THE WATERBERG COAL COMPANY LIMITED - Market Update

Market Update

The Waterberg Coal Company Limited
(Incorporated in Australia)
(Registration number ABN 64 065 480 453)
ASX: WCC | JSE: WCC | ISIN: AU000000WCC9
(“WCC” or “the Company”)

Market Update

Following the recent announcements made by The Waterberg Coal
Company Limited (the Company) and Firestone Energy Limited
(collectively the Waterberg Group) on 25 February 2016, the
Company wishes to advise that it is in negotiations with
Villora Limited (who are in the process of changing its name
to AME International Limited) (AME) to assist it in a
recapitalisation of the Company’s balance sheet).        This
recapitalisation includes, inter alia, the provision of
working capital and a potential transaction to acquire the
secured convertible note (SCN) held by Standard Bank of South
Africa   Limited   (SBSA)   (and   other   participants) (the
Noteholders) in the Company (the Proposed Transaction).

Whilst the discussions with AME are progressing, AME is also
in discussions with SBSA in respect of the Proposed
Transaction.   We are advised that, if AME is successful in
their negotiations with SBSA, it would be their intention to
convert the debt into ordinary equity in the capital of the
Company.   This would have a significantly positive effect on
the Company’s balance sheet.    Additionally, AME proposes to
procure sufficient working capital to not only advance the
Company’s project but also complete the recapitalisation of
the Waterberg Group’s balance sheet.    Whilst the Company is
supportive of the Proposed Transaction, it cannot give any
certainty on the completion nor the timing of the Proposed
Transaction, as it requires the support of the Noteholders.

The Company also wishes to advise that it is currently in
discussions with potential financiers concerning the arranging
of suitable project finance for the prospective development of
the Waterberg Coal project. The Company will keep the market
advised of developments when terms of a financing mandate have
been agreed and executed.

As part of the progression towards a project start up, the
Company   is   in   preliminary   negotiations  with   various
prospective coal offtaking parties and logistics operators for
the evacuation of coal product to the Port of Richards Bay.
These discussions are progressing well and as soon as
negotiations have been finalised and agreements entered into,
the market will be advised accordingly.
Whilst the aforementioned negotiations are progressing, the
Company has been in contact with the Noteholders with a view
to gaining their support for the Proposed Transactions and
also with respect to the provision of an interim working
capital facility pending the completion of the potential
transactions referred to above.

With a view to transitioning towards a potential project start
up and implementation of the above, the Company wishes to
advise the market of the following Board changes:

(a)   Mr Mark Craddock has been appointed as a Director and as
      acting Chief Executive Officer.     Mr Craddock has over
      30 years’   experience   in   various    operational   and
      managerial roles in the Southern African coal industry
      from production to project delivery.    He is also a past
      chairman of the Southern Africa Coal Processing Society.

(b)   Mr Gavin Rodie has been appointed as a Non-Executive
      Director with immediate effect.         Mr Rodie has an
      extensive background in the commercial and corporate
      banking sector and more recently he has diversified into
      property development and project management.

(c)   Mr Stephen Miller has resigned as a Director and Chief
      Executive Office.



10 March 2016

Dr Mathews Phosa
Chairman
The Waterberg Coal Company Limited

Sponsor

The Standard Bank of South Africa Limited




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