Wrap Text
Report for the Quarter ended 31 March 2015
Coal of Africa Limited
(Incorporated and registered in Australia)
Registration number ABN 008 905 388
ISIN AU000000CZA6
JSE/ASX/AIM share code: CZA
("CoAL or the "Company" or the "Group")
ANNOUNCEMENT
23 April 2015
REPORT FOR THE QUARTER ENDED 31 MARCH 2015
Makhado Empowerment Structure Finalised
Coal of Africa Limited (“CoAL” or “the Company”) which operates in South Africa, together with its
subsidiaries, hereby provides its update for the quarter ended 31 March 2015. All figures are denominated in
United States dollars unless otherwise stated. A copy of this report is available on the Company's website,
www.coalofafrica.com.
Salient Operational Features
- No lost-time injuries recorded during the quarter (FY2015 Q2: nil).
- Approval granted for the amended and updated Environmental Authorisation (“EA”) for the Vele Colliery to
include the anticipated plant modifications while the application for the amendment and extension of the
IWUL for the colliery is still pending following which the Company will make a decision on the timing of the
start of the plant modifications.
Corporate and Financial Features
- Submission to the Department of Mineral Resources (“DMR”) after the conclusion of agreements with
broad based black economic empowerment (“BBBEE”) partners to acquire up to 26 per cent of the
Makhado Project.
- The Makhado BBBEE partners have two years to raise sufficient capital to acquire their interests in the
project with the final amount payable subject to due diligence and will be negotiated with the Company.
The transaction ensures that the Makhado Project complies with mining legislation in South Africa and is
an important step in the process for the granting of a New Order Mining Right (“NOMR”).
- The liability owing to Rio Tinto was reduced during the quarter on the payment of $1.0 million (FY2015
Q2: $6.3 million) while discussions continued on the settlement of the remaining capital balance of $22.5
million.
- Continued discussions with stakeholders including the communities and the Department of Mineral
Resources in advancing the award of the Makhado Project NOMR.
- The Company continued to engage with the Department of Water Affairs to progress the application for
the Makhado Project Integrated Water Use Licence (“IWUL”), which CoAL anticipates should be issued
after the receipt of the NOMR.
- Receipt of R1.5 million ($0.13 million) for the sale of the Opgoedenhoop NOMR with the balance of R17.6
million ($1.5 million) (including VAT) due by the end of H1 CY2015.
- Resignation of Michael Meeser as Chief Financial Officer and Executive Director during the quarter.
- Available cash at period end was $13.5 million and restricted cash of $2.1 million.
Post Period Event
- An appeal against the Vele Colliery amended and updated EA was lodged with the Department of
Environmental Affairs (“DEA”) during April 2015.
Commenting today, Mr David Brown, Chief Executive Officer said: “The Makhado Project empowerment
structure was formalised during the quarter and completes one of the last requirements for the granting of a
mining right for the project. The structure results in communities residing in the vicinity of the project acquiring
20 per cent of the project with a further 6 per cent acquired by Historically Disadvantaged South Africans. The
Company expects that the Makhado Project mining right will be granted during H1 CY2015, a critical step to
unlock the significant value of CoAL’s flagship hard coking and thermal coal asset.”
QUARTERLY COMMENTARY
Mooiplaats Colliery – Ermelo Coalfield (74% owned)
The Mooiplaats thermal coal colliery (“Mooiplaats Colliery”) was placed on care and maintenance during the
September 2013 quarter and recorded no lost time injuries (“LTIs”) during the period (FY2015 Q2: no LTIs).
During Q1 FY2015 the Company signed an SPA with Blackspear Capital Proprietary Limited ("Blackspear")
for the disposal of the Mooiplaats Colliery for R250 million ($20.7 million). Blackspear has until 30 April 2015,
on a non-exclusive basis, to agree terms with a financial and operational partner to fund its acquisition of
Mooiplaats. During the quarter the Company commenced discussions with other potential purchasers.
Vele Colliery – Limpopo (Tuli) Coalfield (100% owned)
The Vele coking and thermal coal colliery (“Vele Colliery”) recorded no LTIs during the quarter (FY2015 Q2:
no LTIs).
The Company’s applications to amend the colliery’s EA to include the plant modifications were approved by
the DEA during the quarter. The Company previously submitted applications to amend and renew Vele’s
IWUL and is confident these will be received during H1 CY2015. The current Vele Colliery IWUL is valid until
March 2016 and the Company has delayed the commencement of the plant modification construction to Q3
CY2015 pending these approvals, which also gives the Company further time to assess the outlook for coal
prices.
