLY COMMENTARY
Mooiplaats Colliery - Ermelo Coalfield (74% owned)
The Mooiplaats thermal coal colliery ("Mooiplaats Colliery") was
placed on care and maintenance during the September 2013 quarter
and recorded no lost time injuries ("LTIs") during the period
(FY2015 Q1: no LTIs).
During the previous quarter the Company signed an SPA with
Blackspear Capital ("Blackspear"), a wholly owned subsidiary of
Blackspear Holdings Proprietary Limited, for the disposal of the
Mooiplaats Colliery for R250 million ($22.2 million). As announced
on 6 November 2014, Blackspear had agreed terms with a financial
and operational partner to fund its acquisition of Mooiplaats. Post
period end however, Blackspear have informed the Company they are
no longer engaged in discussions with their proposed partner and as
a result are seeking an alternative partner. However, given current
market conditions, the Company and Blackspear have agreed an
extension on a non-exclusive basis for Blackspear to meet the proof
of funding condition precedent until 30 April 2015.
Vele Colliery - Limpopo (Tuli) Coalfield (100% owned)
The Vele coking and thermal coal colliery ("Vele Colliery")
recorded no LTIs during the quarter (FY2015 Q1: no LTIs).
During the quarter a historic BOA was signed by the Department
of Environmental Affairs ("DEA"), South African National Parks
Board ("SANparks") and CoAL to the value of R55 million ($4.7
million) over a 25 year period. The BOA is intended to promote the
development of Mapungubwe so that it benefits the environment, the
local economy and resident communities and provides an appropriate
framework to manage the interface between mining operations and the
Mapungubwe World Heritage Site.
The BOA is based on the ecosystem approach to biodiversity
management, promoting the integrated management of land, water and
natural capital and enhance co-operation between the three parties
towards the conservation and sustainable development of the
Mapungubwe World Heritage Site, safeguarding its integrity and
ensuring that the negative impacts of development are avoided,
minimised or remedied.
The Company previously submitted applications to amend the
colliery's EA to include the plant modifications. These
applications were approved by the DEA in early CY2015. The Company
has also submitted applications to amend and renew Vele's IWUL and
CoAL is confident these will be received during H1 CY2015. The
current Vele Colliery IWUL is valid until March 2016 and the
Company has delayed the commencement of the plant modification
construction to Q3 CY2015 pending these approvals, which also gives
the Company further time to assess the outlook for coal prices.
The FEED process for the Vele Colliery plant modification
project undertaken by Sedgman South Africa was completed during the
quarter. Changes to the plant modification design have resulted in
a shortened construction period with the improvements resulting in
the simultaneous production of semi-soft coking coal and thermal
coal and the next stage of detailed design will commence upon
project execution.
Makhado Coking Coal Project - Soutpansberg Coalfield (100%
owned)
The Makhado coking coal project ("Makhado Project") recorded no
LTIs (FY2015 Q1: no LTIs) during the quarter.
As required under South African mining legislation, a minimum
26% black economic empowerment ("BEE") shareholding is required for
mining and exploration projects. CoAL previously signed a
Memorandum of Agreement to enable a Broad Based Black Economic
Empowerment ("BBBEE") consortium comprising seven local communities
to acquire a 20% interest in the Makhado Project, subject to
funding, and during the quarter the Company continued the process
of identifying suitable BEE shareholders to acquire a further 6% of
the project. These transactions will ensure that the Makhado
Project has the requisite corporate structure for the granting of
the NOMR.
During the quarter an interim court interdict was issued against
the Makhado Project seeking to halt any mining or construction
activity on the site. The Company, as one of the respondents, has
commenced work with the other respondents to set aside the interim
interdict. CoAL does not anticipate that this process will impede
on the delivery timetable for the mine to come into commercial
production during CY2019 as no construction or mining activities
are anticipated during CY2015.
Greater Soutpansberg Project (MbeuYashu) (74% owned)
The MbeuYashu Project recorded no LTIs (FY2015 Q1: no LTIs)
during the period.
During the quarter the Company continued to engage with
stakeholders, in particular communities, in relation to the Greater
Soutpansberg Project which comprises the Generaal, Chapudi and
Mopane projects.
