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FINANCIAL RESTRUCTURE UPDATE
FIRESTONE ENERGY LIMITED
(Incorporated in Australia)
(Registration number ABN 058 436 794)
Share code on the JSE Limited: FSE
Share code on the ASX: FSE
ISIN: AU000000FSE6
(SA company registration number 2008/023973/10)
("FSE" or "the Company")
About Firestone Energy
Firestone Energy Limited is an
independent, Australian exploration and
development company listed on the
20 November 2012
Australian Stock Exchange Ltd (ASX) and
the Johannesburg Stock Exchange (JSE).
Firestone Energy has entered into a Joint
Financial Restructure Update Venture with Sekoko Resources (Pty) Ltd
through which Firestone Energy has
acquired the right to 60% participation
interests in the Waterberg Coal Project
The Board of Firestone Energy Limited (ASX/JSE: FSE) (the “Company” or located in Lephalale area, Limpopo Province,
“Firestone”) is pleased to update shareholders with the progress of the financial South Africa.
restructuring and the Investment Agreement that it has executed with Ariona
The first stage of the project is to develop the
Company SA (“Ariona”).
Smitspan mine which has a substantial
measured thermal coal resource and to
As previously communicated to the market on 7 May 2012, Firestone announced develop the Vetleegte mine which is a
it entered into an Investment Agreement with Ariona for a financial restructure of substantial metallurgical coal deposit.
Firestone. The Company has received shareholder approval for the proposed
financial restructure which included A$40.7 million funding facility from Ariona. Firestone Energy is committed to becoming a
profitable independent coal and energy
Ariona has since requested, and the Board of Firestone have approved, a term producer at its projects in South Africa,
sheet to effect a variation to the Investment Agreement to reflect the changed thereby making a substantial contribution to
the social and economic development of the
settlement terms, which can be summarised as follows;
Lephalale area and South Africa.
Settlement is now to occur in a two stage process, namely; Corporate Details
ASX: FSE
JSE: FSE
• Stage 1 settlement involves Firestone issuing approximately A$26million
of new convertible notes (“NCN’s”) to Ariona which will comprise: Issued Capital:
o the injection of A$4million of cash into Firestone; and 3,114 million ordinary shares
o the replacement of the A$22.1million of existing convertible Major Shareholders:
notes ("ECNs"). Sekoko Resources (Pty) Ltd
Linc Energy Ltd
• Stage 1 Settlement is to occur within 2 Business days of all parties BBY Nominees Pty Ltd
entering into a Deed of Variation reflecting the variations agreed in the Bell Potter Nominees Ltd
Termsheet;
Directors and Officers
Stage 2 Settlement which is scheduled to occur before 7 December 2012,
involves Firestone issuing approximately A$12.50million of NCNs to Non Executive Directors:
Mr Tim Tebeila (Chairman)
Ariona which will be applied to additional working capital. David Perkins (Deputy Chairman)
• In addition, Ariona will interim fund the working capital requirements of Dr Pius Kasolo
Firestone by providing A$250,000 per week, up to a maximum of A$1 million Ben Mphahlele
Kobus Terblanche
Officers:
The working capital component of the Ariona amended settlement will be loaned Mr David Knox CEO
Ms Amanda Matthee CFO
to Firestone on an interest free and unsecured basis until the stage 1 settlement Mr Jerry Monzu Company Secretary
occurs. In the event that stage 1 settlement does not occur then the amount of
working capital loaned (of up to A$1million) will convert into equity at the Contact:
prevailing market price on the date of conversion. Upon completion of the stage Suite B9, 431 Roberts Road
1 settlement process the full amount of working capital that has been drawn down Subiaco, Western Australia 6008
(of up to A$1 million) will roll into the NCN's. Tel: +61 (08) 9287 4600
Web: www.firestoneenergy.com.au
Conditions
The variation of the Investment Agreement to a two stage settlement process (but not the interim
funding) is subject to a number of conditions, the principal ones being:
• a review to ensure that it is compliant with the shareholder approvals received at a General
Meeting of the Firestone held on 5 October 2012; and
• execution of a formal Deed of Variation by 28 November 2012.
The net effect of the variations on Firestone are that:
• The Company will receive A$17.55million of net new funding compared with A$18.55 million
under the current Investment Agreement; and
• All the net new funding will be received by 7 December 2012 rather than over 12 months from
5 October 2012 i.e. by 5 October 2013. The two stage settlement provides more working
capital for Firestone in this calendar year which will be applied to the advancement of the
Waterberg Coal Project.
Yours sincerely,
David Knox
Chief Executive Officer
www.firestoneenergy.com.au
Tel: Australia (+61 08 9287 4600)
South Africa (+27 11 706 3548)
SPONSOR
River Group
Johannesburg
20 November 2012
2
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