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FIRESTONE ENERGY LIMITED - Firestone Energy Limited Half Year Financial Report 31 December 2013

Release Date: 14/03/2014 15:22
Code(s): FSE FSEO1     PDF:  
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Firestone Energy Limited Half Year Financial Report 31 December 2013

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")

Half-Year Financial Report
31 December 2013

CORPORATE DIRECTORY

DIRECTORS

Mr Stephen Miller
Executive Director

Mr Brian McMaster
Non-Executive Director

Mr George Magashula
Non-Executive Director

COMPANY SECRETARY

Jonathan Hart

REGISTERED OFFICE

Level 1, 330 Churchill Avenue
SUBIACO WA 6008

Telephone: (08) 9200 4465
Facsimile: (08) 9200 4469

SHARE REGISTRY

Computershare Investor Services
Level 2, Reserve Bank Building
45 St Georges Terrace
PERTH WA, 6000
Ph 08 9323 2000
Fax 08 9323 2033

AUDITORS

BDO Audit (WA) Pty Ltd
38 Station Street
SUBIACO WA 6008

STOCK EXCHANGE LISTING

Securities of Firestone Energy Limited are dual
listed on the Australian Stock Exchange and the
Johannesburg Stock Exchange.

ASX & JSE CODE

FSE

DIRECTORS' REPORT

Your directors present their financial report on the group (referred to hereafter as "the Group") consisting of
Firestone Energy Limited ("Firestone" or "the Company") and the entities it controlled at the end of, or during
the period to the half-year ended 31 December 2013.

Directors

The names of the Directors of Firestone Energy Limited throughout the reporting period and at the date of this
report are as follows. Directors were in office for the entire period unless otherwise stated.

Stephen Miller
Executive Director

Brian McMaster
Non-Executive Director

George Magashula (appointed 13 November 2013)
Non-Executive Director

Timothy Tebeila (resigned 1 November 2013)
Non-Executive Chairman

Pius Kasolo (removed 29 November 2013)
Non-Executive Director

Benjamin Mphahlele (removed 29 November 2013)
Non-Executive Director

David Knox (removed 29 November 2013)
Non-Executive Director

Results of Operations

The net loss from continuing operations for the six months to 31 December 2013 was $2,458,155 (half-year
ended 31 December 2012: $2,884,760).

Review of Operations

Operational overview for the six month period ending 31 Dec 2013

During the period, the Group, a party to the Waterberg Coal Project Joint Venture, continued to progress
matters relating to the proposed development of an opencast mining operation to produce 10 million tonnes
per annum of coal (product) to Eskom, the South African parastatal power utility.

The material matters attended to during the period include as follows:
                              
Updated Resource Statement 1,2
An updated Independent Competent Persons Resource Statement was released to the market on 24 October
2013 reflecting the increased borehole database following the completion of the 2013 drilling programme on
the four farms covered by the Mining Right (Smitspan, Massenberg, Hooikraal and Minnasvlakte), and the two
farms held under Prospecting Rights (Vetleegte and Swanepelpan).

The resource statement for the Waterberg Coal Project now stands at 3.88 billion tonnes of coal with coal in
the measured category of 2.07 billion tonnes (Table 1). This represents a substantial increase in the coal
resource for the Waterberg Coal Project. Previously, SRK Consulting (December 2012) declared a Coal
Resource of 1.183 billion tonnes on the two farms Smitspan and Massenberg, of which 1.004 billion tonnes
was in the Measured category. The Resource Statement was prepared on behalf of the Waterberg Coal Joint
Venture Parties (WCJVP) by Gemecs (Pty) Limited in their capacity as Independent Competent Persons. For

more detailed information on the Independent Competent Persons Resource Statement please refer to the
ASX announcement dated 24 October 2013.

Table 1 – Coal Resource on all six Waterberg Coal Project Properties under both Prospecting Permit and
Mining Right
                              Coal                                    
                      Resource (1)        Ash                       Vol %      CV (Mj/kg)         TS %
                              
Resource Classification       (Mt)      % (ad)       IM % (ad)        (ad)           (ad)         (ad)
                              

       Measured            2,070.3       57.9             2.2        17.6          10.51          0.96
       Indicated            8,56.3       59.4             2.3        17.2           9.96          1.00
        Inferred             956.7       58.9             2.2        17.5          10.26          1.03
   Total Resources         3,883.3       58.5             2.2        17.5          10.33          0.99

Coal Resource (1) based on minimum thickness cut-off of 0.5m

Interaction with Lenders
WCJVP mandated The Standard Bank of South Africa Limited (SBSA), to arrange project finance for The
Waterberg Coal Project. Pursuant to this mandate, SBSA has now appointed Independent Technical
Consultants to review all technical matters on behalf of the project financiers.

