Wrap Text
MARCH 2015 QUARTERLY ACTIVITIES REPORT
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')
ASX Release
30 April 2015
MARCH 2015 QUARTERLY ACTIVITIES REPORT
The Waterberg Coal Project (WCP)
Firestone Energy Limited (FSE) is a participant in the Waterberg Coal Project (WCP) joint venture,
situated in the Limpopo Province, 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 contained within the measured category.
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) of coal from the Project.
In May 2012 the mineral consultancy, SRK Consulting of Johannesburg, South Africa were
commissioned by the WCP joint venture partners to undertake a technical and economic feasibility
study for the development of the coal project predicated on the proposed off-take arrangements with
Eskom ("The Eskom Project"). In October 2013, SRK Consulting delivered to the project partners the
results of the Definitive feasibility study (DFS).
A summary of the activities arising from the DFS in the period ending 31 March 2015 is set out below.
Project Optimisation Study - The Eskom Project
With the current focus on the Export Project, work on the Eskom project in terms of optimisation and
on-going value engineering continues to be on hold until further direction is received from Eskom in
terms of advancing the status of negotiations with respect to the Coal Supply Agreement.
The Export Project - Definitive Feasibility Study
Work has continued on a DFS for the Export Project, to be located in the south of the WCP area. The
Export Project anticipates the build up to 4 million tonnes per annum (in saleable product) over a six
year period. First coal product is forecast, subject to financing arrangements, for the 4th quarter
2016.
Access to Water
As reported on 31 October 2014, WCP Partners have entered into a Memorandum of Understanding
with the Lephalale Municipal Council with respect to the Paarl Waste Water Treatment Plant whereby
the WCP Partners will take over the management and operation of the water treatment facility for the
purpose of supplying water to the WCP.
During the quarter the Lephalale Municipal Council ratified the Memorandum of Understanding
previously entered into by the parties in a council meeting in January 2015.
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
As previously advised the 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 Export coal product. Negotiations are proceeding on the final volumes, the timeline and
the contracted price. A formal contract will be executed once final arrangements with off-taking parties
have been completed with confirmed volumes for off-takes 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 project funding.
Corporate
On 20 January 2015 the company announced to the market the receipt of Tranche 1 funds in the sum
of Au$ 3.13million (after costs). 475,971,429 Convertible Notes of AUS$0.007 each have been issued
to Four Oaks Credit Fund Limited. Proceeds have been allocated to settlement of project related
costs.
On 16 March 2015 the Company advised the market that the funding facility made available by the
Standard Bank of South Africa (SBSA) to its major shareholder, the Waterberg Coal Company
Limited (WCC) (45.88%), was due for repayment on 9 April 2015. At that time the Company advised
the market that WCC were in discussions with respect to refinancing the SBSA facility. At the date of
this report these discussions are ongoing.
On 16 March 2015 the Company released its half year financial report.
On 17 March 2015 the Company entered into a trading halt as a consequence of its majority
shareholder company, The Waterberg Coal Company Limited advising of group re-financing
discussions. Subsequently, the Company then entered into a voluntary suspension of its shares on 19
March 2015 following the trading halt and as at the date of this report remains in voluntary
suspension.
Stephen Miller
Managing Director
Table 1 - Coal Resource on all six Waterberg Coal Project Properties under both Prospecting
Permit and Mining Right
Resource Classification Coal Ash % IM % Vol % CV (Mj/kg) TS %
Resource(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 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.
Appendix 1 - Interests in mining tenements held
Tenement table
The Company's interest in the Waterberg Coal Project, located in South Africa:
Properties Right under Relevant Holder Interest* Issue Date Expiry Date
which the Joint at Beginning
properties Venture and end of
are held quarter
Vetleegte Vetleegte First Joint Uzalile 37.39% Granted Renewal lodged 19
Prospecting Venture Joint New Order September 2011 and
Right Venture Prospecting prior to the expiry
(Sekoko Right No. date.
Resources 651/2006
and on 19/10/06 Section 18(5) of the
Uzalile) MPRDA provides that
prospecting right in
respect of which an
application for
renewal has been
lodged will remain in
force until such time
as the renewal
application has been
granted or refused.
Olieboomsfontein Duikerfontein First Joint Sekoko 37.39% Granted 3 July 2016
Prospecting Venture Coal New Order
Right Prospecting
Right No.
681/2007,
on 13/10/05.
Renewal on
3 July 2013
Duikerfontein Duikerfontein First Joint Sekoko 37.39% Granted 3 July 2016
Prospecting Venture Coal New Order
Right Prospecting
Right No.
681/2007,
on 13/10/05.
Renewal on
3 July 2013
Swanepoelpan Duikerfontein First Joint Sekoko 37.39% Granted 3 July 2016
Prospecting Venture Coal New Order
Right Prospecting
Right No.
681/2007,
on 13/10/05
Smitspan Mining Right Second Sekoko 37.39% Granted 16/09/2041
Joint Coal New Order
Venture Mining Right
No.
22/2011, on
17/09/11
Massenberg Mining Right Second Sekoko 37.39% Granted 16/09/2041
Joint Coal New Order
Venture Mining Right
No.
22/2011, on
17/09/11
Minnasvlakte Mining Right Second Sekoko 37.39% Granted 16/09/2041
Joint Coal New Order
Venture Mining Right
No.
22/2011, on
17/09/11
Hooikraal Mining Right Second Sekoko 37.39% Granted 16/09/2041
Joint Coal New Order
Venture Mining Right
No.
22/2011, on
17/09/11
FIRESTONE ENERGY LIMITED
ABN 71 058 436 794
Registered office:
Level 2, 1 Walker Avenue West Perth, Western Australia 6005, Australia
Tel: +61 8 9485 0888
Fax: +61 8 9485 0077
South African office:
Level 1, The Place,1 Sandton Dr, Sandton, 2146, South Africa
Tel: +27 10 594 2240
Fax: +27 10 594 2253
Contacts:
Mr Stephen Miller
Managing Director
Investor relations
in South Africa:
Lawrie Mackintosh
E-mail:
info@waterbergcoal.net
Corporate Details:
Major Shareholders:
The Waterberg Coal Company Ltd
Directors and Officers:
Non-Executive Directors:
Dr Mathews Phosa (Chairman)
Edwin Leith Boyd
Officers:
Mr Stephen Miller Managing Director
Ms Amanda Matthee CFO
Mr Edwin Leith Boyd Company Secretary
ASX / JSE Symbol:
FSE
Web: www.firestoneenergy.com.au
Johannesburg
30 April 2015
Sponsor
River Group
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