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Business update and cautionary announcement
The Waterberg Coal Company Limited
(formerly Range River Gold Limited)
(Incorporated in Australia)
(Registration number ABN 64 065 480 453)
ASX: WCC | JSE: WCC | ISIN: AU000000WCC9
(“WCC” or “the Company”)
BUSINESS UPDATE AND CAUTIONARY ANNOUNCEMENT
Shareholders are advised that further to the Company’s quarterly report published on 31 July 2014, the
Company wishes to provide the following business update on its current activities.
1. Update on projects and funding arrangements
1.1 The Eskom Project
The Waterberg Coal Project (“WCP”) was the subject of a Definitive Feasibility Study
(“DFS”). The DFS was prepared in order to comply with the Memorandum of
Understanding (“MOU”) entered into by the project company (Sekoko Coal (Pty) Ltd)
and Eskom on 23 March 2012 for the production and delivery of 10 million tonnes per
annum (mtpa) of coal product from the WCP on a take or pay basis. Pursuant to the
MOU, a 300,000 tonne bulk burn test has also been successfully completed (at the
Majuba Power Station) as part of the Conditions Precedent’s to the MOU.
As at today, discussions with Eskom are ongoing to resolve the outstanding
requirements in order to convert the offtake MOU into a Coal Supply Agreement
(“CSA”). These outstanding requirements include coal specification finalisation, final
pricing, delivery dates and the provision to Eskom of a satisfactory due diligence report
on the DFS. This report is expected to be finalised by the end of October 2014.
During the period that the DFS has been the subject of the independent due diligence
review, the project partners have been in discussions with potential funding parties. The
potential funding for this project is predicated on, inter alia, the completion of the CSA
with Eskom and a satisfactory outcome of the due diligence review. It is anticipated that
it could take up to a period of six to 12 months after receipt of the review report for the
debt funders to provide the project funding.
1.2 The Export Project
Accruing from the substantial technical work on the Eskom Project by the project
partners and due to the anticipated project delay, the project partners have identified the
potential for a stand-alone Export Project.
This project will be subject to a stand-alone definitive feasibility study. The project
partners are presently considering separate funding options for the Export Project.
Shareholders will be updated accordingly in this regard as the strategy is defined.
2. The Convertible Secured Facility (“Facility”)
On 9 April 2013, WCC drew down on the Facility, with a face value of A$35 million, from a
syndicate of Lenders with The Standard Bank of South Africa Limited as facility agent
(the “Lenders”).
The funding from the Facility has been used, inter alia, to acquire a 45.88% shareholding in
Firestone Energy Limited (ASX: FSE) which holds a 60% economic interest in the Waterberg Coal
Joint Venture (“Project”); and to acquire an effective 10% direct interest in the Project through a
25% shareholding in the project company, Sekoko Coal (Pty) Ltd.
The Facility term is 18 months with maturity date being 9 October 2014. It was always
contemplated that either the Lenders would convert their respective portion of the Facility into listed
equity in WCC; or alternatively a portion of the Eskom Project funding facility would be utilised to
retire the amount owing pursuant to the Facility. The delays referred to above have necessitated
the need for the Facility to be restructured. WCC has entered into discussions with the Lenders
with respect to the restructuring of the Facility; including an extension to the Facility’s maturity
date. At the current date such discussions are ongoing and no arrangements have yet been
concluded for the restructure, extension or conversion of the Facility.
3. Update on working capital requirements
The Company has cash and liquid securities totalling $1,002,271. Pending the agreement on
restructuring and extensions of the facility; WCC has arrangements with parties to provide
additional working capital.
4. Cautionary announcement
Further to the information provided in this announcement, WCC will provide shareholders with an
update in terms of funding and working capital requirements in due course.
Accordingly, shareholders are advised to exercise caution when dealing in the Company’s
securities until a further announcement in this regard, is made.
Stephen Miller
Director
The Waterberg Coal Company Limited
16 September 2014
JSE Sponsor
The Standard Bank of South Africa Limited
Market Release
THE WATERBERG COAL COMPANY LIMITED
ABN 64 065 480 453
Registered office:
Level 2, 1 Walker Avenue West Perth, Western Australia 6005
Australia
Tel:+61 8 9485 0888
Fax: +61 8 9485 0077
South African office:
Level 1, The Place,
1 Sandton Dr
Sandton, 2146
South Africa
Tel: +27 10 594 2240
Fax: +27 10 594 2253
Contact:
Mr Stephen Miller
Executive Director/CEO
Or
Investor relations
in South Africa:
Bruce Tinney
+27 (83) 408 3028
E-mail:
info@waterbergcoal.com.au
Directors:
Dr Mathews Phosa (Chairman)
Stephen Miller
(Executive Director and CEO)
Lee Boyd
(Director and Company Secretary)
ASX / JSE Symbol: WCC
Date: 16/09/2014 12:15:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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