Corporate Update
During the previous quarter CoAL shareholders approved a two
stage equity placement for the issue of up to 695 million shares
for GBP0.055 raising approximately $64.9 million. This balance was
calculated in August 2014 using an indicative exchange rate of
GBP1:$1.70 which had weakened 8.6% to GBP1:$1.55 at the end of the
quarter, resulting in the revised expected proceeds of $60 million.
The 8.4% weakening of the ZAR:$ exchange rate between August and
December 2014 partially mitigated the decline in the US$ receipts
as the Company's future expenses are predominantly Rand
denominated. The required regulatory approvals for stage 1 were
received during November 2014 resulting in the issue of 295 million
CoAL shares.
During December 2014 the Company announced that it had agreed
with all participants in the equity placement to split the second
stage of the placement into two parts. This stage was previously
conditional on receipt from TMM Holdings (Pty) Ltd, of confirmation
that it had received sufficient funding to fulfil its second stage
funding commitment. The second stage of the equity placement was
completed during December 2014 with the issue of 300 million
ordinary shares and the third stage will result in the issue of 144
million shares, anticipated to be completed by April 2015.
Authorised by
David Brown
Chief Executive Officer
30 January 2015
For more information contact:
Chief Executive +27 10 003
David Brown Officer Coal of Africa 8000
Chief Financial +27 10 003
Michael Meeser Officer Coal of Africa 8000
+27 10 003
Celeste Harris Investor Relations Coal of Africa 8000
Endeavour Corporate +61 08 9316
Tony Bevan Company Secretary Services 9100
Company advisors:
Jos Simson/Emily Financial PR (United +44 20 7920
Fenton Kingdom) Tavistock 3150
Chris Sim/George Investec Bank +44 20 7597
Price/Jeremy Ellis Nominated Adviser plc 5970
Charmane Russell/Jane Financial PR (South Russell & Associates +27 11 880
Kamau Africa) 3924 or
+27 82 372
5816
Investec Bank Limited is the nominated JSE Sponsor
About CoAL:
CoAL is an AIM/ASX/JSE listed coal exploration and development
company operating in South Africa. CoAL's key projects include the
Vele Colliery (coking and thermal coal), Makhado Project (coking
and thermal coal) and the Greater Soutpansberg Project
/MbeuYashu.
Tenements held by CoAL and its Controlled Entities
Change in
Project Name Tenement Number Location Interest quarter
----------------- -------------------------------------------------- ------------- --------- -----------------
Chapudi Project* Albert 686 MS- Limpopo 74%
Bergwater 712 MS-- 74%
Remaining Extent and Portion 2 of Bergwater 697
MS-- 74%
Blackstone Edge 705 MS 74%
Remaining Extent & Portion 1 of Bluebell 480 MS- 74%
Remaining Extent & Portion 1 of Bushy Rise 702
MS-- 74%
Castle Koppies 652 MS-- 74%
Chapudi 752 MS -- 74%
Remaining Extent, Portions 1, 3 & 4 of Coniston
699 MS-- 74%
Driehoek 631 MS-- 74%
Remaining Extent of Dorps-rivier 696 MS-- 74%
Enfield 512 MS (consolidation of Remaining Extent
of Enfield 474 MS, Brosdoorn 682 MS & Remaining
Extent of Grootvlei 684 MS)-- 74%
Remaining Extent and Portion 1 of 74%
Grootboomen 476 MS- 74%
Grootvlei 684 MS-- 74%
Kalkbult 709 MS 74%
Remaining Extent, Remaining Extent of Portion 2,
