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Full year results for the period ending June 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 10 September 2015
FULL YEAR RESULTS FOR THE PERIOD ENDING JUNE 2015
Coal of Africa Limited (“CoAL” or the “Company”) is pleased to provide its Annual Financial Statements for the
year ended 30 June 2015. The full report is available on the Company’s website: www.coalofafrica.com.
Highlights:
- No fatalities (FY2014: none) and no lost time injuries recorded during the year (FY2014: one);
- Significant decrease in loss for the year of US$6.7 million (2014: US$84.1 million);
- No modification to Going Concern opinion for period ending June 2015, first since FY 2011; and
- Completion of the US$65 million (before charges and foreign currency movements) shareholder
approved three stage equity investment process.
Makhado (“Makhado” or the “Project”):
- In May 2015 the Department of Mineral Resources (“DMR”) granted the Company a New Order
Mining Right (“NOMR”) for Makhado as well as Section 11 approval transferring the Project from
CoAL to its subsidiary Baobab Mining (Pty) Ltd; and
- Continued engagements with the Department of Water Affairs (“DWA”) to progress the application
for Makhado’s Integrated Water Use License (“IWUL”), expected to be granted in the second half of
2015.
Vele Colliery (“Vele” or the “Colliery”):
- Approval granted for the amended and updated Environmental Authorisation (“EA”) for Vele to
include the anticipated plant modifications while the application for the amendment and extension of
the IWUL for the colliery is anticipated to be granted in due course, following which the Company will
make a decision on the timing of the start of the plant modifications;
- Historic Biodiversity Offset Agreement for the Colliery signed in October 2014 with the Department
of Environmental Affairs (“DEA”) and South African National Parks; and
- Completion in December 2014 of the Front End Engineering and Design (“FEED”) process for the
Colliery plant by independent consultants, Sedgman.
General:
- Restructuring of rehabilitation guarantees resulted in the release of US$4.7 million of restricted
cash;
- Conclusion of agreements in March 2015 with BBBEE partners to acquire up to 26 per cent of
Makhado. The 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;
- Agreement reached for the US$19.8 million liability (FY2014: US$29.8 million) owing to Rio Tinto
with the balance to be paid in monthly instalments of at least US$100,000 plus interest and the
obligation settled by June 2017. During the year the Company paid capital of US$10 million
(FY2014: US$0.2 million) and acccrued interest of US$1.6 million (FY2014: nil);
- Payment of US$10 million to Grindrod Corridor Management Proprietary Limited and Terminal de
Carvão da Matola Limitada in late 2014, settling all outstanding liabilities and take-or-pay obligations
until 31 December 2016. Any further obligations would be dependent on any future capacity
requirements still to be contracted;
- Settlement of the Investec Bank Limited working capital facility in November 2014 on the payment
of US$5.9 million;
- Settlement of Envicoal Litigation matter; and
- Appointment of De Wet Schutte as Chief Financial Officer and Executive Director of the Company.
Future developments
The NOMR for Makhado was granted in May 2015 as well as section 11 approval for the transfer of the
Project to CoAL’s 74 per cent owned subsidiary, Baobab Mining. The Company completed a Definitive
Feasibility Study (“DFS”) for Makhado during FY2013 which indicated that the Project has 344.8 million
mineable tonnes in situ and a 16 year life of mine. CoAL has regular interactions with the DWA and expects
that the IWUL for Makhado will be granted in the second half of 2015 with the 26 month construction phase
due to commence in the second half of 2016, post receipt of the IWUL. The opencast project is expected to
produce 12.6 million tonnes per annum (“Mtpa”) of run of mine (“ROM”) coal yielding 2.3Mtpa of hard coking
coal and 3.2Mtpa of thermal coal for domestic and export markets.
The Company also completed the FEED process for Vele. Once constructed, the Colliery will be able to
produce multiple products simultaneously. The amended EA for the Colliery was granted during FY2015 and
the Company anticipates that the application for an amendment and extension of the Vele’s IWUL will be
granted in due course. The Colliery’s current IWUL expires in March 2016. In addition the Company has
applied for additional permissions relating to a diversion to a non-perennial stream and following the granting,
CoAL will make a decision on the commencement of the plant modifications taking cognisance of prevailing
market conditions into account. This is expected to take place towards the end of June 2016.
The exploration and development of CoAL’s prospects in the Soutpansberg coalfield are the catalyst for the
long-term growth of the Company. The DMR has accepted the Company’s NOMR applications for the
Mopane, Generaal and Chapudi projects, all forming part of the MbeuYashu Project.
Financial review
No revenue was generated during the year as result of all operations on care and maintenance (FY: 2014
US$3.3 million generated by Mooiplaats).
Non-cash charges of US$7.5 million (FY2014: US$54.3 million) including:
- No impairment recorded during the year (FY2014: US$14.9 million on Mooiplaats);
- Depreciation and amortisation of US$1.4 million (FY2014: US$2.2 million);
- Unrealised foreign exchange gain of US$18.9 million (FY2014: US$36.4 million loss) as a result of
the South African rand weakening against the US dollar; and
- Share based payment expense of US$3.1 million (FY2014: US$0.7 million).
Total unrestricted cash balances at year-end, including cash held by operations available for sale of US$17.8
million (FY2014: US$2.1 million).
Chief Executive Officer, David Brown, commented:
“The financial results for the year ended 30 June 2015 reflect the success of the turn-around-strategy that
was necessary for CoAL to be able to continue its significant progress within the current prevailing market
conditions. The Company has resolved legacy issues, strengthened its balance sheet and made positive
progress with respect to its flagship asset, the Makhado hard coking and thermal coal project. The next
financial year will demonstrate the continued execution of the Company’s strategy with the focus on securing
project financing for Makhado.”
For more information contact:
David Brown Chief Executive Officer Coal of Africa +27 10 003 8000
De Wet Schutte Chief Financial 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 Kingdom) Tavistock +44 20 7920 3150
Matthew Armitt/Ross Allister Nominated Adviser Peel Hunt LLP +44 20 7418 8900
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, development and mining company operating in South Africa. CoAL’s key projects include the Vele
Colliery (coking and thermal coal), the Greater Soutpansberg Project /MbeuYashu, including CoAL’s Makhado Project (coking and thermal coal).
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 De Wet O.Schutte - Chief Financial Officer
Non-executive directors: Peter G. Cordin, Andrew D. Mifflin, Khomotso B. Mosehla , Thabo F. Mosololi, Rudolph H. Torlage
Date: 10/09/2015 01:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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