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THE WATERBERG COAL COMPANY LIMITED - Market Update

Release Date: 30/08/2016 13:10
Code(s): WCC     PDF:  
Wrap Text
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
Further the Quarterly Activities Report dated 4 August 2016, The Waterberg
Coal Company Limited (the Company) wishes to provide Shareholders with a
update of the Company’s current activities and proposed course of action
with respect to the financing initiatives and the discussions on foot with
various parties for a proposed recapitalisation of the Company’s balance
sheet (Recapitalisation) and overall group reorganisation (Reorganisation)
Shareholders will be aware that the Company’s major undertaking is through
its interest in a coal project situated in the Waterberg region of the
Limpopo Province, South Africa (the Waterberg Project). The interests in
the Waterberg Project are ultimately held via a joint venture structure;
which is governed in accordance with the terms and conditions of the joint
venture under the laws of South Africa. The Waterberg Project’s mining and
prospecting rights must comply with the South African Minerals and
Petroleum Resources Development Act 28 of 2002 which is regulated by
Department of Mineral Resources.    In order to maintain the value of the
investment in the Waterberg Project, the Company is focussed on achieving a
financing solution that provides for not only keeping the Rights in good
standing, but also restoration of shareholder value through raising
sufficient funding not only for the Company but ultimately for the
Waterberg Project’s development.
It is a well-publicised fact that the coal market has suffered a serious
degradation in pricing over the last few years. As a result, this has made
the development of the Waterberg Project and raising ongoing funding
difficult to say the least. Nonetheless, the Company believes the insitu
value of the Waterberg Project is significant and, with a view to capturing
this value and restoring value to shareholders, continues to look for an
optimal solution in terms of the Waterberg Project and the Company’s
interest in same.
As at today’s   date,   the   Company’s   discussions   on   the   Recapitalisation
include:
-    Discussions with AME International Limited (AME) continue with respect
     to the Recapitalisation and provision of working capital for advancing
     the Waterberg Project.   As advised in the Quarterly Report, AME has
     entered into a term sheet with Sekoko Coal (Pty) Ltd (Sekoko), the
     South African registered company which holds the Assets which form the
     Waterberg Project.      The Term sheet is for a proposed share
     subscription (Subscription) in Sekoko with a view to AME acquiring a
     20% interest in Sekoko.      The Company, through its wholly owned
     subsidiary Ariona Company SA, has a 25% shareholding in Sekoko; which
     ultimately reflects a 10% interest in the Waterberg Project.     As at
     the date of this report, the legal documentation and conditions
     precedent are still under construction.
-    Discussions are also ongoing with an existing stakeholder with a view
     to concluding a short term bridging loan, of up to AU$1.8million,
     until the Recapitalisation is completed.
-    Discussions with parties interested in independent power producer
     (IPP) projects in South Africa who have indicated a willingness to
     provide funding to the Waterberg Project, predicated on developing an
     IPP project.
In addition, the Company has engaged with ESKOM senior officers to commence
negotiations for potential long term future coal supply arrangements.



Appointment of Additional Directors
Accruing from the Company’s discussions and initiatives referred to above,
and with a view to advancing the Waterberg Project’s activities, the
Company is pleased to advise the following appointments to the Board:
-    Dr Thivhilaeli Michael Rathogwa MbChB, Mmed (Anaesthesia), a South
     African national, has been appointed as a Director with immediate
     effect.    Dr Rathogwa is a medical specialist (anaesthetist) who
     practices in Polokwane, the provincial capital of the Limpopo Province
     in South Africa; being the province the Waterberg Project is located.
     In addition to Dr Rathogwa’s medical activities, he is a former
     director of Corridor Mining Resources. He also holds an Advanced
     Management   Certificate  from   Manchester  University   and  is   an
     experienced, long term resources industry investor. Dr Rathogwa has
     been associated with the Waterberg Project as an investor since the
     mid 2000s.
-    Mr Christopher Bruce Tinney, a South African national, has been
     appointed as Director with immediate effect. Mr Tinney is an Economic
     geologist by profession and has over 20 years broad investment and
     asset management experience and has managed retail funds, pension
     funds and private client money; including as founder and fund manager
     of a resources equity hedge fund, fund manager for a South African
     general equity unit trust and co-manager of a multi-billion rand
     private client equity portfolio. More recently, Mr Tinney has managed
     direct investments in African mineral projects for a Middle Eastern
     family office and a partnership in an African resources corporate
     finance joint venture. Mr Tinney is a partner of AME with whom the
     Company is collaborating with in respect to the Recapitalisation and
     Reorganisation.

Removal from the Official List of the ASX
As shareholders are aware, the Company’s securities have been in suspension
on official list of the Australian Securities Exchange (Official List)
since 16 March 2015. Given the significant nature of the Company’s efforts
to complete the Recapitalisation and the inherent challenges and
uncertainty of this activity, it has been appropriate for the securities to
remain suspended.     Whilst these activities continue and whilst the
Reorganisation is planned to occurred, a decision has been made to seek a
voluntary removal from the ASX Official List until such time as the
Recapitalisation and Reorganisation has been completed. This will, amongst
other things, save the Company considerable cost in terms of ongoing
administration fees.
It is proposed that the Company will make application to have its
securities re-admitted and reinstated to the Official List once the
activities have been completed.  In the meantime, shareholders will be
advised    off   activities  by  way   of   the   Company’s    website.
www.waterbergcoal.com.au .

Lee Boyd
Director & Company Secretary
The Waterberg Coal Company Limited
30 Aug 2016
JSE Sponsor:
The Standard Bank of South Africa Limited
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
Contact:
Mr Lee Boyd
Director and Company Secretary
Tel: +61 8 9385 0888
Or
Investor relations in South Africa:
Christo Pieterse
Tel: +27 10 594 2240             E-mail: info@waterbergcoal.com.au

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