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FSE - Firestone Energy Limited - Coal Off-take agreement - Detailed
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")
Coal Off-take Agreement - Detailed
Secured Eskom Supply Contract
Further to the announcement made on the 2nd February 2011, the Firestone Energy
Limited/Sekoko Joint Venture is pleased to provide the following detail
regarding a legally binding Memorandum of Understanding "MOU", signed between
Sekoko Coal (Pty) Ltd and the State owned power utility, Eskom Limited, on the
28th January 2011.
The agreement specifies the supply of contract coal product from the farms in
the FSE/Sekoko Waterberg Coal Project to the nearby Eskom owned Coal power
station, Matimba, within the same Limpopo region of South Africa.
HIGHLIGHTS
The first contract supply schedule is as follows:
Contract Coal Supply Schedule
At an assumed Calorific Value "CV" of 20 MJ/kg (As Received)
YearPeriod Minimum Annual Off-Take
(tonnes)
1 April 2012 - 31 March 525,000
2015
1 April 2015 - 31 March 1,000,000
2018
Sekoko and Eskom continue to negotiate, in good faith, the objective of entering
into a longer term contract extension from 2018 to 2032 (15 years).
Long Term Coal Supply Schedule
Indicative quantities, at an assumed CV of 20 MJ/kg (As Received):
Year Indicative Annual Off-Take (tonnes)
1 April 2018 - 31 March 1,000,000
2019
1 April 2019 - 31 March 2,000,000
2020
1 April 2020 - 31 March 2,300,000
2032
Note: This totals a minimum of 35.175 million tonnes over 21 years and does not
include any of the better quality and higher CV prime coal product.
When such an agreement on the extension is concluded, this agreement will embody
the provisions of this MOU (the `Coal Supply and Off-Take Agreement`).
The Chairman of Firestone, Mr David Perkins, said, "This is wonderful news for
the companies involved and such a significant milestone lays the foundation to
assist in procuring finance and funding for the commencement of mining on the
Smitspan farm in the Waterberg coal region".
Note:
a) The Smitspan open pit was the basis of the DFS announced to the market in
August 2010. This farm is one of eight farms in the JV and has a measured and
indicated resource of 714million Coal Gross Tonnes In Situ (taken from 1st of
August 2010 Venmyn report);
b) Matimba power station is 20km from the big Smitspan open pit;
c) The Smitspan open pit is also only 8km away from the large Exxaro Coal open
pit operations which also has the largest washing and beneficiation plant in the
world and has been in operation since 1984.
David J Perkins
Chairman
www.firestoneenergy.com.au
Competent Persons Statement
Information in this announcement that relates to exploration results, coal
resources or reserves on the properties Smitspan 306LQ, Hooikraal 315LQ,
Minnasvlakte 258LQ, Massenburg 305LQ, Swanepoelpan 262LQ and Duikerfontein 263LQ
is based on information compiled by Ms Catherine Telfer who is employed by
Venmyn Rand (Pty) Ltd and is a member of The Australasian Institute of Mining
and Metallurgy and the Geological Society of South Africa. Ms Telfer has
sufficient experience which is relevant to the style of mineralisation and type
of deposit under consideration and to the activity which she is undertaking to
qualify as a Competent Person as defined in the 2004 Edition of the
"Australasian Code for the Reporting of Exploration Results, Mineral Resources
and Ore Reserves" (The JORC Code). Ms Telfer consents to the inclusion in the
announcement of the matters based on her information in the form and context in
which it appears
About Firestone Energy
Firestone Energy is an independent Australian exploration company focused on
developing coal projects in South Africa. The company is currently exploring the
richly endowed Waterberg coal field in the Limpopo Province of South Africa.
The Company is committed to value-added growth through becoming an independent
coal and energy producer at its projects in South Africa.
The Company has entered into three joint ventures with Sekoko Resources, a South
African black empowerment company (BEE) and Sekoko has two directors on the
Board of Firestone Energy.
Corporate Details
ASX: FSE
JSE: FSE
Issued Capital:
2,427 million ordinary shares
Major Shareholders:
Sekoko Resources (Pty) Ltd
Colbern Fiduciary Nominees Ltd
Bell Potter Nominees Ltd
Directors and Officers:
Non Executive Directors:
David Perkins (Chairman)
Dr Pius Kasolo
Colin McIntyre
Sizwe Nkosi
Peter Tshisevhe
Company Secretary
Jerry Monzu
Contact:
Suite B9, 431 Roberts Road
Subiaco, Western Australia 6008
Tel: +61 (0) 8 9287 4600
Web: www.firestoneenergy.com.au
Enquiries:
Firestone Energy Limited
+61 8 9287 4600.
David J Perkins
Chairman
Jerry Monzu
Company Secretary
Johannesburg
3 February 2011
Sponsor and Corporate Advisor
River Group
Date: 03/02/2011 07:49:01 Supplied by www.sharenet.co.za
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