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THE WATERBERG COAL COMPANY LTD - December 2014 Quarterly Activities Report

Release Date: 02/02/2015 08:00
Code(s): WCC     PDF:  
Wrap Text
December 2014 Quarterly Activities Report

The Waterberg Coal Company Limited
 (Incorporated in Australia)
 (Registration number ABN 64 065 480 453)
 ASX: WCC | JSE: WCC | ISIN: AU000000WCC9
 (“WCC” or “the Company”)


ASX Release

31 December 2014 

THE WATERBERG COAL
COMPANY LIMITED
ABN 64 065 480 453               December 2014 Quarterly
Registered office:
Level 2, 1 Walker Avenue West
                                 Activities Report
Perth, Western Australia 6005
Australia

                                 The Waterberg Coal Project (WCP)
 Tel:+61 8 9485 0888
 Fax: +61 8 9485 0077
                                 The Waterberg Coal Company Limited (WCC) is
 South African office:           participant in the Waterberg Coal Project (WCP) joint
 Level 1, The Place,             venture, situated in the Limpopo Province, South Africa.
 1 Sandton Dr                    The Project currently has identified coal resources of 3.883
 Sandton, 2146                   billion tonnes1 of coal contained within the granted mining
 South Africa                    rights; of which 2.070 Billion tonnes are contained within
                                 the measured category1.
 Tel: +27 10 594 2240
 Fax: +27 10 594 2253            The WCP Joint venture entered into a Memorandum of
                                 Understanding with Eskom Holdings in March 2012 for the
                                 supply and delivery of 10 million tonnes per annum (mtpa)
        Contact:                 of coal from the Project.
   Mr Stephen Miller
 Executive Director/CEO          In May 2012 the mineral consultancy, SRK Consulting of
                                 Johannesburg, South Africa were commissioned by the
            Or                   WCP joint venture partners to undertake a technical and
                                 economic feasibility study for the development of the
   Investor relations
     in South Africa:
                                 Eskom Project (Eskom Project). In October 2013, SRK
      Bruce Tinney               Consulting delivered to the project partners the results of
    +27 (83) 408 3028            the Definitive feasibility study (DFS).

        E-mail:                  The Export Project - Definitive Feasibility Study
 info@waterbergcoal.net
                                 During the quarter, work continued on a DFS for the Export
                                 Project, to be located in the south of the WCP area. The
        Directors:               Export Project anticipates the build up to 4 million tonnes
   Dr Mathews Phosa              per annum (in saleable product) over a six year period,
       (Chairman)                with first coal product forecast for the 2nd quarter 2016.
      Stephen Miller             The abbreviated period to complete this study accrues
 (Executive Director and         from the significant database and work product that was
          CEO)                   generated from the Eskom Project DFS. Additional work
        Lee Boyd                 has been carried out with respect to logistics (including
 (Director and Company           rail), coal product off-take arrangements, water and mine
        Secretary)               planning

   ASX / JSE Symbol:
          WCC

Project Optimisation Study – The Eskom Project

With the current focus on the Export Project, work on the Eskom project in terms of optimisation 
and ongoing value engineering is on hold until further direction is received from Eskom in terms 
of advancing the status of negotiations with respect to the Coal Supply Agreement. It is expected 
that discussions in this respect will resume in the March quarter 2015.

Access to Water

Discussions with the Lephalalele Municipality (Municipality), as reported on 31 October 2014, have 
advanced to the stage that Sekoko Coal (Pty) Ltd (Sekoko), a South African registered company and 
holder of the rights, titles and interests that comprise the WCP, has received confirmation by way 
of an MOU from the Municipality that an in principle agreement has been reached for Sekoko to be 
awarded the right to utilise all treated water, other than water currently contracted by the 
Municipality to third parties and to become operator of the plant.

The Paarl Water Treatment plant has a treatment capacity of 10 million litres per day, or 3.64
million cubic metres per annum. Sufficient water is available for the proposed project development.

Port capacity

During the quarter WCP Partners entered discussions with RBT Grindrod Terminals regarding port 
allocation at the Richards Bay Terminal (RBGT) for confirmation of their capacity for the handling 
and loading of project coal. Negotiations are proceeding on the final volumes, timeline and contracted 
price. A formal contract will be executed once final arrangements with offtaking parties has been 
completed with confirmed volumes for offtakes for the first 5 years.

Project funding – The Export Project

As previously advised, the WCP Partners have commissioned a DFS for a stand alone Export Project. 
Accruing from the preliminary results of the DFS, the WCP Partners are in discussions with certain 
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 technical 
due diligence will be completed during the March quarter so that a draft financing termsheet can also be
tendered during the quarter.

South Australian Tenements

The Company holds 3 exploration tenements in the Gawler Craton of South Australia which are highly 
prospective for gold and copper-gold mineralisation. The Company entered into an agreement of to sell 
EL4445 which was announced to the market on 24 November 2014. 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 remaining 
2 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 31 October 2014 the Company announced to the market that the Secured Convertible
Note facility with SBSA had matured on 9 October 2014 and continues to be extended on an
on-demand basis without a specific date for repayment. A portion of the accrued interest in
the sum of $4.3 million was paid to the Lenders during the period. The revised balance of the
facility as at 17 October 2014 together with accumulated interest was $39.3 million.

On 10 November FSE, WCC’s 45,88% subsidiary announced that it had entered into a term
sheet for a US$5 million capital raising by way of a convertible note issue.

On 24 November 2014 the Company announced the entry into a sale and purchase
agreement with Apollo Minerals Limited in respect of EL 4445, one of the South Australian
Licences.

On 28 November 2014 the Company held its Annual General Meeting of shareholders at
which meeting all resolutions were passed.

On 31 December 2014 the Company announced the lapsing of some 11,992,883 quoted
options and 23,187,500 unquoted options.

Post Quarter

On 20 January 2015 WCC’s 45.88% subsidiary, FSE announced to the market the receipt of
AU$3.1million (after costs) being tranche 1 of the drawdown pursuant to the convertible note
facility. These funds have been allocated by FSE in the main to project costs and to provide
working capital.




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.


02 February 2015

JSE Sponsor

The Standard Bank of South Africa Limited

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