Wrap Text
September 2014 Quarterly Activities Report
THE WATERBERG COA
COMPANY LIMITED
ABN 64 065 480 453
ASX Release
September 2014 Quarterly Activities Report
31 October 2014
THE WATERBERG COAL
COMPANY LIMITED The Waterberg Coal Project (WCP)
ABN 64 065 480 453
The Waterberg Coal Company Limited (WCC) is the lead
Registered office: and managing partner in the Waterberg Coal Project
Level 2, 1 Walker Avenue West (WCP) joint venture, situated in the Limpopo Province,
Perth, Western Australia 6005
Australia
South Africa. The Project currently has identified coal
resources of 3.883 billion tonnes1 of coal contained within
the granted mining rights; of which 2.070 Billion tonnes are
Tel:+61 8 9485 0888 contained within the measured category1.
Fax: +61 8 9485 0077
The WCP Joint venture entered into a Memorandum of
South African office: Understanding with Eskom Holdings in March 2012 for the
Level 1, The Place, supply and delivery of 10 million tonnes per annum (mtpa)
1 Sandton Dr of coal from the Project.
Sandton, 2146
South Africa
In May 2012 the mineral consultancy, SRK Consulting of
Tel: +27 10 594 2240 Johannesburg, South Africa were commissioned by the
Fax: +27 10 594 2253 WCP joint venture partners to undertake a technical and
economic feasibility study for the development of the
Export Project. In October 2013, SRK Consulting delivered
Contact: to the project partners the results of the Definitive feasibility
study (DFS).
Mr Stephen Miller
Executive Director/CEO
A summary of the activities arising from the DFS in the
Or period ending 30th September 2014 is set out below.
Investor relations
in South Africa:
Bruce Tinney
+27 (83) 408 3028 Project Optimisation Study – The Eskom Project
E-mail: WCP’s technical team continued with project value
info@waterbergcoal.net engineering and optimisation process during the
September quarter. As part of the optimisation process,
Engineering, Procurement and Construction Management
contractors ARDBEL (a joint venture between ELB
Directors:
Engineering Services and the DRA Group), reviewed the
Dr Mathews Phosa project capital expenditure requirements arising from the
(Chairman)
SRK Feasibility Study. Significant capital savings have
Stephen Miller been identified.
(Executive Director and
CEO)
With respect to off-take discussions with Eskom; these are
Lee Boyd on-going and include finalisation of the coal specifications,
(Director and Company
pricing, delivery dates; and the review by Eskom of the due
Secretary)
diligence into the SRK Consulting DFS for the Eskom
ASX / JSE Symbol: Project.
WCC
The Export Project - Definitive Feasibility Study
During the quarter, Ardbel were commissioned to produce a DFS on the Export Project, to be
located in the south of the WCP area. The Export Project anticipates the build up to 2 million
tonnes per annum in export production; with first coal produced during the 1st quarter 2016.
The Ardbel study is due for completion on 31st October 2014. The abbreviated period to
complete this study accrues from the significant database and work product that was
generated from the Eskom Project DFS, with additional work being carried out with respect
to logistics (including rail), coal product off-take arrangements and water.
Access to Water
During the quarter, the technical team engaged with the Lephalale Municipality with regards
to the utilisation of the treated water from the Paarl Water Treatment Plant. The plant has a
treatment capacity of 10 million litres per day, or 3.64 million cubic metres per annum. The
WCP proposes to take over responsibility and management of the operations of the water
treatment plant for the purposes of its proposed project development(s). Pursuant to the
arrangements tendered to the Lephalale Municipality, a proposal for the refurbishment and
upgrade of the plant has been submitted for the Municipality’s approval.
Discussions with Exxaro
Pursuant to the optimisation work being undertaken on both the mine plan and infrastructure
development; the WCP technical team continued to engage with Exxaro to investigate the
potential of sharing of logistics infrastructure. Discussions include WCP gaining short term
access to existing infrastructure, the joint development of the Southern logistics infrastructure
and the joint development the Northern logistics infrastructure.
Port capacity
During the quarter, WCP entered into discussions with Grindrod to participate in the capacity
upgrade at the Navitrade port facility at Richards Bay. The facility, operated by Grindrod
Limited, is to be upgraded by an additional 1.0 Mtpa, to 4.5 Mtpa by October 2015. In
addition to the Navitrade capacity upgrade, the Project Partners are pursuing other port
allocation opportunities.
Project funding – The Export Project
As discussed above, Ardbel has been commissioned to produce a DFS for a stand-alone
Export Project. The WCP partners have been in discussions with various Banks with respect
to funding arrangements for the proposed development. Pursuant to the discussions to date
with such parties, The Snowden Group has been commissioned as Independent Technical
Experts to produce a due diligence report for the purposes of Bank funding. It is anticipated
that the Snowden report will be available for such purposes during the month of December
2014.
South Australian Tenements
The Company continues to hold 3 exploration tenements in the Gawler Craton of South
Australia which are highly prospective for gold and copper-gold mineralisation. The Gawler
Craton is host to large copper-gold deposits such as Olympic Dam and Prominent Hill to the
east, and gold deposits such as Challenger, Tarcoola and Tunkillia in the west.
During the quarter, the Company continued to compile and validate exploration data relating
to the tenements and is assessing the prospectivity of targets within the license holdings.
The Company has designed work programmes to test these targets however these work
programmes have not been carried out to date. The Company is considering its strategy with
regards to these tenements.
Corporate
On 9 April 2013, WCC drew down on the Convertible Secured Facility, with a face value of
A$35 million, from a syndicate of Lenders with The Standard Bank of South Africa Limited
(“Standard Bank”) as facility agent (the “Lenders”).
As set out in the 16 September Announcement, WCC had entered into discussions with the
Lenders with respect to the restructuring of the Facility; including an extension to the
Facility’s maturity date. Shareholders are advised that the Facility matured on 9 October
2014 and in terms of the agreement between the Lenders and WCC, has been extended but
without a specified period for repayment.
A portion of capital owing under the Facility, amounting to A$4.3m, was repaid to the
Lenders by WCC.
The revised balance of the Facility as at 17 October 2014 together with accumulated interest
is A$39.3m.
On 16th July 2014, WCC resolved to extend the existing A$3 million facility to Firestone
Energy Limited and to create a new A$3 million facility.
Stephen Miller
Executive Director and CEO
The Waterberg Coal Company Limited
Table 1 – Coal Resource on all six Waterberg Coal Project Properties under both
Prospecting Permit and Mining Right
CV
Coal Ash IM % Vol % TS %
Resource Classification (Mj/kg)
Resource¹(Mt) % (ad) (ad) (ad) (ad)
(ad)
Measured 2070.3 57.9 2.2 17.6 10.51 0.96
Indicated 856.3 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 3883.3 58.5 2.2 17.5 10.33 0.99
Coal Resource ¹ based on minimum thickness cut-off of 0,5m
Note 1: Competent Person Statement
Gemecs (Pty) Limited was commissioned by the Waterberg Coal Company "WCC", 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 Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves. Mr Niekerk consents to the inclusion in the announcement of the matters based on this information in the form
and context in which it appears.
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