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NOTICE OF GENERAL MEETING AND EXPLANATORY MEMORANDUM TO SHAREHOLDERS
Coal of Africa Limited
(Incorporated and registered in Australia)
(Registration number ABN 008 905 388)
ISIN AU000000CZA6
JSE/ASX/AIM share code: CZA
("CoAL or the "Company" or the "Group")
ABN 98 008 905 388
NOTICE OF GENERAL MEETING
AND EXPLANATORY
MEMORANDUM TO
SHAREHOLDERS
Date of Meeting
11 September 2012
Time of Meeting
11.00 am (London time)
Place of Meeting
Tavistock Communications
8th Floor
131 Finsbury Pavement
London EC2A 1NT
A Proxy Form is enclosed
Please read this Notice and Explanatory Memorandum carefully.
If you are unable to attend the General Meeting please complete and return the enclosed Proxy Form
in accordance with the specified directions.
Coal of Africa Limited
3. Resolution 3 – Proposed issue of Shares –
ABN 98 008 905 388 Placement Tranche 2
NOTICE OF GENERAL MEETING To consider and, if thought fit to pass the following
resolution as an ordinary resolution:
Notice is hereby given that a General Meeting of
Shareholders of Coal of Africa Limited ABN 98 "That, for the purpose of Listing Rule 7.1 and all other
008 905 388 will be held at 11.00 am (London time) purposes, the Company approves the allotment and issue
on 11 September 2012 at Tavistock of up to 34,908,632 Shares at an issue price of GBP0.25
Communications, 8th Floor, 131 Finsbury (3.25 Rand) each as more particularly described in the
Pavement, London EC2A 1NT for the purpose of Explanatory Memorandum accompanying the Notice of
transacting the following business referred to in Meeting ".
this Notice of General Meeting.
The Company will disregard any votes cast on Resolution 3 by
any person who may participate in the proposed issue and any
person who might obtain a benefit, except a benefit solely in the
AGENDA capacity of a holder of ordinary shares if the resolution is passed,
ITEMS OF BUSINESS and any person associated with those persons. However, the
Company need not disregard a vote if the vote is cast by a
person as proxy for a person who is entitled to vote, in
accordance with the directions on the proxy form or the vote is
1. Resolution 1 – Ratification of issue of cast by the person chairing the meeting as proxy for a person
who is entitled to vote, in accordance with a direction on the
Shares – Investec Subscription proxy form to vote as the proxy decides.
To consider and, if thought fit to pass the following
resolution as an ordinary resolution: OTHER BUSINESS
To deal with any other business which may be
“That, for the purposes of Listing Rule 7.4 and for all brought forward in accordance with the
other purposes, the Company approves and ratifies the Constitution and the Corporations Act.
allotment and issue of 19,148,408 Shares, of which
16,850,599 Shares were issued at an issue price of
For the purposes of this Notice of General Meeting,
GBP0.2921 each and 2,297,809 Shares were issued at an
the following definitions apply:
issue price of A$0.4370 each on or about 19 July 2012 to
Investec Bank Limited as more particularly described in
ASX means ASX Limited ABN 98 008 624 691 and,
the announcements dated 18 and 19 July 2012”
where the context permits, the Australian Securities
The Company will disregard any votes cast on Resolution 1 by Exchange operated by ASX Limited.
any person who participated in the issue the subject of
Resolution 1 and any person associated with those persons. A$ means the Australian dollar.
However, the Company need not disregard a vote if the vote is
cast by a person as proxy for a person who is entitled to vote, in
accordance with the directions on the proxy form or the vote is Board means the board of Directors of the
cast by the person chairing the meeting as proxy for a person
who is entitled to vote, in accordance with a direction on the
Company.
proxy form to vote as the proxy decides.
Company means Coal of Africa Limited ABN 98 008
2. Resolution 2 – Ratification of issue of 905 388.
Shares – Placement Tranche 1
Constitution means the Company's constitution, as
To consider and, if thought fit to pass the following amended from time to time.
resolution as an ordinary resolution:
Corporations Act means Corporations Act 2001 (Cth).
“That, for the purposes of Listing Rule 7.4 and for all
other purposes, the Company approves and ratifies the Director means a director of the Company from
allotment and issue of 80,570,166 Shares at an issue price time to time;
of GBP0.25 (3.25 Rand) each on or about 6 August 2012
to the parties as more particularly described in the Explanatory Memorandum means the explanatory
Explanatory Memorandum accompanying the Notice of memorandum accompanying this Notice.
