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COAL OF AFRICA LIMITED - Financial report for the half year ended 31 December 2016

Release Date: 14/03/2017 09:00
Code(s): CZA     PDF:  
Wrap Text
Financial report for the half year ended 31 December 2016

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") 

ABN 98 008 905 388

FINANCIAL REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2016

DIRECTORS' REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2016
 
The Directors of Coal of Africa Limited ("CoAL" or "the Company") submit herewith the financial report of Coal of Africa Limited
and its subsidiaries ("the Group") for the half-year ended 31 December 2016. All amounts are expressed in US Dollars unless
stated otherwise.

In order to comply with the provision of the Corporations Act 2001, the directors report as follows:

Directors

The names of the directors of the company during or since the end of the half-year are:
 Bernard Pryor* (Chairman)                                    Thabo Mosololi*
 Andrew Mifflin*                                              Shangren Ding*
 Rudolph Torlage*                                             David Brown**
 Peter Cordin*                                                De Wet Schutte**
 Khomotso Mosehla*

*  - Non-executive director
** - Executive director

Shangren Ding was appointed in October 2016. All other directors held office during and since the end of the previous financial
year.

Review of Operations

Principal activity and nature of operations

The principal activity of the Company and its subsidiaries is the exploration and development of coking and thermal coal
properties in South Africa.

The Company's principal coking and thermal coal assets and projects include:

- The Vele Colliery, on care and maintenance, a coking and thermal colliery;
- The Makhado Project, a coking and thermal coal project;
- Four exploration stage coking and thermal coal projects, namely Chapudi, Generaal, Telema & Gray and Mopane, in the
  Soutpansberg Coalfield (the GSP project); and
- The Mooiplaats Colliery currently on care and maintenance and subject to a formal sale process.

The Company's focus on safety continued and no lost time incidents ("LTIs") were recorded during the six months 
(FY2016 H1: nil).

Vele Colliery - Limpopo (Tuli) Coalfield (100% owned)

The Vele coking and thermal coal colliery ("Vele Colliery") recorded no LTIs during the period.

The original Vele Colliery Integrated Water Usage Licence ("IWUL") was renewed in January 2016 for a further 20 years, and
also amended in line with the requirements for the Plant Modification Project (PMP) at the Colliery.

In January 2017, the South African Department of Mineral Resources ("DMR") granted an Environmental Authorisation in terms
of the National Environmental Management Act ("NEMA") (Act 107 of 1998) and the Environmental Impact Assessment
Regulations (2014) for Vele Colliery for stream diversion and associated infrastructural activities.

CoAL awaits the approval of an IWUL from the Department of Water and Sanitation ("DWS") which is the final regulatory
approval required for the stream diversion in respect of the future mine work plan.

Makhado Coking Coal Project (100% owned)

As required under South African mining legislation, a minimum 26% black economic empowerment ("BEE") shareholding is
required for mining and exploration projects. CoAL previously signed a Memorandum of Agreement to enable a Broad Based
Black Economic Empowerment consortium comprising seven local communities to acquire a 20% interest in the Makhado
Project and the Company has identified suitable BEE shareholders to acquire a further 6% interest in the project. These
transactions were formalised in the prior year and will ensure that the Makhado Project has the requisite ownership structure.

The NOMR for the Makhado Project was granted in May 2015 as well as a section 11 approval for the transfer of the right to
CoAL's subsidiary, Baobab Mining. The Company was granted the IWUL in January 2016 for the period equal to life of mine.
The Company completed a Definitive Feasibility Study ("DFS") for Makhado during FY2013 which indicates that the project
has 344.8 million mineable tonnes in situ and a 16 year life of mine. The opencast project is expected to produce 12.6Mtpa of
ROM coal yielding 2.3Mtpa of hard coking coal and 3.2Mtpa of thermal coal for domestic and export markets. The Makhado
project finalised the FEED during the prior financial year.

An interim court interdict seeking to halt any mining or construction activity was issued against CoAL during the second quarter
of the 2014 financial year. The condition compelling CoAL to conduct a Strategic Regional Impact Assessment has been set
aside. The interim interdict against the Environmental Authorisation remains in place pending the review of the authorisation. 

The Company was granted an IWUL for a period of 20 years but was automatically suspended following an appeal to the DWS
submitted by the Vhembe Mineral Resources forum and other parties.