Remaining Extent of Portion 3, Portions 1,
4, 5, 6, 7 & 8 of Kliprivier 692 MS- 74%
Remaining Extent of Koodoobult 664 MS- 74%
Koschade 657 MS (Was Mapani Kop 656 MS)- 74%
Malapchani 659 MS- 74%
Mapani Ridge 660 MS- 74%
Melrose 469 MS- 74%
Middelfontein 683 MS- 74%
Mountain View 706 MS- 74%
M'tamba Vlei 654 MS 74%
Remaining Extent & Portion 1 of Pienaar 635 MS- 74%
Remaining Extent & Portion 1 of Prince's Hill 704
MS- 74%
Qualipan 655 MS- 74%
Queensdale 707 MS- 74%
Remaining Extent & Portion 1 of Ridge End 662 MS- 74%
Remaining Extent & Portion 1 of Rochdale 700 MS- 74%
Sandilands 708 MS- 74%
Portions 1 & 2 of Sandpan 687 MS-- 74%
Sandstone Edge 658 MS- 74%
Remaining Extent of Portions 2 & 3 of Sterkstroom
689 MS-- 74%
Sutherland 693 MS- 74%
Remaining Extent & Portion 1 of Varkfontein 671
MS-- 74%
Remaining Extent, Portion 2, Remaining Extent of
Portion 1 of Vastval 477 MS- 74%
Vleifontein 691 MS- 74%
Ptn 3, 4, 5 & 6 of Waterpoort 695 MS-- 74%
Wildebeesthoek 661 MS- 74%
Woodlands 701 MS- 74%
-------------------------------------------------- ------------------------------- --------- -----------------
Kanowna West and M27/41 Coolgardie^ 23.68%
-------------
Kalbara M27/47 23.68%
-------------
M27/59 23.68%
M27/72,27/73 23.68%
M27/114 23.68%
M27/181 21.31%
M27/196 23.68%
M27/414,27/415 23.68%
P27/1826-1829 23.68%
P27/1830-1842 23.68%
P27/1887 23.68%
-------------------------------------------------- ------------------------------- --------- -----------------
Abbotshall ML63/409,410 Norseman^ Royalty
Royalty
----------------- -------------------------------------------------- ------------- --------- -----------------
Kookynie Royalty ML40/061 Leonora^ Royalty
ML40/135,136 Royalty
----------------- -------------------------------------------------- ------------- --------- -----------------
Remaining extent, Remaining Extent of portions 1,
5 and 11 and portions 4, 6, 9, 10, 12 and
Holfontein 13 of the farm Holfontein 138 IS Mpumalanga 100%
----------------- -------------------------------------------------- ------------- --------- -----------------
Makhado Project Fripp 645 MS Limpopo 100%
Lukin 643 MS 100%
Remaining Extent and Portion 1 of Overwinning 713
MS 100%
Salaita 188 MT 100%
Tanga 648 MS 100%
Remaining Extent, Portion 1 and
Portion 2 of the farm Windhoek 649 MS 100%
Generaal Project Beck 568 MS-- Limpopo 74%
Bekaf 650 MS- 74%
Remaining Extent & Portion 1 of Boas 642 MS- 74%
Chase 576 MS- 74%
Coen Britz 646 MS- 74%
Fanie 578 MS- 74%
Gray 189 MT 100%
Portions 1, 2 and Remaining Extent of Generaal
587 MS- 74%
Joffre 584 MS- 74%
Juliana 647 MS 74%
Kleinenberg 636 MS- 74%
Remaining Extent of Maseri Pan 520 MS- 74%
Remaining Extent and Portion 2 of Mount Stuart
153 MT-- 100%
Nakab 184 MT-- 100%
Phantom 640 MS-- 74%
Riet 182 MT-- 100%
Rissik 637 MS- 100%
Salaita 188 MS- 74%
Schuitdrift 179 MT- 100%
Septimus 156 MT-- 100%
Solitude 111 MT- 74%
Stayt 183 MT-- 100%
Telema 190 MT 100%
Remaining Extent & Portion 1 of Terblanche 155
MT-- 100%
Van Deventer 641 MS- 74%
Wildgoose 577 MS- 74%
-------------------------------------------------- ------------------------------- --------- -----------------
Mopane Project* Ancaster 501 MS-- Limpopo 100%
Banff 502 MS- 74%
Bierman 599 MS- 74%
Cavan 508 MS 100%
Cohen 591 MS-- 100%
Remaining Extent, Portions 1 & 2 of Delft 499 MS- 74%