Makhado Coking Coal Project – Soutpansberg Coalfield (100% owned – 74% post BBBEE transaction)
The Makhado coking coal project (“Makhado Project”) recorded no LTIs (FY2015 Q2: no LTIs) during the
quarter.
South African mining legislation requires that mining and exploration projects have a minimum 26% black
economic empowerment shareholding and CoAL previously signed a Memorandum of Agreement to enable
seven local communities (the “Communities”) to acquire a 20% interest in the Makhado Project. During the
quarter the Company signed acquisition agreements with the Makhado Colliery Community Development
Trust (the “Trust”), an umbrella trust that will ensure communities are beneficiaries, and Yoright Investments
(Pty) Ltd (“Yoright”) formed by black entrepreneur Mike Nkuna whose shareholders will include other
Historically Disadvantaged South Africans. In terms of the acquisition agreements the Trust and Yoright have
two years to raise sufficient funding to acquire their respective twenty per cent and six per cent interests in the
project, with the final amount payable subject to due diligence and will be negotiated with the Company.
An interim court interdict was issued against the Makhado Project during Q2 FY2015 seeking to halt any
mining or construction activity on the site. During the quarter the Company, as one of the respondents,
continued preparation to have the interim interdict to set aside and does not anticipate that this process the
affect the timetable for the mine to commence commercial production during CY2019.
Greater Soutpansberg Project (MbeuYashu) (74% owned)
The MbeuYashu Project recorded no LTIs (FY2015 Q2: no LTIs) during the period.
Corporate Update
During H2 CY2014 CoAL received $46 million on completion of the first two stages of the shareholder
approved $60 million equity placement process. The attached Appendix 5B excludes potential proceeds from
stage 3 of the equity placement process which is still anticipated by the end of April 2015.
Authorised by
David Brown
Chief Executive Officer
23 April 2015
For more information contact:
David Brown Chief Executive Officer Coal of Africa +27 10 003 8000
Michael Meeser Chief Financial Officer Coal of Africa +27 10 003 8000
Celeste Harris Investor Relations Coal of Africa +27 10 003 8000
Tony Bevan Company Secretary Endeavour Corporate Services +61 08 9316 9100
Company advisors:
Jos Simson/Emily Fenton Financial PR (United Kingdom) Tavistock +44 20 7920 3150
Chris Sim/George Price/Jeremy Ellis Nominated Adviser Investec Bank plc +44 20 7597 5970
Charmane Russell/Jane Kamau Financial PR (South Africa) Russell & Associates +27 11 880 3924 or
+27 82 372 5816
Investec Bank Limited is the nominated JSE Sponsor
About CoAL:
CoAL is an AIM/ASX/JSE listed coal exploration and development company operating in South Africa. CoAL’s key projects include the Vele Colliery
(coking and thermal coal), Makhado Project (coking and thermal coal) and the Greater Soutpansberg Project /MbeuYashu.
Tenements held by CoAL and its Controlled Entities
Change
Project Name Tenement Number Location Interest in quarter
Chapudi Albert 686 MS- Limpopo~ 74%
Project*
Bergwater 712 MS-- 74%
Remaining Extent and Portion 2 of Bergwater 697 MS-- 74%
Blackstone Edge 705 MS 74%
Remaining Extent & Portion 1 of Bluebell 480 MS- 74%
74%
Remaining Extent & Portion 1 of Bushy Rise 702 MS--
Castle Koppies 652 MS-- 74%
