TIDMCZA
RNS Number : 3399H
Coal of Africa Limited
13 March 2015
ANNOUNCEMENT 13 March 2015
INTERIM FINANCIAL STATEMENTS ANNOUNCEMENT
The Directors of Coal of Africa Limited ("CoAL" or "the
Company") is pleased to announce the interim results for the
Company for the half-year ended 31 December 2014.
Review of Operations
Principal activity and nature of operations
The principal activity of the Company and its subsidiaries is
the exploration and development of coking and thermal coal
properties in South Africa.
The Company's principal coking and thermal coal assets and
projects include:
-- The development phase Vele Colliery, a coking and thermal coal project;
-- The Makhado Project, a coking and thermal coal project, which
is awaiting the granting of a New Order Mining Right ("NOMR");
-- Three exploration stage coking and thermal coal projects,
namely Chapudi, Generaal and Mopane, in the Soutpansberg Coalfield
(the GSP project); and
-- The Mooiplaats Colliery currently on care and maintenance and
subject to a formal sale process.
The Company's focus on safety continued and no lost time
incidents ("LTIs") were recorded during the six months (FY2014 H2:
1 LTI).
Vele Colliery
During the period a historic Biodiversity Offset Agreement
("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, located approximately 30 km from the mine.
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 or
minimised. It is the first of its kind in the mining industry.
The Company previously submitted applications to amend the
colliery's Environmental Authorisation ("EA") to include the
proposed plant modifications. These applications were approved by
the DEA in early CY2015. Subsequent to the receipt of the amended
approval, an intention to object was lodged with the regulatory
authority. The Company has also submitted applications to amend and
renew Vele's Integrated Water Use Licence ("IWUL") and CoAL is
confident these will be received during H1 CY2015. The current Vele
Colliery IWUL is valid until March 2016. Further approvals will be
required with respect to a stream diversion, a process which the
company envisages commencing shortly. The Company has delayed the
commencement of the plant modification construction pending the
receipt of these approvals, which also gives the Company further
time to assess the outlook for coal prices.
The Front-End Engineering Design ("FEED")process for the Vele
Colliery plant modification project undertaken by Sedgman South
Africa was completed during the period. 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 go ahead which
is envisaged to be shortly after the receipt of the approvals
applied for.
Makhado Coking Coal Project
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 consortium comprising seven local communities to
acquire a 20% interest in the Makhado Project and during the period
the Company continued the process of identifying suitable BEE
shareholders to acquire a further 6% interest in the project. These
transactions were formalised subsequent to 31 December 2014 and
will ensure that the Makhado Project has the requisite ownership
structure.
During the December 2014 period 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)
During the reporting period 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.
Current and future funding
During the reporting period CoAL shareholders approved a two
stage equity placement of up to 695 million shares for GBP0.055
raising approximately $64.9 million. The amount was calculated
using an indicative exchange rate of GBP1:$1.70 which had weakened
8.6% to GBP1:$1.55 at the end of the half year, resulting in the
revised expected proceeds of $60 million. The 8.4% weakening of the
ZAR:$ exchange rate between August and December 2014 offsets the
decline in the GBP:$ exchange rate as the Company's future expenses
are predominantly Rand denominated. The required regulatory
approvals for the transaction were received during November 2014
resulting in the issue of 295 million CoAL shares to participants
in the transaction.
During December 2014 the Company announced that it had agreed
with all selected participants to split the second stage of the
placement into two parts. This stage was previously conditional on
receipt from a South African participant, 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 a
further 144 million shares being issued, anticipated to be
completed by the end of April 2015.
Financial review
The loss for the six months under review amounted to $0.8
million, or 0.07 cents per share compared to a loss of $46.3
million, or 4.42 cents per share for the prior corresponding
period.
The loss for the period under review of $0.8 million (H1 2013:
$46.3 million) includes non-cash credits of $16.9 million (H1 2013:
charges of $30.2 million) as follows:
-- Mooiplaats impairment loss of nil ($16.5 million in the six months ended 31 December 2013);
-- net foreign exchange profit of $17.7 million (2013: loss of
$12.5 million) arising from the translation of inter-group loan
balances, borrowings and cash due to changes in the ZAR:AUD
exchange rate during the period;
-- depreciation of $0.3 million (2013: $0.7 million) and
amortisation of $0.5 million (2013: $0.5 million) contributed
further to the non-cash charges.
As at 31 December 2014, the Company had cash and cash
equivalents of $20.6 million compared to cash and cash equivalents
of $2.1 million at 30 June 2014.
Highlights and events after the reporting period
-- The Company received the amended and updated Environmental
Authorisation for the Vele Colliery. The application for the
amendment and extension of the Integrated Water Use License for the
colliery is still to be received, following which the Company will
make a decision as to the timing of the start of the plant
modification at the colliery.
-- Subsequent to 31 December 2014, the Company extended the date
on an non-exclusive basis for which Blackspear Capital
("Blackspear"), a wholly owned subsidiary of Blackspear Holdings
(Pty) Ltd are required to fulfil the conditions precedent for the
sale of Mooiplaats until April 2015, and while the delay is
unwelcome it will not impact on the ability of the Company to
continue with the finalisation of its turnaround strategy.
-- On 13 February 2015 Michael Meeser, Executive Director and
Chief Financial Officer, resigned.
-- Subsequent to 31 December 2014, the Company formalised the
Makhado Project BEE structuring ensuring that the project complies
with South African mining legislation.
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 +44 20
Fenton (United Kingdom) Tavistock 7920 3150
Chris Sim/George
Price/Jeremy Investec Bank +44 20
Ellis Nominated Adviser plc 7597 5970
Charmane Russell/Jane Financial PR Russell & +27 11
Kamau (South Africa) Associates 880 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, development and
mining company operating in South Africa. CoAL's key projects
include the Vele Colliery (coking and thermal coal), the Greater
Soutpansberg Project /MbeuYashu, including CoAL's Makhado Project
(coking and thermal coal).
Coal of Africa (CoAL) invites you to the simultaneous
webcast and conference call for the half year
ended 31 December 2014.
Date: Monday, 13 March 2015
Time: 10:00 (CAT)
The webcast and conference call will be accessible
at http://themediaframe.eu/links/coalofafrica140310.html
or
CoAL's website at www.coalofafrica.com.
TELECONFERENCE
Country Access number
Other countries (International
Toll) +27 11 535 3600
Other countries --
Alternative +27 10 201 6800
South Africa -- Johannesburg 011 535 3600
South Africa -- Johannesburg
Alternative 010 201 6800
UK (Toll-Free) 0 808 162 4061
PLAYBACK: Code 34555
A playback of the teleconference will be available
for 48 hours afterwards on the following telephone
numbers:Country Access number
Other countries (International Toll) +27 11 305 2030
South Africa (Telkom) 011 305 2030
UK (Toll-Free) 0 808 234 6771
View this invitation online at www.coalofafrica.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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