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OPT - Optimum Coal Holdings Limited - Operational update for the financial year
ended 30 June 2011
Optimum Coal Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number: 2006/007799/06)
JSE share code: OPT
ISIN: ZAE000144663
("Optimum Coal" or "the Company" or the Group")
OPERATIONAL UPDATE FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011
Optimum Coal, a leading South African coal mining and exploration group listed
on the JSE Limited ("JSE"), wishes to inform shareholders and update the market
on its operational performance at Optimum Collieries and Koornfontein Mines for
the year ended 30 June 2011. Optimum Coal owns 100% of Optimum Collieries and
Koornfontein Mines respectively.
Optimum Coal produced 17.1 million tons of run-of-mine ("ROM") coal during
FY2011, an increase of 21% on the 14.1 million tons produced in FY2010 ("the
comparable period"). Of this, 6.8 million tons of export/high quality domestic
coal was produced, 28% up on 5.3 million tons produced in the comparable period.
Additionally, 6.8 million tons of Eskom quality coal was produced, 24% up on 5.5
million tons produced in the comparable period. The comparable period production
numbers include production from Koornfontein Mines from 1 March 2010, the date
on which Optimum Coal took control of Koornfontein Mines. For information
purposes, Koornfontein Mines produced 1.0 million tons of ROM coal, 0.6 million
tons of export/high quality domestic coal and 0.4 million tons of Eskom quality
coal during the comparable period.
Table 1 - Salient Production Features at Optimum Collieries and Koornfontein
Mines for the year ended 30 June 2011.
Optimum Koornfontein Total
Units Collieries Mines
ROM production t`000 13,966 3,129 17,095
Export/high quality domestic t`000 4,904 1,872 6,776
saleable
Eskom/lower quality domestic t`000 5,490 1,303 6,793
saleable
Chief Executive Officer Mike Teke said "We are pleased with our operating
results for the FY11 financial year. Our overall safety performance has been
commendable and we continue to focus on achieving zero harm targets.
However, we have not achieved our run-of mine production targets at Optimum
Collieries during the year. The departure of Henry White, the former chief
operating officer of Optimum Coal, has resulted in a restructuring of the
Optimum Collieries` management team and a renewed focus on the effectiveness of
coal exposure and extraction methodologies applied on mine as well as overall
yield achieved."
Production at the Boschmanspoort underground section has normalised after
experiencing various challenging conditions during the first half of the year.
The critical Kwagga North extension project is on track, on time and within
budget to ensure increased run-of-mine tonnages. We are already `coaling` from
the Kwagga North extension section and expect to move first coal across our
overland transport infrastructure early in the 2012 calendar year. Additionally,
work on the Pullenshope underground section as well as Schoonoord brown-field
project is being expedited as we foresee additional near term opportunities in
these coal blocks.
Coal production at Koornfontein Mines has exceeded our expectations and we are
delighted with its performance during the year. We expect to mine the Gloria 2
seam at current run rates until circa 2015, where after the development of the
12 year life-of-mine TNC reserve (which was acquired during the year), will
ensure that Koornfontein Mines returns to being a long life, high export
quality coal operation.
At 30 June 2011, there was 503 kt of export stock at our operations available
for railing to RBCT. In line with the rest of the export coal industry, we were
affected by the 20 day TFR rail maintenance shutdown in June 2011, and have
consequently built up substantial on-mine export stock. TFR railings have now
normalised and our on-mine export stocks are reducing. With TFR`s expansion
program approved and underway, and with increased TFR rail rates now
implemented, an improvement in TFR`s railings performance is expected in the
coming year.
Our production at operations has recently been affected by the current protected
strike action in the coal mining industry, which commenced Sunday evening, 24
July 2011. Together with the Chamber of Mines, we are in the process of
resolving this strike and normal production will resume upon the settlement of
the current dispute.
28 July 2011
Johannesburg
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Financial Communications Advisers
COLLEGE HILL
Date: 28/07/2011 15:53:07 Supplied by www.sharenet.co.za
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