Once regulatory approvals and funding is in place, the company will seek to commence construction in calendar year 2018,
subject to board approval.

Greater Soutpansberg Project (MbeuYashu) (74% owned)

The MbeuYashu Project recorded no LTIs during the period.

Mooiplaats Colliery - Ermelo Coalfield (74% owned)

The Mooiplaats thermal coal colliery was placed on care and maintenance during the September 2013 quarter and recorded
no LTIs during the period (FY2016 H1: nil).

During the period the Company continued discussions with potential purchasers and is assessing options regarding a
transaction at the colliery.

Corporate

Baobab Mining and Exploration (Proprietary) Limited ("Baobab")
The Company entered into a non-binding Memorandum of Understanding ("MOU"), in the prior period, with Qingdao Hengshun
Zhongsheng Group Co Ltd ("Hengshun") with respect to a proposed equity investment in Baobab, a subsidiary of CoAL.
Baobab is the legal owner of the mining right for the Makhado Project. Hengshun is an industrial conglomerate incorporated in
Qingdao, Shandong Province, China and listed on the Shenzen Stock Exchange.

As the Company has been focusing on the acquisition of a cash generating asset and the repayment of the final legacy issues,
there has been no progression of the MOU.

Yishun Brightrise Investment PTE Limited ("Yishun")

In September 2015, the Company and Yishun entered into a Loan Agreement in terms of which Yishun has agreed to lend the
Company $10 million. The loan bears no interest and is repayable in certain circumstances.

During May 2016, the Company and Yishun amended the terms of the Loan to specify the conditions that would trigger the
repayment of the Loan. The long stop date for the conditions was agreed as 31 December 2016 and if none of these trigger
events occurred prior to the long stop date then the Loan would become convertible to equity. None of the trigger events have
occurred and the Company will now convert the Loan to equity at the agreed price of $0.04081 per share.

The total amount of Conversion Shares will amount to 245,037,980 and the conversion into equity will occur in two tranches. 
The first tranche of 240,042,603 shares has taken place under the general placement authority according to the ASX Listing 
rule 7.1 and the second tranche of 4,995,378 shares will be converted into equity once the general placement authority has 
been replenished by shareholders at the Annual General Meeting ("AGM"). Post the issue of both tranches of the Conversion 
Shares Yishun will have a shareholding of 428,269,241 ordinary shares equating to a 19.28% shareholding of the Company. 
Yishun will have the right to nominate an independent director to the Board of CoAL.
 
Financial review

The loss for the six months under review was $12.97 million or 0.68 cents per share compared to a loss of $14.3 million,
or 0.77 cents per share for the prior corresponding period.

The loss for the period under review of $12.97 million (H1 2015: $14.3 million) includes:

- net foreign exchange gain of $2.9 million (2015: loss of $9.4 million) arising from the translation of inter-group loan
  balances, borrowings and cash due to changes in the ZAR:USD and AUD:USD exchange rates during the period;
- employee benefit expense of $2.5 million (2015 expense: $2.0 million)
- other expenses of $2.3 million (2015: $3.2 million)
- an impairment of $10.6 million was recognized on the intangible asset due to the Company deciding not to renew its
  agreement with Terminal de Carvao da Matola ("TCM") which granted the Company port capacity through the Matola
  terminal until 2028.
- depreciation of $0.2 million (2015: $0.2 million) and amortisation of NIL (2015: $0.4 million).

As at 31 December 2016, the Company had cash and cash equivalents of $7.0 million compared to cash and cash equivalents
of $19.5 million at 30 June 2016.

Authorised and issued share capital
CoAL had 1,927,001,328 fully paid ordinary shares in issue as at 31 December 2016. The holders of ordinary shares are
entitled to one vote per share and are entitled to receive dividends when declared.

Dividends
No dividends were declared or paid during the six months.

Highlights and events after the reporting period

M&G INVESTMENT MANAGEMENT LIMITED SHARE PLACEMENT

On 8 February 2017, 49,007,596 CoAL shares were issued to the company's shareholder M&G Investment Management
Limited at a price of $4.081 cents per share in terms of the subscription agreement entered into between the Company and
M&G to raise $2 million for working capital purposes.

YISHUN LOAN CONVERSION TO EQUITY

Refer above for details of the Yishun loan conversion.

