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FSE - Firestone Energy Limited - Amended announcement regarding Firestone

Release Date: 03/04/2012 11:29
Code(s): FSE
Wrap Text

FSE - Firestone Energy Limited - Amended announcement regarding Firestone Energy`s memorandum of understanding for a 10 MTPA, minimum 30 year thermal coal supply agreement 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") AMENDED ANNOUNCEMENT REGARDING FIRESTONE ENERGY`S MEMORANDUM OF UNDERSTANDING FOR A 10 MTPA, MINIMUM 30 YEAR THERMAL COAL SUPPLY AGREEMENT Firestone Energy Limited (ASX/JSE: "FSE") ("Firestone" or the "Company") is pleased to announce that its 60:40 Joint Venture with Sekoko Coal (Pty) Ltd, its South African Black-owned partner, has signed a Memorandum of Understanding for a Coal Supply Agreement with Africa`s largest power utility, Eskom Holdings Limited, to supply thermal coal from its Waterberg Coal Project in the Lephalale area, Limpopo, to two Eskom power stations in the Mpumalanga Province. The key aspects of this Memorandum of Understanding, are that both parties have agreed that consequent upon compliance / achievement of the terms and conditions set out in the MOU, the parties will enter into a Coal Supply Agreement containing enabling provisions for the Firestone Energy/Sekoko Joint Venture to supply a minimum of 10Mt of thermal coal on a Free on Rail (FOR) basis annually to Eskom`s two designated power stations in the Mpumalanga area by way of production, acquisition or joint venture, for a minimum period of thirty (30) years. The production of coal will commence in 2014 and will ramp up over a period of five years to 10mtpa. As foreshadowed in the Company`s Quarterly Report released on 31 January 2012 and in Firestone`s Activity Report released on 1 March 2012, this MOU replaces the earlier MOU with Eskom which was announced to the market on 2 February 2011. That earlier MOU was for and initial term of 6 years commencing at 525,000 tpa with the opportunity to extend for an additional 15 years. The Waterberg Coal Project comprises eight farms in the Waterberg coalfield totalling some 7,979 hectares with a proven JORC resource of 1.8 billion tonnes. The Project entails the construction of an opencast coal mine on the Smitspan farm together with infrastructure linking the mine to the Transnet rail system which is approximately 7 km from the proposed mine site. Firestone Energy`s non-executive Chairman, Mr Timothy Tebeila said, "We are delighted to have secured this agreement, which we regard as a key step toward achieving Firestone Energy/Sekoko`s objectives of developing its coal assets in South Africa and participating in the social and economic development of South Africa." For further information please contact: David Perkins Jan Britz Deputy Chairman CEO Firestone Energy Limited Sekoko Coal Pty Ltd +61 2 926 0131 +27 11 706 3542 Timothy Tebeila Chairman FIRESTONE ENERGY LIMITED www.firestoneenergy.com.au About Firestone Energy Firestone Energy Limited is an independent, Australian exploration and development company listed on the Australian Stock Exchange Ltd (ASX) and the Johannesburg Stock Exchange (JSE). Firestone Energy has entered into a Joint Venture with Sekoko Resources (Pty) Ltd through which Firestone Energy has acquired the right to 60% participation interests in the Waterberg Coal Project located in Lephalale area, Limpopo Province, South Africa. The first stage of the project is to develop the Smitspan mine which has a substantial measured thermal coal resource and to develop the Vetleegte mine which is a substantial metallurgical coal deposit. Firestone Energy is committed to becoming a profitable independent coal and energy producer at its projects in South Africa, thereby making a substantial contribution to the social and economic development of the Lephalale area and South Africa. Corporate Details ASX: FSE JSE: FSE Issued Capital: 3,114 million ordinary shares Major Shareholders: Sekoko Resources (Pty) Ltd Linc Energy Ltd BBY Nominees Pty Ltd Bell Potter Nominees Ltd Directors and Officers Non Executive Directors: Mr Tim Tebeila (Chairman) David Perkins (Deputy Chairman) Dr Pius Kasolo Ben Mphahlele Kobus Terblanche Officers: Mr David Knox CEO Mr Jerry Monzu Company Secretary Contact: Suite B9, 431 Roberts Road Subiaco, Western Australia 6008 Tel: +61 (08) 9287 4600 Web: www.firestoneenergy.com.au About Sekoko Resources Sekoko Resources (Pty) Ltd is a South African-based black-owned energy and minerals company developing the coal, magnetite iron ore and PGMs Projects in the Limpopo Province of South Africa. This includes a significant exploration program and development of the Waterberg Coal Joint Venture Project based on significant Coal Zone Resources. August 2010 Venmyn Rand Report Zone Measured Indicated Inferred Total Farm Tonnage GTIS Coal GTIS Coal GTIS Coal GTIS Coal "1" Tonnage Tonnage "2" (mill (mill (mill (mill tonnes) tonnes) (mill tonnes) tonnes) tonnes)
Smitspan 1,881.758 238.668 475.844 - 714.512 Hooikraal 358.444 - 7.282 155.491 162.773 Minnasvlakte 755.805 - 26.507 230.687 257.194 Massenburg 337.034 - 20.797 109.539 130.336 Vetleegte 570.265 1.224 204.499 17.893 223.616 Swanepoelpan 1,239.974 - 1.072 378.227 379.299 Duikerfontein 30.200 - - 13.949 13.949 Total 5,173.480 239.892 736.001 905.786 1,881.679 "1`` Waterberg coal typically occurs interlaminated with shale which for the most part cannot be mined separately from the coal and thus the zone gross in-situ tonnage is the tonnage of coal and shale. "2" In the interest of balanced reporting it is the Company`s intention to also report the gross in-situ tonnage of coal rather than the tonnage of coal and shale. In order to identify the gross in-situ tonnage of coal in each zone, rather than the zone tonnage including the rock, each zone tonnage was discounted by the percent yield at a relative density of 1.9, in effect, removing the influence of the shale) to derive an estimate of the coal tonnage. 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, Vetleegte 304LQ, 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. 3 April 2012 Pretoria Sponsor River Group Date: 03/04/2012 11:29:01 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.

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