Keaton Energy Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 2006/011090/06)
JSE code: KEH
ISIN code: ZAE000117420
('Keaton' or the ?Company?)
LEGAL DISPUTE BETWEEN KEATON MINING PROPRIETARY LIMITED (KEATON MINING) A 100% HELD
SUBSIDIARY OF THE COMPANY AND MEGACUBE MINING PROPRIETARY LIMITED (MEGACUBE)
Shareholders are referred to the 31 March 2015 Annual Financial Statements of the Company with
specific reference to notes 27 and 30 to the financial statements distributed, which states the
?Included in trade and other payables (note 27) is an amount of R42.5m for contract mining services
rendered by Megacube to Keaton Mining. As a result of several alleged breaches of the contract
mining agreement, Keaton Mining disputes that this amount is due and owing to Megacube. As a result
of Megacube?s breaches of the contract mining agreement, Keaton Mining has lodged several
counterclaims against Megacube for damages and losses sustained. Keaton Mining delivered a notice
of termination of the agreement to Megacube on 16 May 2012 in accordance with the provisions of
the agreement and subsequently terminated the agreement on 5 July 2012. The litigation is ongoing.?
The matter was referred to arbitration which took place during February 2016 and March 2016. On 9
March 2016, and by agreement between the parties, an interim award was made in terms whereof
the merits of the dispute were separated from the quantum. Closing arguments regarding the merits
were heard in April 2016.
The board of directors of the Company is pleased to announce that the following award was made in
favour of the Company on 28 April 2016 regarding the merits of the dispute. The more substantial
claims awarded in favour of the Company are listed below:
1. Megacube?s claim of R42.5m is dismissed with cost;
2. Megacube is liable to compensate Keaton Mining for the damages which flow from its failure to
mine and deliver 300 000 tons of ROM coal per month;
3. Megacube is liable to make payment to Keaton Mining in such an amount equalling the present
value of 657 583.8 tons of ROM coal not mined; and
4. Megacube is directed to pay Keaton Mining?s costs, such costs to include the employment of two
counsel and the qualifying fees of expert witnesses.
The quantum of the disputes will be dealt with in the coming months and a follow up announcement
regarding the outcome of the quantification portion of the arbitration will be released when that part
of the arbitration has been finalised or settled.
The Company?s headline earnings per share for the year ended 31 March 2016 will benefit from the
reversal of the R42.5m claim of Megacube, which was previously recorded in trade and other payables.
3 May 2016
Investec Bank Limited
Date: 03/05/2016 11:00:00 Supplied by www.sharenet.co.za
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