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FSE - Firestone Energy Limited - Quarterly Activities Report for the Period

Release Date: 30/04/2012 09:15
Code(s): FSE
Wrap Text

FSE - Firestone Energy Limited - Quarterly Activities Report for the Period to 31 March 2012 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") Quarterly Activities Report for the Period to 31 March 2012 The Board of Firestone Energy Limited (ASX/JSE: FSE) ("Firestone" or the "Company") is pleased to provide shareholders with its Quarterly Activities Report for the 3 month period ended 31 March 2012. Highlights * Sekoko Coal signs an MoU for a coal supply agreement with Eskom Holdings Limited; * AUD $2.2M Finance Facility negotiated; and * Technical and environmental work on track. Overview Firestone`s South African Black-owned partner, Sekoko Coal (Pty) Ltd, 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 Eskom power stations in the Mpumalanga Province. Both parties have agreed that, upon compliance 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 / 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 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 (5) years to 10mt/pa. On the 7 March 2012, the Company received an offer from the Tata Power Compnay Limited to invest in the Firestone and Sekoko joint venture, valuing 100% of the JV`s Waterberg Coal Project at approximately AUD $130 million. Following consideration of the offer, the Board of Firestone decided to reject the offer on the basis that it materially undervalues the inherent value that has been built up in the project to date. Finance Facility In March the Company secured a AUD$2.2M short term finance facility to provide working capital to the Company for general corporate purposes. In addition, the Company is considering further funding initiatives to finance it`s share of the Joint-Venture expenses in relation to completing a Definitive Feasibility Study as required in the terms and conditions of the Eskom MoU. Corporate In January 2012, Mr Colin McIntyre, resigned from Firestone as independent Non-Executive Director. To date the Company has not replaced this position. Outlook The management of the joint venture continue to work closely and are focused on unlocking the value in the Waterberg Joint Venture Project. The Company is increasingly being recognised in the marketplace and within the industry on its activities and achievements. FOR FURTHER INFORMATION: David Knox CEO 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. 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 Ltd Bell Potter Nominees Ltd Directors and Officers Non Executive Directors: Tim Tebeila (Chairman) David Perkins (Deputy Chairman) Dr Pius Kasolo Mr Ben Mphahlele Mr Kobus Terblanche Officers: Mr David Knox CEO Mr Jerry Monzu Company Secretary Contact: Suite B9, 431 Roberts Road Subiaco, Western Australia 6008 Tel: +61 (0)8 9287 4600 Web: www.firestoneenergy.com.au 30 April 2012 Pretoria Sponsor River Group Date: 30/04/2012 09:15:17 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. 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