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Keaton Energy Holdings Limited - Trading Statement

Release Date: 23/06/2016 16:54:00      Code(s): KEH     
KEATON ENERGY HOLDINGS LIMITED

(Incorporated in the Republic of South Africa)

(Registration number 2006/011090/06)

JSE code: KEH

ISIN: ZAE000117420

("Keaton Energy" or "the company")

TRADING STATEMENT



The company's reviewed results for the year ended 31 March 2016 are expected to be published on or about 27
June 2016.

Shareholders are advised that the company expects, with reasonable certainty, that earnings per share and
headline earnings per share are to vary by the amounts included in the table below:

                                31 March 2016            31 March 2015
                                (variance)               (re-stated)

 Continuing operations
 Headline earnings per          (16.0) and (17.0)        12.5
 share (cents)
 Earnings per share (cents)     (61.7) and (62.7)        12.6

 Total operations
 Headline earnings per          (26.4) and (27.4)        0.4
 share (cents)
 Earnings per share (cents)     (99.2) and (100.2)      (13.8)


The decrease in earnings per share is mainly attributable to a once-off impairment recognised on the Leeuw
Braakfontein Colliery (LBC) project of R159.2 million and a once-off loss on the initial recognition of a financial
liability of R61.5 million owing to Gunvor SA (Gunvor), the latter also contributed to the decrease in headline
earnings per share.

 The LBC project was planned as a combined export and domestic thermal coal operation. Continued depressed
export pricing and a bleak medium-term outlook on the Richards Bay API4 Index has had a material impact on the
economics of the project. We continue to evaluate alternative options around an exclusively domestic supply
project.

The group entered into a pre-offtake finance arrangement with Gunvor, a wholly owned subsidiary of Gunvor Group
Limited and fellow subsidiary of the group?s largest shareholder Plusbay Limited, for the supply of 600 000 tonnes
of coal to be delivered from the group?s Moabsvelden project over a 22-month period from 1 January 2015 to 31
October 2016 in return for a prepayment of USD4 million. In terms of the agreement the group had to deliver the
first coal to Gunvor by 31 December 2015. The group was unable to achieve this target as the development of
Moabsvelden is still being delayed by the award of an integrated water use licence (IWUL) by the Department of
Water and Sanitation despite every effort by the group to obtain same. The group applied for the IWUL in 2014
when it acquired the project through the acquisition of Xceed Resources Limited. As a result of not being able to
supply first coal by 31 December 2015 to Gunvor, this breach resulted in the recognition of the financial liability.

The comparative information has been re-stated to account for discontinued operations separately. As a result of
the decision taken by the board of directors during September 2015 to dispose of the Vaalkrantz operation, the
Balgray project and the Koudelager project (all part of Leeuw Mining and Exploration Proprietary Limited) as well
as the Mooiklip Coal project (part of Amalahle Exploration Proprietary Limited) these segments were classified as
held-for-sale and discontinued operations.

Shareholders are advised that this information has not been reviewed or reported on by the company's auditors.
This trading statement is issued in terms of the JSE Limited's Listings Requirements.



Bryanston

23 June 2016

Sponsor: Investec Bank Limited

Date: 23/06/2016 04:54:00 Supplied by www.sharenet.co.za                     
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