TEN MILLION DOLLAR INVESTMENT

The Company entered into an agreement with an external party to raise $10 million via the issuance of new equity, which is
subject to shareholder approval. The use of these funds is restricted until 31 March 2017. However if certain conditions
precedent are not met by this date the funds can be used at the Company's discretion subsequent to receipt of shareholder
approval, and become unrestricted.

Rounding off of amounts

The Company is a company of the kind referred to in ASIC Class Order 98/100, date 10 July 1998, and in accordance with
that Class Order amounts in the directors' report and the half-year financial report are rounded off to the nearest thousand
dollars, unless otherwise indicated.

Auditor's Independence Declaration
The auditor's independence declaration is included on page 25 of the half-year report.

The half-year report, which has been approved on the going concern basis, was approved by the
board on 14 March 2017 and was signed on its behalf by:

Bernard Robert Pryor                                          David Hugh Brown
Chairman                                                      Chief Executive Officer
14 March 2017                                                 14 March 2017


Dated at Johannesburg, South Africa, this 14th day of March 2017.

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
FOR THE HALF-YEAR ENDED 31 DECEMBER 2016
 
                                                                                        Six months       Six months
                                                                                             ended            ended
                                                                                       31 Dec 2016      31 Dec 2015
                                                                       Note                  $'000            $'000
 
Continuing operations 
Revenue                                                                                          -                -
Cost of sales                                                                                    -                -
Gross profit                                                                                     -                -

Depreciation and amortisation                                                                (168)            (614)
Foreign exchange profit /(loss)                                           4                  2,912          (9,369)
Impairment of intangible asset                                            8               (10,620)                -
Employee benefits expense                                                                  (2,541)          (2,036)
Other expenses                                                            4                (2,250)          (3,168)
Operating lease expenses                                                                      (97)             (97)
Other income                                                                                   254              335
Operating loss                                                                            (12,510)         (14,949)
Interest income                                                                                149              327
Finance costs                                                                                (595)            (384)
Loss before tax                                                                           (12,956)         (15,006)
Income tax credit                                                                              148            1,067
Net loss for the period from continuing operations                                        (12,808)         (13,939)
Operations held for sale
Loss for the period from operations held for sale                         5                  (159)            (386)
LOSS AFTER TAX                                                                            (12,967)         (14,325)

Other comprehensive loss, net of income tax

Items that may be reclassified subsequently to profit or loss
Exchange differences on translating foreign operations                                       8,422        (39,693)
Total comprehensive loss for the period                                                    (4,545)        (54,018)

Loss for the period attributable to:
   Owners of the parent                                                                   (12,967)        (14,325)
   Non-controlling interests                                                                     -               -
                                                                                          (12,967)        (14,325)

Total comprehensive loss attributable to:
   Owners of the parent                                                                    (4,545)        (54,018)
   Non-controlling interests                                                                     -               -
                                                                                           (4,545)        (54,018)

Loss per share                                                           13
From continuing operations and operations held for sale
   Basic (cents per share)                                                                    0.68            0.77
   Diluted (cents per share)                                                                   N/A            0.76

From continuing operations
   Basic (cents per share)                                                                    0.67            0.75
   Diluted (cents per share                                                                    N/A            0.74

The accompanying notes are an integral part of these condensed consolidated financial statements


CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2016

                                                                                       31 Dec 2016    30 June 2016
                                                                       Note                  $'000           $'000
 
ASSETS 
Non-current assets 
 Development, exploration and evaluation assets                           7                219,193         207,923
 Property, plant and equipment                                                               7,229           6,755
 Intangible assets                                                        8                      -          10,489
 Other receivables                                                                             773           1,013
 Other financial assets                                                                      8,224           7,033
 Restricted cash                                                          9                    267             249
 Deferred tax assets                                                                         5,275           4,773
Total non-current assets                                                                   240,961         238,235
  
Current assets  
 Inventories                                                                                     3               5
 Trade and other receivables                                                                 1,011             666
 Other financial assets                                                                        187             188
 Cash and cash equivalents                                                9                  7,012          19,502
                                                                                             8,213          20,361
Assets classified as held for sale                                        5                 15,637          14,567
Total current assets                                                                        23,850          34,928
 
Total assets                                                                               264,811         273,163
 