Meeting”
GBP means Great Britain pounds.
The Company will disregard any votes cast on Resolution 2 by
any person who participated in the issue the subject of
Resolution 2 and any person associated with those persons. Listing Rules means the Listing Rules of the ASX.
However, the Company need not disregard a vote if the vote is
cast by a person as proxy for a person who is entitled to vote, in
accordance with the directions on the proxy form or the vote is Notice means this Notice of General Meeting.
cast by the person chairing the meeting as proxy for a person
who is entitled to vote, in accordance with a direction on the
proxy form to vote as the proxy decides.
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Resolution means a resolution contained in this
Notice.
Rand means the South African rand.
Shares means fully paid ordinary shares in the
capital of the Company.
By order of the Board
Shannon Coates
Company Secretary
Dated: 11 August 2012
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How to vote • Shareholders who return their proxy forms with a
Shareholders can vote by either: direction how to vote but do not nominate the
identity of their proxy will be taken to have
• attending the meeting and voting in person or by
appointed the Chairman of the meeting as their
attorney or, in the case of corporate shareholders,
proxy to vote on their behalf. If a proxy form is
by appointing a corporate representative to attend
returned but the nominated proxy does not attend
and vote; or
the meeting, the Chairman of the meeting will act
• appointing a proxy to attend and vote on their in place of the nominated proxy and vote in
behalf using the proxy form accompanying this accordance with any instructions. Proxy
Notice and by submitting their proxy appointment appointments in favour of the Chairman of the
and voting instructions in person, by post or by meeting, the secretary or any Director that do not
facsimile. contain a direction how to vote will be used where
possible to support each of the resolutions
Voting in person (or by attorney) proposed in this Notice, provided they are entitled
Shareholders, or their attorneys, who plan to attend the to cast votes as a proxy under the voting exclusion
meeting are asked to arrive at the venue 15 minutes rules which apply to some of the proposed
prior to the time designated for the meeting, if possible, resolutions. These rules are explained in this
so that their holding may be checked against the Notice.
Company's share register and attendance recorded. • To be effective, proxies must be lodged by
Attorneys should bring with them an original or 11.00am (London time) on 9 September 2012.
certified copy of the power of attorney under which Proxies lodged after this time will be invalid.
they have been authorised to attend and vote at the • Proxies may be lodged using any of the following
meeting. methods:
- by returning a completed proxy form in
Voting by a Corporation person or by delivery or post using the pre-
A shareholder that is a corporation may appoint an addressed envelope provided with this
individual to act as its representative and vote in Notice to:
person at the meeting. The appointment must comply Coal of Africa Limited
with the requirements of section 250D of the Level 1, 173 Mounts Bay Road
Corporations Act. The representative should bring to Perth WA 6000
the meeting evidence of his or her appointment,
including any authority under which it is signed.
- by faxing a completed proxy form to
+61 8 9322 6778.
Voting by proxy
• A shareholder entitled to attend and vote is
The proxy form must be signed by the shareholder
entitled to appoint not more than two proxies.
or the shareholder's attorney. Proxies given by
Each proxy will have the right to vote on a poll
corporations must be executed in accordance with
and also to speak at the meeting.
the Corporations Act. Where the appointment of a
• The appointment of the proxy may specify the proxy is signed by the appointer's attorney, a
proportion or the number of votes that the proxy certified copy of the power of attorney, or the
may exercise. Where more than one proxy is power itself, must be received by the Company at
appointed and the appointment does not specify the above address, or by facsimile, and by 11.00am
the proportion or number of the shareholder's (London time) on 9 September 2012. If facsimile
votes each proxy may exercise, the votes will be transmission is used, the power of attorney must
divided equally among the proxies (i.e. where be certified.
there are two proxies, each proxy may exercise
half of the votes).
Shareholders who are entitled to vote
• A proxy need not be a shareholder.
