Trading update and operational update WESCOAL HOLDINGS LIMITED Incorporated in the Republic of South Africa (Registration number 2005/006913/06) Share code: WSL ISIN: ZAE000069639 (“Wescoal” or "the Company") Trading Update and Operational Update Trading Update In terms of paragraph 3.4 (b) of the JSE Limited ("JSE") Listings Requirements, companies are required to publish a trading update as soon as they become reasonably certain that the financial results for the period to be reported on will differ by more than 20% from the previous corresponding period. Shareholders are advised that the Company expects, with reasonable certainty that the earnings per share for the six months from 1 April 2015 to 30 September 2015 (“the Period”) will be between 4.56 and 5.62 cents per share compared to 15.2 cents per share for the comparative prior six months to 30 September 2014 (“the Prior Period”). This represents a decrease of between 70% and 63%. Headline earnings per share for the Period is expected to be between 4.10 and 5.17 cents per share compared to 15.2 cents per share for the Prior Period. This represents a decrease of between 73% and 66%. The financial information on which this trading update is based has not been reviewed or reported on by Wescoal`s auditors. Operational Update Local and global market conditions remain volatile and challenging. The global mining industry has experienced significant value erosion over the past 12 months, and global thermal coal prices specifically are at multi year lows. Conditions in the South African business environment industry have been further impacted by pricing pressures, power constraints, labour related disruptions, challenges in the construction sectors, and high household debt levels, among others. While Wescoal’s exposure to Eskom has provided some relief from the general decline in global prices, it has not been immune to the difficult trading environment. Mining Division Update The Company results for the Period were negatively impacted by the absence of long term Eskom contracts. Short term Eskom contracts for the supply of 190,000 tons of coal from Intibane and Khanyisa were signed in late May 2015. A short term contract for the supply of 221,000 tons of coal from Elandspruit was signed on 7 September 2015. Eskom sales from short term contracts totaled approximately 362,000 tons during the Period compared to 906,000 tons during the Prior Period. Total coal sales from the mining division was approximately 698,000 tons during the Period compared to 934,000 tons during the Prior Period. Efforts to conclude long term Eskom coal supply contracts continue. Based on interactions with Eskom, it is understood that, if discussions extend beyond 31 October 2015, the current short term contract at Elandspruit will be rolled forward until a long term contract is concluded. Long term contracts for the Intibane and Khanyisa collieries are dependent upon the granting of regulatory permits including water use licenses. The Elandspruit project was commissioned during the second quarter of the Period. Run of Mine (“ROM”) from Elandspruit mine was effectively processed at the nearby processing plant and the beneficiated product sold to end users. The project is on track and has already demonstrated its ability to produce approximately 2 million tons of ROM per annum on an annualised basis. Debottlenecking and optimisation projects at the Elandspruit mine and processing plant continue in order to increase production capacity and reduce operational risk. Trading Division Update Wescoal’s trading division delivered a very strong first half performance, exceeding expectations in a difficult business environment. Improved credit controls and debtor management limited bad debt exposure and improved the quality of the trading book. Lower sale volumes and downward price pressures during the Period were offset by internal cost saving and productivity initiatives. Sales from the trading division totaled 550,000 tons during the Period compared to 626,000 tons during the Prior Period. Financial Performance Update The lack of long term bank funding, which is reliant on the conclusion of long term Eskom contracts, meant that the Elandspruit and other growth projects were funded out of operational cash flows. Approximately R144 million was spent on growth projects during the Period. While this is testament to Wescoal’s strong cash flow generation, it has come at a price. Revenue generating opportunities which required ready cash were forgone in exchange for the continued development of the Elandspruit project and growth opportunities were pursued with caution. The recently announced Wescoal rights issue was initiated in response to these constraints and to raise equity funding to complete development of the Elandspruit project. Shareholders are reminded that the earnings per share attributable to the immediately preceding six month period of 1 October 2014 to 31 March 2015 as published on 23 June 2015, indicates 0.50 cents per share (15.7 cents per share for full year to 31 March 2015 less 15.2 cents per share for the period ranging from 1 April 2014 to 30 September 2014). The earnings per share attributable to the Period represents an increase of 800% at the bottom end and an increase of 1020% at the top end to this number. Earnings per share attributable to the month of September 2015 are expected to be between 2.30 and 2.80 cents per share, mainly on the back of the Elandspruit Eskom contract. This financial information has not been reviewed or reported on by Wescoal`s auditors. Release of 2016 Interim Results The Company`s financial results for the Period are expected to be released during the week of 19 October 2015. Isando 16 October 2015 Sponsor Nedbank CIB Date: 16/10/2015 02:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.