LIABILITIES 
Non-current liabilities 
  Deferred consideration                                                 10                      -               -
  Provisions                                                                                 6,179           4,003
Total non-current liabilities                                                                6,179           4,003
 
Current liabilities 
 Deferred consideration                                                  10                 10,309          16,016
 Trade and other payables                                                                    2,129           2,323
 Borrowings                                                              11                 10,000          10,000
 Provisions                                                                                    419             398
 Current tax liabilities                                                                     1,208           1,249
                                                                                            24,065          29,986
Liabilities associated with assets held for sale                          8                  2,613           2,732
Total current liabilities                                                                   26,678          32,718
 
Total liabilities                                                                           32,857          36,721
NET ASSETS                                                                                 231,954         236,442
 
EQUITY 
Issued capital                                                           12              1,006,435       1,006,435
Accumulated deficit                                                                      (749,370)       (736,403)
Reserves                                                                                  (25,686)        (34,165)
Equity attributable to owners of the parent                                                231,379         235,867
Non-controlling interests                                                                      575             575
TOTAL EQUITY                                                                               231,954         236,442

The accompanying notes are an integral part of these condensed consolidated financial statements


CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE HALF-YEAR ENDED 31 DECEMBER 2016

                                                               Issued       Accumulated          Share         Capital       Foreign     Attributable          Non-        Total
                                                              capital           deficit          based         profits      currency     to owners of   controlling       equity
                                                                                               payment         reserve   translation       the parent     interests 
                                                                                               reserve                       reserve 
                                                                $'000             $'000          $'000           $'000         $'000            $'000         $'000        $'000
 
Balance at 1 July 2016                                      1,006,435         (736,403)          2,274              91      (36,530)          235,867           575      236,442
Total comprehensive loss for the period                             -          (12,967)              -               -         8,422          (4,545)             -      (4,545)
Loss for the period - continuing operations                         -          (12,808)              -               -             -         (12,808)             -     (12,808)
Loss for the period - operations held for sale                      -             (159)              -               -             -            (159)             -        (159)
Other comprehensive loss, net of tax                                -                 -              -               -         8,422            8,422             -        8,422
 
  
Share based payments                                                -                 -            174               -             -              174             -          174
Share options cancelled or forfeited                                -                 -          (117)               -             -            (117)             -        (117)
Share options expired                                               -                 -              -               -             -                -             -            -
Balance at 31 December 2016                                 1,006,435         (749,370)          2,331              91      (28,108)          231,379           575      231,954

Balance at 1 July 2015                                        992,374         (718,081)          7,205              91       (7,609)          273,980           575      274,555
Total comprehensive loss for the period                             -          (14,325)              -               -      (39,693)         (54,018)             -     (54,018)
Loss for the period - continuing operations                         -          (13,939)              -               -             -         (13,939)             -     (13,939)
Loss for the period - operations held for sale                      -             (386)              -               -             -            (386)             -        (386)
Other comprehensive loss, net of tax                                -                 -              -               -      (39,693)         (39,693)             -     (39,693)


Shares issued for capital raising                              14,895                 -              -               -             -           14,895             -       14,895
Share issue costs                                               (832)                 -              -               -             -            (832)             -        (832)
Share based payments                                                -                 -            154               -             -              154             -          154
Share options cancelled or lapsed                                   -                 -           (82)               -             -             (82)             -         (82)
Share options expired                                               -             2,448        (2,448)               -             -                -             -            -
Balance at 31 December 2015                                 1,006,437         (729,958)          4,829              91      (47,302)          234,097           575      234,672

The accompanying notes are an integral part of these condensed consolidated financial statements


CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE HALF-YEAR ENDED 31 DECEMBER 2016
                                                                                      Six months         Six months
                                                                                           ended              ended
                                                                                     31 Dec 2016        31 Dec 2015
                                                                                           $'000              $'000

Cash Flows from Operating Activities
Receipts from customers                                                                       73                124
Payments to employees and suppliers                                                      (5,300)            (5,565)
Cash used in operations                                                                  (5,227)            (5,441)
Interest received                                                                            214                327
Interest paid                                                                               (14)              (384)
Net cash used in operating activities                                                    (5,027)            (5,498)