Water Use License (IWULA)
The Environmental work for the IWULA submission was completed during the period.

Stakeholder engagement
Generally, throughout the period, regular and productive engagement by the Project technical team with
project strategic stakeholders was ongoing. These discussions included, inter-alia, Eskom, the Department of
Water Affairs, and Transnet Freight Rail for the timely delivery of services to the project.

Corporate Activities

On 24 September 2013, Firestone advised the market that it had entered into a loan agreement with The
Waterberg Coal Company Limited (WCC) whereby WCC would advance up to A$3 million to be used for
FSE's project finance obligations in relation to The Waterberg Coal Project. The loan is unsecured and non-
interest bearing.

On 10 October 2013, the Company received notification from WCC that its off-market takeover bid for all the
ordinary shares in Firestone had closed. At the conclusion of the offer, WCC's shareholding in FSE was
45.88%.

On 13 November 2013, Firestone announced that Mr Tim Tebeila resigned from the position of Chairman and
Non-Executive Director of Firestone. Firestone also advised the market on this date that Mr George Oupa
Magashula has been appointed to the position of Non-Executive Director of Firestone.

On 29 November 2013, Mr Ben Mphalee, Mr Pius Kasolo and Mr David Knox were not re-elected at the
Company's annual general meeting.

In December 2013, the short term loan from BBY Limited amounting to $250,000 was repaid.

Significant Events After Balance Date

Refer to Note 10 in the attached financial statements.

Auditor's Independence Declaration

A copy of the auditor's independence declaration as required under Section 307C of the Corporations Act is
set out on page 17 and forms part of this report.

This report is made in accordance with a resolution of directors.

Dated at Perth this 14th day of March 2014.

Signed in accordance with a resolution of the Directors.

Stephen Miller
Executive Director

Note: 1 Please note that this information was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the
JORC Code 2013 on the basis that the information has not materially changed since it was last reported.

Note 2: Competent Person Statement

Gemecs (Pty) Limited was commissioned by the Waterberg Coal Project Joint Venture Partners, to undertake an Updated Independent Persons Geological
Report for the Sekoko Waterberg Coal Project.

The Coal Resources were estimated in accordance with the South African code for the Reporting of Exploration Results, Mineral Resources and Mineral
Reserves ("SAMREC Code"), Australasian Code for Reporting of Exploration Results. Mineral Resources and Ore Reserves ("the JORC Code") and South
African National Standard (SANS 10320:2004) guidelines.

The information in this announcement that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr
Coenraad D van Niekerk, Pr.Sci.Nat (Reg. No 400066/98), M.Sc Hons (Geology), MDP, an employee of Gemecs (Pty) Limited, who is a Fellow of the
Geological Society of South Africa. Mr Niekerk is a mining geologist with 38 years' experience in the mining industry, sufficient experience relevant to the
style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the
2004 Edition of the Joint Ore Reserves Committee (JORC) "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves".
Mr Niekerk consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
For the Half-Year Ended 31 December 2013

                                                               Note       December         December
                                                                              2013             2012
                                                                                 $                $
Continuing operations
Interest revenue                                                               972              766
Other income                                                               247,393           11,773
Occupancy costs                                                              (668)         (13,800)
Legal and professional fees                                               (89,685)        (266,763)
Administration costs                                                     (328,784)        (562,299)
Travel and accommodation                                                  (14,197)         (46,025)
Directors' fees                                                          (158,053)        (130,000)
Employee & consultant costs                                                      -         (56,216)
Listing and share registry costs                                          (84,689)         (96,746)
Share-based payments                                                             -        (189,850)
Finance costs                                                    2     (2,030,444)      (1,535,600)
Loss before income tax                                                 (2,458,155)      (2,884,760)

Income tax expense                                                               -                -
Loss from continuing operations                                        (2,458,155)      (2,884,760)

Loss for the half-year attributable to the members of
Firestone Energy Limited                                               (2,458,155)      (2,884,760)

Other comprehensive income for the half-year
Items that may be subsequently reclassified to profit or loss
Foreign currency translation reserve movements                         (1,923,596)      (3,125,467)

Total comprehensive income / (loss) for the half-year
attributable to the members of Firestone Energy Limited                (4,381,751)      (6,010,227)

Loss per share
Loss per share on loss from continuing operations attributable to
the ordinary equity holders of the company
Basic loss per share (cents per share)                                     (0.07)            (0.09)

For JSE requirements, the Headline Earnings per Share ("HEPS") has been calculated to be the
equivalent of the basic loss per share as displayed above.

