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OPT - Optimum Coal Holdings Limited - Acquisition of prospecting rights Optimum Coal Holdings Limited (Incorporated in the Republic of South Africa) (Registration number 2006/007799/06) JSE code: OPT ISIN: ZAE000144663 ("Optimum Coal" or the "Company") OPTIMUM COAL - ACQUISITION OF PROSPECTING RIGHTS Optimum Coal, a leading South African coal mining and exploration group, listed on the JSE Limited, wishes to inform shareholders and update the market about its acquisition of two prospecting rights in close proximity to Koornfontein Mines. Optimum Coal has concluded an agreement 21 April 2011 with Umcebo Mining (Pty) Ltd to acquire two prospecting rights ("the TNC Prospecting Rights") for a cash consideration of R420 million ("the transaction"). This agreement is subject only to regulatory consents from the Department of Mineral Resources for the renewal and transfer of ownership of the TNC Prospecting Rights to Optimum Coal. The effective date of the transaction will be upon the fulfilment of these conditions precedent (expected to occur no later than 15 November 2011). The TNC Prospecting Rights are located approximately 10km from Koornfontein Mines and have an in-situ coal resource of some 120 million tons of thermal coal, of which the Company believes over 35 million tons are extractable as run-of-mine tonnage. In order to maximise the value of the resource, the Company plans to construct an overland conveyor from the TNC Prospecting Rights area to Koornfontein Mines, utilising Koornfontein`s processing plants to wash the coal and its rapid load-out infrastructure to load trains efficiently. The TNC Prospecting Rights area will likely be mined by opencast methods, and is expected to be developed for first coal in FY2015. Koornfontein Mines` current high value export life of mine from the Gloria 2 seam is some 4,5 years, and the development of the TNC Prospecting Rights resource will enable Koornfontein to continue to produce high value saleable export coal for an additional period of 12 years at the current 1,5 million ton per annum rate. Additionally, over and above the export product, this resource is expected to yield some 500 000 tons per annum of thermal coal within Eskom quality specifications. The purchase consideration is to be funded from Optimum Coal`s cash reserves. The transaction will result in no change to the net asset value of the Company, as Optimum Coal is acquiring mineral right assets for an equivalent cash consideration and further no change in the earnings or headline earnings per share. CEO Mike Teke said "We have targeted these reserves for some time and are delighted to have entered into this transaction. The TNC Prospecting Rights will provide us with a critical, high value export life extension at Koornfontein Mines, thereby unlocking the currently underutilised infrastructure and maximising value for the 1,5 million tons per annum RBCT entitlement owned by Koornfontein Mines. Additionally, we now have more flexibility to explore options to potentially provide the lower quality 4 seam coal at Koornfontein Mines to Eskom and we will continue to work on developing these opportunities." Johannesburg 4 May 2011 For further enquiries please contact: Optimum Coal Tel: +27 (0)11 325 0403 College Hill Jacques de Bie Sharon Steyn Tel: +27 (0)11 447 3030 Sponsor RAND MERCHANT BANK (A division of FirstRand Bank Limited) Date: 04/05/2011 10:16:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.