In accordance with Regulations 7.11.37 and 7.11.38 of
• The proxy can be either an individual or a body
the Corporations Regulations 2001, the Board has
corporate.
determined that a person's entitlement to vote at the
• If a proxy is not directed how to vote on an item of General Meeting will be the entitlement of that person
business, the proxy may generally vote, or abstain set out in the Register of Shareholders as at 5.00pm
from voting, as they think fit. (London time) on 9 September 2012. Changes in the
• Should any resolution, other than those specified register of shareholders after this time will be
in this Notice, be proposed at the meeting, a proxy disregarded in determining the rights of any person to
may vote on that resolution as they think fit. attend and vote at the meeting.
• If a proxy is instructed to abstain from voting on
an item of business, they are directed not to vote
on the shareholder's behalf either on a show of
hands or on the poll and the shares that are the
subject of the proxy appointment will not be
counted in calculating the required majority.
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Coal of Africa Limited
ABN 98 008 905 388
EXPLANATORY MEMORANDUM
This Explanatory Memorandum is intended to provide shareholders with sufficient information to assess the
merits of the Resolutions contained in the accompanying Notice of General Meeting of Coal of Africa Limited
("CoAL" or the "Company").
Certain abbreviations and other defined terms are used throughout this Explanatory Memorandum. Defined
terms are generally identifiable by the use of an upper case first letter. Details of the definitions and abbreviations
are set out in the Glossary to this Explanatory Memorandum.
BACKGROUND TO RESOLUTION 1
On 18 July 2012 the Company announced it is undertaking a private placement to raise approximately
US$8.7million through the issue of 19,148,408 new Shares, of which 16,850,599 Shares were to be issued at an
issue price of of GBP0.2921 per Share and 2,297,809 Shares were to be issued at an issue price of A$0.4370 per
Share to Investec Bank Limited ("Investec") (“Investec Subscription”).
BACKGROUND TO RESOLUTIONS 2 AND 3
On 6 August 2012 the Company announced it is undertaking a private placement to raise approximately US$44.8
million (£28.9 million/South African Rand 375.5 million) (less expenses) through the issue of 115,478,798 new
Shares at an issue price of GBP0.25 (equivalent of 3.25 Rand) each (“Placement”). The Placement is in two
tranches:
(a) tranche 1 – the issue of 80,570,166 Shares; and
(b) tranche 2 – subject to the receipt of Shareholder approval, the issue of up to 34,908,632 Shares.
The Company intends to use the net proceeds of the Placement, in addition to its existing cash balance of US$11.6
million to finance the following:
• For floatation, ultra fines and middlings plant and related design fees at the Vele Colliery –
approximately US$15 million;
• The final payment of the first tranche of $43 million for the Chapudi acquisition as announced on 10
May 2012 – approximately US$ 14 million
• Additional drilling, technical studies and related work to accelerate the Generaal, Voorburg and
Jutland definitive feasibility studies and project management, environmental impact assessment and
stakeholder engagement for the Greater Soutpansberg Project – approximately US$11 million;
• Pre-mining right capital expenditure including land purchases, regulatory, permitting and
construction of power lines, consultancy fees on detailed front-end engineering design as well as
technical drilling and analysis for thermal coal and fines test work at Makhado – approximately US$11
million; and
• General working capital – approximately US$3.2 million.
If Resolution 3 is not passed, the Company will need to find alternative ways to obtain funding for the continuing
development of its projects and to provide working capital for the Company.
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Investec and Deutsche Bank, AG are acting as joint managers and bookrunners in connection with the Placement.
Investec is also acting as the Johannesburg Stock Exchange Transaction Sponsor to CoAL and as the AIM
Nominated Adviser to CoAL
Resolution 2 relates to tranche 1 of the Placement and tranche 2 of the Placement is conditional on the passing of
Resolution 3.
RESOLUTION 1 – RATIFICATION OF ISSUE OF SHARES – INVESTEC SUBSCRIPTION
Listing Rule 7.4 permits the ratification of previous issues of securities made without prior shareholder approval,
provided the issue did not breach the 15% threshold set by Listing Rule 7.1. The effect of such ratification is to
restore a company's maximum discretionary power to issue further shares up to 15% of the issued capital of the
Company without requiring shareholder approval.
Pursuant to Resolution 1, the Directors are seeking ratification under Listing Rule 7.4 of the issue of 19,148,408
Shares that was made on or about 19 July 2012 in order to restore the right of the Company to issue further
securities within the 15% limit during the next 12 months.