The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction
with the accompanying notes.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2013

                                Note      December           June
                                              2013           2013
                                                 $              $
Current assets
Cash and cash equivalents                   75,789        397,940
Trade and other receivables                 43,216        248,769
Total current assets                       119,005        646,709

Non-current assets
Receivables                              1,521,039      1,564,396
Property, plant and equipment            4,345,235      4,298,379
Interest in joint operation      4      76,177,325     77,109,220
Total non-current assets                82,043,599     82,971,995

Total assets                            82,162,604     83,618,704

Current liabilities
Trade and other payables                 3,624,251      2,900,315
Borrowings                       5       9,816,375      8,198,499
Total current liabilities               13,440,626     11,098,814

Non-current liabilities
Borrowings                       5      23,572,155     22,988,316
Total non-current liabilities           23,572,155     22,988,316

Total liabilities                       37,012,781     34,087,130

Net assets                              45,149,823     49,531,574

Equity
Issued capital                          79,553,721     79,553,721
Reserves                              (12,052,278)   (10,128,682)
Accumulated losses                    (22,351,620)   (19,893,465)
Total Equity                            45,149,823     49,531,574

The above consolidated statement of financial position should be read in conjunction with the accompanying notes.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the Half-Year Ended 31 December 2013

                                              Issued capital       Accumulated        Share-based   Convertible note    Foreign currency          Total
                                                                        losses    payment reserve            reserve         translation
                                                                                                                                 reserve
                                                           $                 $                  $                  $                   $              $

Balance at 1 July 2013                            79,553,721      (19,893,465)          4,615,245          2,073,819        (16,817,746)     49,531,574
Comprehensive income for the half-year
Loss for the half-year                                     -       (2,458,155)                  -                  -                   -    (2,458,155)
Foreign currency translation reserve                       -                 -                  -                  -         (1,923,596)    (1,923,596)
Total comprehensive income for the half-year               -       (2,458,155)                  -                  -         (1,923,596)    (4,381,751)
Transactions with owners in their capacity
as owners                                                  -                 -                  -                  -                   -              -
Balance at 31 December 2013                       79,553,721      (22,351,620)          4,615,245          2,073,819        (18,741,342)     45,149,823


The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

                                               Issued capital       Accumulated        Share-based   Foreign currency         Total
                                                                         losses    payment reserve        translation
                                                                                                              reserve
                                                            $                 $                  $                  $             $

Balance at 1 July 2012                             76,380,048      (14,045,262)          4,193,895       (11,815,758)    54,712,923
Comprehensive income for the half-year
Loss for the half-year                                      -       (2,884,760)                  -                  -   (2,884,760)
Foreign currency translation reserve                        -                 -                  -        (3,125,467)   (3,125,467)
Total comprehensive income for the half-year                -       (2,884,760)                  -        (3,125,467)   (6,010,227)
Transactions with owners in their capacity as
owners:
Share-based payments                                        -                 -             77,600                  -        77,600
Total transactions with owners                              -                 -             77,600                  -        77,600
Balance at 31 December 2012                        76,380,048      (16,930,022)          4,271,495       (14,941,225)    48,780,296


