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FIRESTONE ENERGY LIMITED - Financial Restructure Update

Release Date: 18/12/2012 08:35
Code(s): FSE     PDF:  
Wrap Text
Financial Restructure Update

 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")                                                             About Firestone Energy

                                                                                     Firestone Energy Limited is an
                                                                                     independent, Australian exploration and
                                                                                     development company listed on the
18 December 2012
                                                                                     Australian Stock Exchange Ltd (ASX) and
                                                                                     the Johannesburg Stock Exchange (JSE).
                                                                                     Firestone Energy has entered into a Joint

         Financial Restructure – revised                                             Venture with Sekoko Resources (Pty) Ltd
                                                                                     through which Firestone Energy has

             Investment Agreement                                                    acquired the right to 60% participation
                                                                                     interests in the Waterberg Coal Project
                                                                                     located in Lephalale area, Limpopo Province,
                                                                                     South Africa.
The Board of Firestone Energy Limited (ASX/JSE: FSE) (the “Company” or
                                                                                     The first stage of the project is to develop the
“Firestone”) is pleased to update shareholders with the progress of the financial
                                                                                     Smitspan mine which has a substantial
restructuring and the Investment Agreement that it has executed with Ariona
                                                                                     measured thermal coal resource and to
Company SA (“Ariona”).                                                               develop the Vetleegte mine which is a
                                                                                     substantial metallurgical coal deposit.
As previously announced to the market on 19 November 2012, Firestone entered
into a termsheet to effect a variation to the Investment Agreement to reflect        Firestone Energy is committed to becoming a
changed settlement terms. The changes agreed in the termsheet were subject to        profitable independent coal and energy
a number of conditions the principal ones being:                                     producer at its projects in South Africa,
                                                                                     thereby making a substantial contribution to
                                                                                     the social and economic development of the
   •   a review to ensure that it is compliant with the shareholder approvals
                                                                                     Lephalale area and South Africa.
       received at a General Meeting of the Firestone held on 5 October 2012;
       and                                                                           Corporate Details
   •   execution of a formal deed of variation.                                                                           ASX: FSE
                                                                                                                          JSE: FSE

The Directors are pleased to announce that the above conditions have now been                                        Issued Capital:
                                                                                                      3,114 million ordinary shares
satisfied with a formal deed of variation having been executed by the parties.
                                                                                                              Major Shareholders:
During the course of preparation of the formal deed of variation, further changes                      Sekoko Resources (Pty) Ltd
                                                                                                                   Linc Energy Ltd
to those referred to in the Company's announcement of 19 November 2012 were                                BBY Nominees Pty Ltd
made to the Investment Agreement, which can be summarised as follows;                                    Bell Potter Nominees Ltd

                                                                                                           Directors and Officers
    • First Stage of settlement is now to occur on 21 December 2012 provided
      that if Ariona is unable to provide the A$4 million of additional cash on                        Non Executive Directors:
                                                                                                       Mr Tim Tebeila (Chairman)
      that day then First Stage will be postponed until at the latest 31 January                 David Perkins (Deputy Chairman)
      2013. If the First Stage settlement does not occur by 5 January 2013 then                                    Dr Pius Kasolo
      Ariona is to lend Firestone a further $600,000 of interim funding.                                          Ben Mphahlele
                                                                                                                Kobus Terblanche

    • The additional $600,000 in interim funding is part of the total $39.645                                         Officers:
                                                                                                            Mr David Knox CEO
      million in funding to be provided by Ariona. If settlement does not occur                         Ms Amanda Matthee CFO
      then the $600,000 will be dealt with in the same way as the $1 million                  Mr Jerry Monzu Company Secretary
      working capital facility currently made available by Ariona, further details
      of which are set out below.                                                                                        Contact:
                                                                                                     Suite B9, 431 Roberts Road
    • Second Stage settlement is to occur within 5 business days of First Stage                 Subiaco, Western Australia 6008
                                                                                                         Tel: +61 (08) 9287 4600
      settlement but in any event by no later than 28 February 2013.                           Web: www.firestoneenergy.com.au
         

The $1 million working capital facility provided by Ariona is a loan to Firestone on an interest free and
unsecured basis until the First Stage settlement occurs. In the event that the First Stage settlement
does not occur then the amount of working capital loaned will convert into equity at the prevailing
market price on the date of conversion. Upon completion of the First Stage settlement process the full
amount of working capital that has been drawn down will roll into the new Convertible Notes.

The postponement of First Stage and or Second Stage settlement until after 5 January 2013 is subject
to the ASX granting a modification to a waiver of Listing Rule 7.3.2, previously granted to the Company
to allow for the issue of Convertible Notes after 5 January 2013.

Either party can terminate the Investment Agreement if First Stage settlement does not occur by 31
January 2013 or Second Stage settlement by 28 February 2013.


Yours sincerely,



David Knox
Chief Executive Officer
www.firestoneenergy.com.au
Tel:      Australia (+61 08 9287 4600)
          South Africa (+27 11 706 3548)


JOHANNESBURG
18 DECEMBER 2012

SPONSOR

RIVER GROUP

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