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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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