The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

CONSOLIDATED STATEMENT OF CASH FLOWS
For the Half-Year Ended 31 December 2013
                                                 December       December
                                                     2013           2012
                                                        $              $
Cash flows from operating activities
Payments to suppliers and employees             (585,559)      (843,286)
Interest paid                                    (11,536)        (1,032)
Interest received                                     972            766
Net cash used in operating activities           (596,123)      (843,552)
Cash flows from investing activities
Project expenditure – joint operations          (255,469)    (1,209,406)
Payments to acquire fixed assets                (167,317)              -
Net cash used in investing activities           (422,786)    (1,209,406)
Cash flows from financing activities
Proceeds of borrowings                          2,547,757      2,064,982
Repayment of borrowings                       (1,850,911)              -
Transaction costs                                       -       (16,500)
Net cash from financing activities                696,846      2,048,482
Net decrease in cash and cash
equivalents                                     (322,063)        (4,476)
Cash and cash equivalents at 1 July               397,940        169,475
Effect of exchange rate differences on the
balance of cash held in foreign currencies           (88)          (316)
Cash and cash equivalents at 31
December                                           75,789        164,683


The above consolidated statement of cash flows should be read in conjunction with the accompanying notes

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the Period Ended 31 December 2013

1       BASIS OF PREPARATION OF HALF-YEAR FINANCIAL REPORT

These general purpose financial statements for the half-year reporting period ended 31 December
2013 have been prepared in accordance with Accounting Standard AASB 134 Interim Financial
Reporting and the Corporations Act 2001.

These half-year financial statements do not include all the notes of the type normally included in
annual financial statements. Accordingly, these financial statements are to be read in conjunction with
the annual financial statements for the year ended 30 June 2013 and any public announcements
made by Firestone Energy Limited during the half-year reporting period in accordance with the
continuous disclosure requirements of the Corporations Act 2001.

The accounting policies adopted are consistent with those of the previous financial year and
corresponding interim reporting period unless otherwise stated.

New accounting standards and interpretations

All new and amended Australian Accounting Standards and Interpretations effective from 1 July
2013 have been adopted, including:

    -   AASB 10 Consolidated Financial Statements

        AASB 10 establishes a new control model that applies to all entities. The new control model
        broadens the situations in which an entity is considered to be controlled by another entity
        and includes new guidance for applying the model to specific situations, including when
        acting as a manager may give control, the impact of potential voting rights and when holding
        less than a majority of voting rights may give control.

    -   AASB 11 Joint Arrangements

        AASB 11 uses the principle of control in AASB 10 to define joint control, and therefore the
        determination of whether joint control exists may change. It removes the option to account
        for jointly controlled entities using proportionate consolidation. Joint operations, which give
        the parties rights to the underlying assets and obligations for the liabilities, are accounted for
        by recognising their share of those assets and liabilities. Joint ventures, which give the
        parties rights to the net assets of the joint venture and are always structured through a
        separate vehicle, are accounted for using the equity method.

        The Group has reviewed its joint arrangement with Sekoko Coal (Pty) Ltd and determined
        that it is a joint operation as the parties have joint control and it is unincorporated.

    -   AASB 12 Disclosure of Interests in Other Entities

        New disclosures have been introduced regarding the judgments made by management to
        determine whether control exists, and to require summarised information about joint
        arrangements, associates, structured entities and subsidiaries. None of these disclosure
        requirements are applicable to the half-year financial report.

    -   AASB Fair Value Measurement

        AASB 13 establishes a single source of guidance for determining the fair value of assets and
        liabilities. It does not change when an entity is required to use fair value, but rather provides
        guidance on how to determine fair value when fair value is required or permitted. AASB 13
        also expands the disclosure requirements for all assets and liabilities carried at fair value.

    -   AASB 19 Employee Benefits

        This standard changes the definition of short-term employee benefits. The distinction
        between short-term and long-term employee benefits is now based on whether the benefits
        are expected to be wholly settled within 12 months of the reporting date.

None of these standards had a material effect on the financial position or performance of the Group.

The Group has not elected to early adopt any new standards or amendments.

Going concern

The financial report has been prepared on the going concern basis, which contemplates the continuity
of normal business activity and the realisation of assets and the settlement of liabilities in the normal
course of business.

The Group incurred a loss after tax for the half-year ended 31 December 2013 of $2,458,155 (2012
half-year: $2,884,760) and experienced net cash outflows from operating activities of $596,123 (2012
half-year: $843,552). There is a working capital deficit at 31 December 2013 of $13,321,621.

As at the date of this report, the Group has $11,955 in cash at bank, and has $504,475 available to
draw down under the loan from The Waterberg Coal Company (Waterberg). The Board is aware that
it has payments for liabilities where the terms of payment have been negotiated to ensure that they
are not payable until such time the Company is in a financial position to do so. These include trade
creditors and the Sekoko loan facility.

