TIDMCZA
RNS Number : 6938Y
Coal of Africa Limited
10 September 2015
ANNOUNCEMENT 10 September 2015
FULL YEAR RESULTS FOR THE PERIOD ENDING JUNE 2015
Coal of Africa Limited ("CoAL" or the "Company") is pleased to
provide its Annual Financial Statements for the year ended 30 June
2015. The full report is available on the Company's website:
www.coalofafrica.com.
Highlights:
-- No fatalities (FY2014: none) and no lost time injuries
recorded during the year (FY2014: one);
-- Significant decrease in loss for the year of US$6.7 million (2014: US$84.1 million);
-- No modification to Going Concern opinion for period ending
June 2015, first since FY 2011; and
-- Completion of the US$65 million (before charges and foreign
currency movements) shareholder approved three stage equity
investment process.
Makhado ("Makhado" or the "Project"):
-- In May 2015 the Department of Mineral Resources ("DMR")
granted the Company a New Order Mining Right ("NOMR") for Makhado
as well as Section 11 approval transferring the Project from CoAL
to its subsidiary Baobab Mining (Pty) Ltd; and
-- Continued engagements with the Department of Water Affairs
("DWA") to progress the application for Makhado's Integrated Water
Use License ("IWUL"), expected to be granted in the second half of
2015.
Vele Colliery ("Vele" or the "Colliery"):
-- Approval granted for the amended and updated Environmental
Authorisation ("EA") for Vele to include the anticipated plant
modifications while the application for the amendment and extension
of the IWUL for the colliery is anticipated to be granted in due
course, following which the Company will make a decision on the
timing of the start of the plant modifications;
-- Historic Biodiversity Offset Agreement for the Colliery
signed in October 2014 with the Department of Environmental Affairs
("DEA") and South African National Parks; and
-- Completion in December 2014 of the Front End Engineering and
Design ("FEED") process for the Colliery plant by independent
consultants, Sedgman.
General:
-- Restructuring of rehabilitation guarantees resulted in the
release of US$4.7 million of restricted cash;
-- Conclusion of agreements in March 2015 with BBBEE partners to
acquire up to 26 per cent of Makhado. The BBBEE partners have two
years to raise sufficient capital to acquire their interests in the
project with the final amount payable subject to due diligence and
will be negotiated with the Company;
-- Agreement reached for the US$19.8 million liability (FY2014:
US$29.8 million) owing to Rio Tinto with the balance to be paid in
monthly instalments of at least US$100,000 plus interest and the
obligation settled by June 2017. During the year the Company paid
capital of US$10 million (FY2014: US$0.2 million) and acccrued
interest of US$1.6 million (FY2014: nil);
-- Payment of US$10 million to Grindrod Corridor Management
Proprietary Limited and Terminal de Carvão da Matola Limitada in
late 2014, 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;
-- Settlement of the Investec Bank Limited working capital
facility in November 2014 on the payment of US$5.9 million;
-- Settlement of Envicoal Litigation matter; and
-- Appointment of De Wet Schutte as Chief Financial Officer and
Executive Director of the Company.
Future developments
The NOMR for Makhado was granted in May 2015 as well as section
11 approval for the transfer of the Project to CoAL's 74 per cent
owned subsidiary, Baobab Mining. The Company completed a Definitive
Feasibility Study ("DFS") for Makhado during FY2013 which indicated
that the Project has 344.8 million mineable tonnes in situ and a 16
year life of mine. CoAL has regular interactions with the DWA and
expects that the IWUL for Makhado will be granted in the second
half of 2015 with the 26 month construction phase due to commence
in the second half of 2016, post receipt of the IWUL. The opencast
project is expected to produce 12.6 million tonnes per annum
("Mtpa") of run of mine ("ROM") coal yielding 2.3Mtpa of hard
coking coal and 3.2Mtpa of thermal coal for domestic and export
markets.
The Company also completed the FEED process for Vele. Once
constructed, the Colliery will be able to produce multiple products
simultaneously. The amended EA for the Colliery was granted during
FY2015 and the Company anticipates that the application for an
amendment and extension of the Vele's IWUL will be granted in due
course. The Colliery's current IWUL expires in March 2016. In
addition the Company has applied for additional permissions
relating to a diversion to a non-perennial stream and following the
granting, CoAL will make a decision on the commencement of the
plant modifications taking cognisance of prevailing market
conditions into account. This is expected to take place towards the
end of June 2016.
The exploration and development of CoAL's prospects in the
Soutpansberg coalfield are the catalyst for the long-term growth of
the Company. The DMR has accepted the Company's NOMR applications
for the Mopane, Generaal and Chapudi projects, all forming part of
the MbeuYashu Project.
Financial review
No revenue was generated during the year as result of all
operations on care and maintenance (FY: 2014 US$3.3 million
generated by Mooiplaats).
Non-cash charges of US$7.5 million (FY2014: US$54.3 million)
including:
-- No impairment recorded during the year (FY2014: US$14.9 million on Mooiplaats);
-- Depreciation and amortisation of US$1.4 million (FY2014: US$2.2 million);
-- Unrealised foreign exchange gain of US$18.9 million (FY2014:
US$36.4 million loss) as a result of the South African rand
weakening against the US dollar; and
-- Share based payment expense of US$3.1 million (FY2014: US$0.7 million).
Total unrestricted cash balances at year-end, including cash
held by operations available for sale of US$17.8 million (FY2014:
US$2.1 million).
Chief Executive Officer, David Brown, commented:
"The financial results for the year ended 30 June 2015 reflect
the success of the turn-around-strategy that was necessary for CoAL
to be able to continue its significant progress within the current
prevailing market conditions. The Company has resolved legacy
issues, strengthened its balance sheet and made positive progress
with respect to its flagship asset, the Makhado hard coking and
thermal coal project. The next financial year will demonstrate the
continued execution of the Company's strategy with the focus on
securing project financing for Makhado."
For more information contact:
Chief Executive +27 10 003
David Brown Officer Coal of Africa 8000
Chief Financial +27 10 003
De Wet Schutte Officer Coal of Africa 8000
+27 10 003
Celeste Riekert Investor Relations Coal of Africa 8000
Endeavour Corporate +61 08 9316
Tony Bevan Company Secretary Services 9100
Company advisors:
Financial
Jos Simson/Emily PR (United +44 20 7920
Fenton Kingdom) Tavistock 3150
Matthew Armitt/Ross Nominated +44 20 7418
Allister Adviser Peel Hunt LLP 8900
Charmane Russell/Jane Financial Russell & Associates +27 11 880
Kamau PR (South 3924 or
Africa) +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).
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR KMGMLGGVGKZM
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