Dreyer 526 MS-- 74%
Remaining Extent of Du Toit 563 MS- 74%
Faure 562 MS 74%
Remaining Extent and Portion 1 of Goosen 530 MS
-- 74%
Hermanus 533 MS- 74%
Jutland 536 MS-- 100%
Krige 495 MS- 74%
Mons 557 MS- 100%
Remaining Extent of Otto 560 MS (Now Honeymoon)- 74%
Remaining Extent & Portion 1 of Pretorius 531 MS- 74%
Schalk 542 MS- 74%
Stubbs 558 MS- 100%
Ursa Minor 551 MS-- 74%
Van Heerden 519 MS-- 74%
Portions 1, 3, 4, 5, 6, 7, 8, 9, Remaining Extent
of Portion 10, Portions 13, 14, 15, 16,
17, 18, 19, 20, 21, 22, 23, 24, 26, 27, 29, 30,
35, 36, 37, 38, 39, 40, 41, 44, 45, 46, 48,
49, 50, 51, 52 & 54 of Vera 815 MS 74%
Remaining Extent of Verdun 535 MS- 74%
Voorburg 503 MS-- 100%
Mooiplaats
Colliery and Portions 1, 9,14,17,18,19,20 & Remaining Extent
prospects of Mooiplaats 290 IT Mpumalanga 74%
Portion 2, 3 and Remaining Extent of Klipbank 295
IT 74%
Portions 1, 2 and Remaining Extent of
Adrianople296 IT 74%
Portions 2 & 3 of Willemsdal 330 IT 74%
Portions 2, 3, 4 & Remaining Extent) of De
Emigratie 327 IT 74%
Remaining Extent and Portions 2, 5, 8,10 & 13 of
Buhrmansvallei 297 IT 74%
Klipfontein 442 IT 74%
Vele Colliery Portions of Overvlakte 125 MS (Remaining Extent,
and prospect 3, 4, 5, 6, 13, 14) Limpopo 100%
Bergen Op Zoom 124 MS 100%
Semple 155 MS 100%
Voorspoed 836 MS 100%
Alyth 837 MS 100%
Lizzuela 62 MS 100%
Patracia 65 MS 100%
Hacyon 69 MS 100%
-------------------------------------------------- ------------------------------- --------- -----------------
Certain portions of Unsurveyed State Land known
Tshikunda as Mutale Limpopo 60%
----------------- -------------------------------------------------- ------------- --------- -----------------
Coal bed methane Adelaide 91 MT Limpopo 50%
Adieu 118 MT 50%
Alicedale 138 MT 50%
Armstice 120 MT 50%
Bergwater 697 MS 50%
Bergwater 712 MS 50%
Blackstone Edge 705 MS 50%
Bushy Rise 702 MS 50%
Chapudi 752 MS 50%
Charlotte 90 MT 50%
Chase 576 MS 50%
Cross 117 MT 50%
Doppie 95 MT 50%
Ettie 33 MT 50%
Fanie 578 MS 50%
Feskraal 85 MT 50%
Folorodwe 79 MT 50%
Fripp 645 MS 50%
Gray 189 MT 50%
Hettey 93 MT 50%
Jeannette 77 MT 50%
Joffre 584 MS 50%
Kalkbult 709 MS 50%
Laura 115 MT 50%
Lukin 643 MS 50%
Magazasand 123 MT 50%
Malapchani 659 MS 50%
Mountainview 706 MS 50%
Mount Stuart 153 MT 50%
Nakab 184 MT 50%
Naus 178 MT 50%
Neltox 92 MT 50%
Phantom 640 MS 50%
Prince's Hill 704 MS 50%
Queensdale 707 MS 50%
Riet 182 MT 50%
Rochdale 700 MS 50%
Rynie 158 MT 50%
Salaita 188 MT 50%
Schuitdrift 179 MT 50%
Septimus 156 MT 50%
Stayt 183 MT 50%
Suzette 32 MT 50%
Tanga 648 MS 50%
Telema 190 MT 50%
Terblanche 155 MT 50%
Trevenna 119 MT 50%
The Duel 186 MT 50%
Truida 76 MT 50%
Van Deventer 641 MS 50%
Wendy 86 MT 50%
Wildgoose 577 MS 50%
Windhoek 649 MS 50%
Zisaan 31 MT 50%
Ziska 122 MT 50%
Portion of Unsurveyed state land 50%
-------------------------------------------------- ------------------------------- --------- -----------------
* Form part of the Greater Soutpansberg Project
- Lapsed - Mining Right Application Lodged
-- Valid - Mining Right Application Lodged
Tenement located in the Republic of South Africa
^ Tenement located in Western Australia
This information is provided by RNS
The company news service from the London Stock Exchange
END
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