The Group has financial support from its major shareholder and joint venture partner The Waterberg
Coal Company. Waterberg is continuing to discuss with investment groups for the purpose of
completing further capital raisings to continue the exploration program and development activities on
the Waterberg Coal Project. Discussions with various groups have been ongoing with the result that
Waterberg is near completion of fundraising approximately $2.4 million subsequent to the reporting
date. Waterberg is in continued discussions, some of which are reaching their final stages, with
investment groups, especially in South Africa, which could lead to further equity raises in the near
future.

In considering the above, the Directors have reviewed the Group's financial position and are of the
opinion that the use of the going concern basis of accounting is appropriate as they believe the Group
will be successful in securing additional funds through an equity issue.

Should the Group not obtain funds through an equity issue, there is significant uncertainty whether the
Group will continue as a going concern and therefore whether it will realise its assets and extinguish
its liabilities in the normal course of business and at the amounts stated in the financial report.

The financial report does not contain any adjustments relating to the recoverability and classification of
recorded assets or to the amounts or classification of recorded assets or liabilities that might be
necessary should the Group not be able to continue as a going concern.

                                     Half-year   Half-year
                                         ended       ended
                                      December    December
                                          2013        2012
                                             $           $
2.     EXPENSES – FINANCE COSTS

Interest expense                     1,838,227   1,278,091
Amortisation of transaction costs      192,217     257,509
Total finance costs                  2,030,444   1,535,600

3.     DIVIDENDS

No dividend has been paid during, or is recommended for, the financial period ended 31 December
2013.

4.     INTEREST IN JOINT OPERATION

The Company is a participant with Sekoko Coal (Pty) Ltd ("Sekoko Coal") in an unincorporated coal
project in the Waterberg locality in South Africa. The Company holds a 60% interest and Sekoko Coal
a 40% interest, and the project is funded in the same ratio. The Company and Sekoko Coal share joint
control, which has been determined by reviewing the terms of the agreements between the parties.
The joint operation is carried out through the Company's 100%-owned subsidiaries, Lexshell 126
General Trading (Pty) Ltd and Checkered Flag Investments 2 (Pty) Ltd.

                                               Half-year     Year ended
                                               ended Dec      June 2013
                                                    2013              $
                                                       $
Opening balance                               77,109,220     76,735,130
Additional project costs                       1,068,267      5,258,746
Foreign exchange movements                   (2,000,162)    (4,884,656)
Closing balance                               76,177,325     77,109,220

5.     BORROWINGS
                                                December           June
                                                    2013           2013
                                                       $              $
 Current
 Unsecured loans carried at amortised cost
               
 Loan – Sekoko (1)                             7,407,059      7,948,449 
 Loan – BBY (2)                                        -        250,000
 Loan – The Waterberg Coal Company (3)         2,409,316              -
                                               9,816,375      8,198,499
 Non-current
 Loans carried at amortised cost                
 Convertible note (4)                         24,748,436     24,356,814
 Transaction costs (convertible notes)       (1,525,196)    (1,525,196)
 Transaction costs – amortised                   348,915        156,698
                                              23,572,155     22,988,316

1.   Interest is charged at the South African prime rate of 8.5% (30 June 2013: 8.5%). The loan is unsecured.

2.   These funds were advanced under a short-term funding agreement with BBY Nominees Pty Limited. It was
     repaid in December 2013.

3.   The Waterberg Coal Company Limited has agreed to lend the Company up to $3 million, to be used for the
     Company's project financing obligations in relation to the Waterberg Coal Project. The loan is interest free,
     unsecured and is to be repaid within 10 days of the Company making full repayment of the loan from
     Sekoko.

4.   The total face value of the notes is $27.145 million and the maturity date 31 January 2017. They bear
     interest at a fixed rate of 8% per annum. The notes can be converted at any time before the maturity date
     at a conversion price of $0.025. They are secured over the assets of the Group.

6.     SEGMENT INFORMATION

Management has determined that the consolidated group has one reportable segment, being coal
exploration in South Africa. As the Group is focused on mineral exploration, the Board monitors the
consolidated group based on actual versus budgeted exploration expenditure incurred by area of
interest.

This internal reporting framework is the most relevant to assist the Board with making decisions
regarding the consolidated group and its ongoing exploration activities, while also taking into
consideration the results of exploration work that has been performed to date.