Chapudi 752 MS -- 74%
Remaining Extent, Portions 1, 3 & 4 of Coniston 699 MS-- 74%
Driehoek 631 MS-- 74%
Remaining Extent of Dorps-rivier 696 MS-- 74%
Enfield 512 MS (consolidation of Remaining Extent of 74%
Enfield 474 MS, Brosdoorn 682 MS & Remaining Extent of
Grootvlei 684 MS)--
Remaining Extent and Portion 1 of 74%
Grootboomen 476 MS- 74%
Grootvlei 684 MS-- 74%
Kalkbult 709 MS 74%
Remaining Extent, Remaining Extent of Portion 2, 74%
Remaining Extent of Portion 3, Portions 1, 4, 5, 6, 7 & 8 of
Kliprivier 692 MS-
Remaining Extent of Koodoobult 664 MS- 74%
Koschade 657 MS (Was Mapani Kop 656 MS)- 74%
Malapchani 659 MS- 74%
Mapani Ridge 660 MS- 74%
Melrose 469 MS- 74%
Middelfontein 683 MS- 74%
Mountain View 706 MS- 74%
M'tamba Vlei 654 MS 74%
Remaining Extent & Portion 1 of Pienaar 635 MS- 74%
Remaining Extent & Portion 1 of Prince's Hill 704 MS- 74%
Qualipan 655 MS- 74%
Queensdale 707 MS- 74%
Remaining Extent & Portion 1 of Ridge End 662 MS- 74%
Remaining Extent & Portion 1 of Rochdale 700 MS- 74%
Sandilands 708 MS- 74%
Portions 1 & 2 of Sandpan 687 MS-- 74%
Sandstone Edge 658 MS- 74%
Remaining Extent of Portions 2 & 3 of Sterkstroom 689 74%
MS--
Sutherland 693 MS- 74%
Remaining Extent & Portion 1 of Varkfontein 671 MS-- 74%
Remaining Extent, Portion 2, Remaining Extent of Portion 74%
1 of Vastval 477 MS-
Vleifontein 691 MS- 74%
Ptn 3, 4, 5 & 6 of Waterpoort 695 MS-- 74%
Change
Project Name Tenement Number Location Interest in quarter
Wildebeesthoek 661 MS- 74%
Woodlands 701 MS- 74%
Kanowna West M27/41 Coolgardie^ 23.68%
and
Kalbara M27/47 23.68%
M27/59 23.68%
M27/72,27/73 23.68%
M27/114 23.68%
M27/181 21.31%
M27/196 23.68%
M27/414,27/415 23.68%
P27/1826-1829 23.68%
P27/1830-1842 23.68%
P27/1887 23.68%
Abbotshall ML63/409,410 Norseman^ Royalty
Royalty
Kookynie ML40/061 Leonora^ Royalty
Royalty
ML40/135,136 Royalty
Holfontein Remaining extent, Remaining Extent of portions 1, 5 and Mpumalanga~ 100%
11 and portions 4, 6, 9, 10, 12 and 13 of the farm
Holfontein 138 IS
Makhado Fripp 645 MS Limpopo~ 100%
Project
Lukin 643 MS 100%
Remaining Extent and Portion 1 of Overwinning 713 MS 100%
Salaita 188 MT 100%
Tanga 648 MS 100%
Remaining Extent, Portion 1 and 100%
Portion 2 of the farm Windhoek 649 MS
Generaal Limpopo~ 74%
Beck 568 MS--
Project
Bekaf 650 MS- 74%
Remaining Extent & Portion 1 of Boas 642 MS- 74%
Chase 576 MS- 74%
Coen Britz 646 MS- 74%
Fanie 578 MS- 74%
Gray 189 MT 100%
Portions 1, 2 and Remaining Extent of Generaal 587 MS- 74%
Joffre 584 MS- 74%
Juliana 647 MS 74%
Kleinenberg 636 MS- 74%
Remaining Extent of Maseri Pan 520 MS- 74%
Remaining Extent and Portion 2 of Mount Stuart 153 MT-- 100%
Nakab 184 MT-- 100%
Phantom 640 MS-- 74%
Riet 182 MT-- 100%
Rissik 637 MS- 100%
Salaita 188 MS- 74%
Change
Project Name Tenement Number Location Interest in quarter
Schuitdrift 179 MT- 100%
Septimus 156 MT-- 100%
Solitude 111 MT- 74%
Stayt 183 MT-- 100%
Telema 190 MT 100%
Remaining Extent & Portion 1 of Terblanche 155 MT-- 100%
Van Deventer 641 MS- 74%
Wildgoose 577 MS- 74%
Mopane Limpopo~ 100%
Ancaster 501 MS--
Project*
Banff 502 MS- 74%
Bierman 599 MS- 74%
Cavan 508 MS 100%
Cohen 591 MS-- 100%
Remaining Extent, Portions 1 & 2 of Delft 499 MS- 74%
Dreyer 526 MS-- 74%
Remaining Extent of Du Toit 563 MS- 74%
Faure 562 MS 74%
Remaining Extent and Portion 1 of Goosen 530 MS -- 74%
Hermanus 533 MS- 74%
Jutland 536 MS-- 100%
Krige 495 MS- 74%
Mons 557 MS- 100%
