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Quarterly Activities Report: June 2016
The Waterberg Coal Company Limited
(Incorporated in Australia)
(Registration number ABN 64 065 480 453)
ASX: WCC | JSE: WCC | ISIN: AU000000WCC9
(“WCC” or “the Company”)
Quarterly Activities Report: June 2016
The Waterberg Project
The Waterberg Coal Company Limited (the Company) is a participant
in the Waterberg coal project joint venture (the Waterberg
Project), situated in the Limpopo Province, South Africa. The
Waterberg Project currently has identified coal resources of 3.4
billion tonnes of coal contained within the granted mining and
prospecting rights (Appendix 1).
Accruing from the various work streams and technical studies that
have been carried out to date, the Waterberg Project now comprises
the following projects:
- The Export Project
- The Eskom Project; and
- The IPP Project.
The Company has continued to focus on engaging with prospective
working capital and project development financiers during the
quarter.
During March 2016 the Company announced that it was in discussions
with AME International Limited (AME) to assist in recapitalisation
of the Company’s balance sheet (Recapitalisation), and the
provision of working capital for advancing the Waterberg Project
(Refinancing). Albeit somewhat drawn out, these discussions
continue with AME and others.
AME has now advised the Company that, as part of the Refinancing
process, it has entered into a term sheet with Sekoko Coal (Pty)
Ltd (Sekoko), the South African registered company which holds
the prospecting and mining rights (Assets) which form the
Waterberg Project. The Term sheet is for a proposed share
subscription (Subscription) in Sekoko with a view to AME acquiring
a 20% interest in Sekoko. The Company, through its wholly owned
subsidiary Ariona Company SA, has a 25% shareholding in Sekoko;
which ultimately reflects a 10% interest in the Waterberg Project.
As at the date of this report, the legal documentation and
conditions precedent are still under construction.
The funding accruing from the Subscription is necessary to fund
the operational requirements of the Waterberg Project and its
creditors. Further delays in completing the Refinancing of Sekoko
may necessitate that Sekoko apply for voluntary business rescue
to enable it to continue with the restructuring and/or refinancing
in this fashion.
The Company is in discussion with existing shareholder and
investor parties with a view to concluding a short term bridging
loan until the Recapitalisation is completed so as to avert the
above.
Given that the see through interest in the Assets is effectively
the Company’s major asset and therefore material to its future
success, failure to avert business rescue for Sekoko may have
similar flow on ramifications for the Company itself.
Assets Held For Sale
South Australian Tenements
The Company holds exploration tenements EL5221 and EL5758 in
the Gawler Craton region of South Australia. These
exploration tenements are not considered to be core to its
future business prospects and expressions of interest from
potential buyers continues to be sought.
The sale of exploration tenement EL5397 as originally
announced on 29 September 2015 was completed during the
quarter with the receipt of the final cash payment of $75,000
on registration of the transfer of the tenement. An ongoing
1% net smelter royalty for the benefit of the Company for any
type of ore mined on the tenement applies. The proceeds were
applied to general working capital.
Listed Securities
During the quarter the Company disposed of its residual share
holding in AIM listed Global Resources Investment Trust
(GRIT). The proceeds were applied to general working capital.
Other
The company remains in voluntary suspension from trading on ASX
and JSE pending the outcome of the Recapitalisation and
Refinancing activities mentioned above.
E L Boyd
Director and Company Secretary
The Waterberg Coal Company Limited
Coal Resource on all six Waterberg Coal Project Properties under
both Prospecting Permit and Mining Right
Resource Coal Ash % IM % Vol % CV TS %
Classification Resource* (ad) (ad) (ad) (Mj/kg) (ad)
(Mt) (ad)
Measured 1314.51 57.6 2.2 17.9 10.7 1.00
Indicated 1247.2 57.4 2.3 17.8 10.7 1.13
Inferred 838 58.5 2.2 17.6 10.4 1.19
Total 3400 57.7 2.2 17.8 10.6 1.09
Resources
*Coal resource is based on a minimum thickness cut-off of 0.5m
08 August 2016
JSE Sponsor: The Standard Bank of South Africa Limited
1 Please note that this information was prepared and first disclosed under the
JORC Code 2004. It has not been updated since to comply with the JORC Code
2013 on the basis that the information has not materially changed since it was
last reported.
2 Competent Person Statement - Gemecs (Pty) Limited was commissioned by the
Company to undertake an Updated Independent Persons Geological Report for the
Waterberg Coal Project. The Coal Resources were estimated in accordance with
the South African code for the Reporting of Exploration Results, Mineral
Resources and Mineral Reserves (SAMREC Code), Australasian Code for Reporting
of Exploration Results. Mineral Resources and Ore Reserves (the JORC Code)
and South African National Standard (SANS 10320:2004) guidelines. The
information in this report that relates to Exploration Results, Mineral
Resources or Ore Reserves is based on information compiled by
Mr Coenraad D van Niekerk, Pr.Sci.Nat (Reg. No 400066/98), M.Sc Hons
(Geology), MDP, an employee of Gemecs (Pty) Limited, who is a Fellow of the
Geological Society of South Africa. Mr Coenraad D van Niekerk is a mining
geologist with 38 years’ experience in the mining industry, sufficient
experience relevant to the style of mineralisation and type of deposit under
consideration and to the activity which he is undertaking to qualify as a
Competent Person as defined in the 2004 Edition of the Joint Ore Reserves
Committee (JORC) “Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves”. Mr Coenraad D van Niekerk consents to
the inclusion in the report of the matters based on his information in the
form and context in which it appears. Any discrepancy is due to rounding.
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