Segment information provided to the Board:                                  December           December
                                                                                2013               2012
                                                                                   $                  $
Segment revenue from external sources                                              -                  -
Reportable segment loss                                                    (551,240)          (544,497)

A reconciliation of reportable segment loss to operating loss before income tax is provided as follows:

Total loss for reportable segment                                          (551,240)           (544,497)

Unallocated:
Interest revenue                                                                 967                 612
Other income                                                                       -                 369
Occupancy costs                                                                (668)            (13,800)
Legal and professional fees                                                 (90,109)           (266,763)
Administration costs                                                       (248,998)           (216,949)
Directors' fees                                                            (158,053)           (130,000)
Employee and consultant costs                                               (22,483)            (78,164)
Listing and share registry costs                                            (84,689)            (96,746)
Travel & accommodation                                                       (4,434)            (16,703)
Share-based payments                                                               -           (189,850)
Finance costs                                                            (1,298,448)         (1,332,269)
Loss before income tax from continuing operations                        (2,458,155)         (2,884,760)

                                                                            December                June
                                                                                2013                2013
                                                                                   $                   $

Reportable segment assets                                                 80,497,836          81,364,992

7.     FAIR VALUES OF FINANCIAL INSTRUMENTS

Recurring fair value measurements
The Group does not have any financial instruments that are subject to recurring or non-recurring fair
value measurements.

Fair values of financial instruments not measured at fair value
The following instruments are not measured at fair value in the statement of financial position. These
had the following fair values at 31 December 2013:

                             Carrying    Fair Value
                               Amount
                                    $             $
Current assets
Receivables                    43,216        43,216
Non-current assets
Receivables                 1,521,039     1,521,039
Current liabilities
Trade and other payables    3,624,251     3,624,251

Due to their short-term nature, the carrying amounts of current receivables and current trade and other
payables is assumed to equal their fair value.

8.     COMMITMENTS AND CONTINGENCIES

The Group's wholly-owned subsidiary Utafutaji Trading 75 (Pty) Ltd is due to make further payments to
purchase the mining tenement properties Swanepoelpan and Massenberg as follows:

Swanepoelpan             -      5,000,000 rand (A$537,317) in February 2014
                         -      17,679,479 rand (A$1,899,896) in June 2014

Massenberg               -      17,250,000 rand (A$1,853,742) in February 2014
                         -      17,250,000 rand (A$1,853,742) in August 2014

The February 2014 payments are being renegotiated.

There have been no other significant changes to commitments or contingencies since 30 June 2013.

9.      RELATED PARTIES

The Waterberg Coal Company Limited ("WCC") became a related party during the half-year via its
significant shareholding (45.88%) and its control of the Firestone board.

WCC agreed to lend the Company up to $3 million to be used for the Company's project financing
obligations in relation to the Waterberg Coal Project. As at 31 December 2013, this loan has been
drawn down by $2,409,316. Refer to Note 5.

10.      SIGNIFICANT EVENTS OCCURRING AFTER BALANCE DATE

In February 2014, the Waterberg Coal Joint Venture Partners announced that they had completed a
feasibility study into the development of an opencast mining operation to produce 10 million tonnes of
coal per annum for Eskom Holdings Limited for an initial term of 30 years.

With the exception of the above, there have been no matters or circumstances that have arisen since
31 December 2013 that have significantly affected, or may significantly affect:

      (i) The consolidated entity's operations in future financial years, or
      (ii) The results of those operations in future financial years, or
      (iii) The consolidated entity's state of affairs in future financial years.

DIRECTORS' DECLARATION

The Directors of the Company declare that:

1.      The consolidated financial statements and notes are in accordance with the Corporations Act
        2001 and:

        a.      comply with Accounting Standard AASB 134: Interim Financial Reporting,
                Corporations Regulations 2001 and any other mandatory professional reporting
                requirements; and

        b.      give a true and fair view of the consolidated entity's financial position as at 31
                December 2013 and of its performance for the half-year then ended on that date.

2.      in the Directors' opinion there are reasonable grounds to believe that the Company will be
        able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors.

Dated at Perth this 14th day of March 2014.

Stephen Miller
Executive Director

FIRESTONE ENERGY LIMITED
ACN: 058 436 794

Johannesburg
14 March 2014
Sponsor
River Group


Date: 14/03/2014 03:22:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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