Remaining Extent of Otto 560 MS (Now Honeymoon)- 74%
Remaining Extent & Portion 1 of Pretorius 531 MS- 74%
Schalk 542 MS- 74%
Stubbs 558 MS- 100%
Ursa Minor 551 MS-- 74%
Van Heerden 519 MS-- 74%
Portions 1, 3, 4, 5, 6, 7, 8, 9, Remaining Extent of Portion 74%
10, Portions 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24,
26, 27, 29, 30, 35, 36, 37, 38, 39, 40, 41, 44, 45, 46, 48,
49, 50, 51, 52 & 54 of Vera 815 MS
Remaining Extent of Verdun 535 MS- 74%
Voorburg 503 MS-- 100%
Mooiplaats Mpumalanga~ 74%
Colliery and Portions 1, 9,14,17,18,19,20 & Remaining Extent of
prospects Mooiplaats 290 IT
Portion 2, 3 and Remaining Extent of Klipbank 295 IT 74%
Portions 1, 2 and Remaining Extent of Adrianople296 IT 74%
Portions 2 & 3 of Willemsdal 330 IT 74%
Portions 2, 3, 4 & Remaining Extent) of De Emigratie 327 74%
IT
Remaining Extent and Portions 2, 5, 8,10 & 13 of 74%
Buhrmansvallei 297 IT
Klipfontein 442 IT 74%
Vele Colliery Portions of Overvlakte 125 MS (Remaining Extent, 3, 4, 5, Limpopo~ 100%
and prospect 6, 13, 14)
Bergen Op Zoom 124 MS 100%
Semple 155 MS 100%
Voorspoed 836 MS 100%
Alyth 837 MS 100%
Change
Project Name Tenement Number Location Interest in quarter
Lizzuela 62 MS 100%
Patracia 65 MS 100%
Hacyon 69 MS 100%
Tshikunda Certain portions of Unsurveyed State Land known as Limpopo~ 60%
Mutale
Coal bed Limpopo~ 50%
Adelaide 91 MT
methane
Adieu 118 MT 50%
Alicedale 138 MT 50%
Armstice 120 MT 50%
Bergwater 697 MS 50%
Bergwater 712 MS 50%
Blackstone Edge 705 MS 50%
Bushy Rise 702 MS 50%
Chapudi 752 MS 50%
Charlotte 90 MT 50%
Chase 576 MS 50%
Cross 117 MT 50%
Doppie 95 MT 50%
Ettie 33 MT 50%
Fanie 578 MS 50%
Feskraal 85 MT 50%
Folorodwe 79 MT 50%
Fripp 645 MS 50%
Gray 189 MT 50%
Hettey 93 MT 50%
Jeannette 77 MT 50%
Joffre 584 MS 50%
Kalkbult 709 MS 50%
Laura 115 MT 50%
Lukin 643 MS 50%
Magazasand 123 MT 50%
Malapchani 659 MS 50%
Mountainview 706 MS 50%
Mount Stuart 153 MT 50%
Nakab 184 MT 50%
Naus 178 MT 50%
Neltox 92 MT 50%
Phantom 640 MS 50%
Prince’s Hill 704 MS 50%
Queensdale 707 MS 50%
Riet 182 MT 50%
Rochdale 700 MS 50%
Rynie 158 MT 50%
Salaita 188 MT 50%
Schuitdrift 179 MT 50%
Septimus 156 MT 50%
Stayt 183 MT 50%
Suzette 32 MT 50%
Tanga 648 MS 50%
Telema 190 MT 50%
Change
Project Name Tenement Number Location Interest in quarter
Terblanche 155 MT 50%
Trevenna 119 MT 50%
The Duel 186 MT 50%
Truida 76 MT 50%
Van Deventer 641 MS 50%
Wendy 86 MT 50%
Wildgoose 577 MS 50%
Windhoek 649 MS 50%
Zisaan 31 MT 50%
Ziska 122 MT 50%
Portion of Unsurveyed state land 50%
* Form part of the Greater Soutpansberg Project
- Lapsed – Mining Right Application Lodged
-- Valid – Mining Right Application Lodged
~ Tenement located in the Republic of South Africa
^ Tenement located in Western Australia
AU: Coal of Africa Limited, Suite 8, 7 The Esplanade, Mount Pleasant, Perth WA 6153, Australia, Tel: +61 8 9316 9100, Fax: +61 8 9316 5475
ZA: South Block, Summercon Office Park, Cnr Rockery Lane and Sunset Avenue, Lonehill, 2191, Tel: +27 10 003 8000 Fax: +27 11 388 8333 Email:
adminza@coalofafrica.com
Bernard R. Pryor – Chairman, David H. Brown – Chief Executive Officer , Michael G. Meeser – Chief
Financial Officer Non-executive directors: Peter G. Cordin, Andrew D. Mifflin, Khomotso B.
Mosehla ,Thabo F. Mosololi, Rudolph H. Torlage
Date: 23/04/2015 09:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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