The following information in relation to the Shares is provided to shareholders for the purposes of Listing Rule
7.5:
(a) 19,148,408 Shares were allotted and issued;
(b) 16,850,599 Shares were issued at an issue price of GBP0.2921 each and 2,297,809 shares were issued at an
issue price of A$0.4370 each;
(c) the Shares issued were fully paid ordinary shares in the capital of the Company and rank equally in all
respects with the existing fully paid ordinary shares on issue;
(d) the Shares were issued to sophisticated and institutional investors, none of whom related parties of the
Company for the purposes of section 228 of the Corporations Act; and
(e) funds raised from the issue will be used as set out in this Explanatory Memorandum.
RESOLUTION 2 – RATIFICATION OF ISSUE OF SHARES – PLACEMENT TRANCHE 1
Listing Rule 7.4 permits the ratification of previous issues of securities made without prior shareholder approval,
provided the issue did not breach the 15% threshold set by Listing Rule 7.1. The effect of such ratification is to
restore a company's maximum discretionary power to issue further shares up to 15% of the issued capital of the
Company without requiring shareholder approval.
Pursuant to Resolution 2, the Directors are seeking ratification under Listing Rule 7.4 of the issue of 80,570,166
Shares that was made on or about 6 August 2012 in order to restore the right of the Company to issue further
securities within the 15% limit during the next 12 months.
The following information in relation to the Shares is provided to shareholders for the purposes of Listing Rule
7.5:
(a) 80,570,166 Shares were allotted and issued at an issue price of GBP0.25 (equivalent of 3.25 Rand) each;
(b) the Shares issued were fully paid ordinary shares in the capital of the Company and rank equally in all
respects with the existing fully paid ordinary shares on issue;
(c) the Shares were issued to sophisticated and institutional investors, none of whom related parties of the
Company for the purposes of section 228 of the Corporations Act; and
(d) funds raised from the issue will be used as set out in this Explanatory Memorandum.
RESOLUTION 3 – PROPOSED ISSUE OF SHARES – PLACEMENT TRANCHE 2
Resolution 3 seeks shareholder approval to the issue of a maximum of 34,908,632 Shares at an issue price of
GBP0.25 (equivalent of 3.25 Rand) each.
Listing Rule 7.1 requires shareholder approval for the proposed issue of securities in the Company. Listing Rule
7.1 broadly provides, subject to certain exceptions, that a listed company must not, without prior approval of its
shareholders, issue securities if the number of securities issued, or when aggregated with the number of securities
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issued by the company during the previous 12 months, exceed 15% of the number of securities on issue at the
commencement of that 12 month period.
The following information in relation to the Shares to be issued is provided to shareholders for the purposes of
Listing Rule 7.3:
(a) the maximum number of Shares the Company can issue is 34,908,632;
(b) the Company will allot and issue the Shares no later than 3 months after the date of the Meeting, unless
otherwise extended by way of ASX granting a waiver to the Listing Rules;
(c) the shares will be allotted on one date;
(d) the Shares will be issued at GBP0.25 (equivalent of 3.25 Rand) each;
(e) the Shares will be issued and allotted to applicants to be determined by Investec, Deutsche Bank AG and
the Company. The allottees will be clients of Investec or Deutsche Bank AG. None of the allottees will be
related parties of the Company for the purposes of section 228 of the Corporations Act;
(f) upon issue, the Shares will be fully paid ordinary shares in the capital of the Company and rank equally in
all respects with the existing fully paid ordinary shares on issue; and
(g) the purpose of the issue will be used as set out in this Explanatory Memorandum.
GLOSSARY
ASX means ASX Limited ABN 98 008 624 691 and, where the context permits, the Australian Securities Exchange
operated by ASX Limited.
A$ means the Australian dollar
Board means the board of Directors of the Company.
Company means Coal of Africa Limited ABN 98 008 905 388.
Constitution means the constitution of the Company, as amended from time to time.
Corporations Act means the Corporations Act 2001 (Cth).
Director means a director of the Company.
Listing Rules means the Listing Rules of the ASX.
Meeting means the General Meeting the subject of the Notice.
Notice means the notice of General Meeting which accompanies this Explanatory Memorandum.
Rand means the South African rand.
Resolution means a resolution proposed pursuant to the Notice.
Shares means fully paid ordinary shares in the capital of the Company.
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