Wrap Text
Mining Right granted for the Makhado Project
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
18 May 2015
Mining Right granted for the Makhado Project
Coal of Africa Limited (“CoAL” or “the Company”) is pleased to announce the granting by the South African
Department of Mineral Resources (“DMR”) of a New Order Mining Right (“NOMR”) in terms of the Mineral and
Petroleum Resources Development Act (Act 28 of 2002) for its flagship Makhado hard coking and thermal
coal project in Limpopo Province. The DMR also granted the Section 11 approval transferring the right from
CoAL to its wholly owned subsidiary Baobab Mining & Exploration (Pty) Ltd (“Baobab”), which will be the
project development company.
CoAL completed a Class II Definitive Feasibility Study on the Makhado Project (“Makhado” or the “Project”)
during 2013 and anticipates developing the colliery to produce 2.3 million tonnes per annum (“Mtpa”) of hard
coking coal and a further 3.2 Mtpa of thermal coal over a 16 year life of mine. The project can produce hard
coking coal that has been benchmarked by independent consultants. Tests confirmed that the coal can be
successfully beneficiated to produce high strength coke for the steel manufacturing industry.
Following the granting of the Section 11 approval, the Makhado Colliery Community Development Trust (the
“Trust”) representing seven local communities living in the vicinity of the project will acquire a 20% interest in
Baobab. A further 6% interest in Baobab has been acquired by Yoright Investments (Pty) Ltd (“Yoright”)
formed by black entrepreneur Mike Nkuna whose shareholder grouping will include other Historically
Disadvantaged South Africans. The Trust and Yoright have two years to raise sufficient funding to acquire
their interests in Baobab with the final amount payable subject to due diligence which will be negotiated with
the Company. The completion of the acquisition transactions will result in the Trust owning 20%, Yoright 6%
and CoAL 74% of Baobab.
The Company has initiated discussions with potential customers following the granting of the NOMR, which is
a critical step in the process to secure off take agreements for the coal products. The granting of the NOMR is
also an important step towards sourcing the funding required to develop the Makhado Project, where
construction is expected to begin in H1 CY2016. CoAL anticipates that construction will take 26 months with a
further four month ramp-up phase by which time the project will produce 5.5 Mtpa of saleable product.
David Brown, Chief Executive Officer of CoAL, commented:
"The granting of the mining right is a significant milestone for CoAL as it allows the Company to proceed
towards developing Makhado, its flagship project. It is an important vote of confidence in the economic
potential of the Project, not only for the region, but also for the Limpopo province. As soon as development
starts at Makhado a meaningful contribution will be made to the growth and development goals of the
province, improving the socio-economic environment of the communities in the area of operation. CoAL looks
forward to a successful working relationship with its partners in the area.
“Makhado’s capacity to produce hard coking and thermal coal alongside its close proximity to underutilised rail
infrastructure ensures its role as a potential domestic and/or export supplier. The level of production from the
Project has the potential to stimulate domestic industrialisation once it reaches full capacity. CoAL awaits the
approval of the Integrated Water Use Licence from the Department of Water and Sanitation, and will continue
to engage with the Department in this regard.”
Authorised by
David Brown
Chief Executive Officer
18 May 2015
For more information contact:
David Brown Chief Executive Officer Coal of Africa +27 10 003 8000
Celeste Riekert 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 Tavistock +44 20 7920 3150
Kingdom)
Chris Sim/George Price/Jeremy Nominated Adviser Investec Bank plc +44 20 7597 5970
Ellis
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.
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,
Non-executive directors: Peter G. Cordin, Andrew D. Mifflin, Khomotso B. Mosehla , Thabo F. Mosololi, Rudolph H. Torlage
Date: 18/05/2015 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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