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FIRESTONE ENERGY LIMITED - MARCH 2015 QUARTERLY ACTIVITIES REPORT

Release Date: 30/04/2015 15:11
Code(s): FSE     PDF:  
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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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