Cash Flows from Investing Activities
Purchase of property, plant and equipment                                                  (179)               (75)
Proceeds on disposal of property plant and equipment                                           -                 32
Payments for exploration and evaluation assets                                             (314)              (143)
Increase in other financial assets                                                         (703)            (3,000)
Payments for development assets                                                                -               (14)
 Net cash used in investing activities                                                   (1,196)            (3,200)

Cash Flows from Financing Activities
Proceeds from the issue of shares and options                                                  -             14,541
Share issuance costs                                                                           -              (832)
Repayment of deferred consideration                                                      (6,274)              (992)
Proceeds from borrowings                                                                       -             10,000
Net cash (used in)/generated from financing activities                                   (6,274)             22,717



NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS                                    (12,497)             14,019
Cash and cash equivalents at the beginning of the half-year                               19,742             17,759
Foreign exchange differences                                                                  39            (1,753)
Cash and cash equivalents at the end of the half-year                      9               7,284             30,025

The accompanying notes are an integral part of these condensed consolidated financial statements


NOTES TO THE CONDENSED CONSOLIDATED HALF-YEAR REPORT
FOR THE HALF-YEAR ENDED 31 DECEMBER 2016

1.   SIGNIFICANT ACCOUNTING POLICIES

     Statement of compliance

     The half-year financial report is a general purpose financial report prepared in accordance with the Corporations Act
     2001 and AASB 134: 'Interim Financial Reporting'. Compliance with AASB 134 ensures compliance with International
     Financial Reporting Standard IAS 34 'Interim Financial Reporting'. The half-year report does not include notes of the
     type normally included in an annual financial report and should be read in conjunction with the most recent annual
     financial report.

     Basis of preparation

     The condensed consolidated financial statements have been prepared on the basis of historical cost, except for the
     revaluation of financial instruments and assets held for sale. Cost is based on the fair values of the consideration given
     in exchange for assets.

     All amounts are presented in United States dollars, unless otherwise noted.

     The company is a company of the kind referred to in ASIC Class Order 98/100, dated 10 July 1998, and in accordance
     with that Class Order amounts in the directors' report and the half-year financial report are rounded off to the nearest
     thousand dollars, unless otherwise indicated.

     The accounting policies and methods of computation adopted in the preparation of the half-year financial report are
     consistent with those adopted and disclosed in the company's 2016 annual financial report for the financial year ended
     30 June 2016, except for the impact of the Standard and Interpretations described below. These accounting policies are
     consistent with the Australian Accounting Standards and with International Financial Reporting Standards ("IFRS").

     The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting
     Standards Board ("the AASB") that are relevant to their operations and effective for the current reporting period.

     New and revised Standards and amendments thereof and Interpretations effective for the current half-year that are
     relevant to the Group include:

     - AASB 2014-3 Amendments to Australian Accounting Standards -Accounting for Acquisitions of Interest in Joint
       operations
     - AASB 2014-4 Amendments to Australian Accounting Standards -Clarification of Acceptable Methods of Depreciation
       and Amortisation
     - AASB 2015-1 Amendments to Australian Accounting Standards - Annual Improvements to Australian Accounting
       Standards 2012-2014 Cycle
     - AASB 2015-2 Amendments to Australian Accounting Standards - Disclosure Initiative: Amendments to AASB 101


     The application of these amendments does not have any material impact on the disclosures or the amounts recognised
     in the Group's consolidated financial statements.

2.   GOING CONCERN

     The half year financial statements have been prepared on the going concern basis, which contemplates the continuity
     of normal business activities and the realisation of assets and the settlement of liabilities in the normal course of
     business.

     The Consolidated Entity has incurred a net loss after tax for the half year ended 31 December 2016 of $12.97 million
     (31 December 2015: loss of $14.3 million), which included a foreign exchange gain of $2.9 million, depreciation charges
     of $0.2 million and an impairment charge of $10.6 million relating to intangible assets.

     During the six month period ended 31 December 2016 net cash outflows from operating activities were $5.0 million 
     (31 December 2015 net outflow: $5.5 million), net cash outflows from investing activities were $1.2 million (31 December 2015 
     net outflow: $3.2 million) and net cash outflows from financing activities were $6.3 million (31 December 2015 net
     inflow: $22.7 million). As at 31 December 2016 the Consolidated Entity had a net current liability position of $15.9 million
     (30 June 2016: net current liability of $9.6 million), excluding assets and liabilities associated with assets held for sale.

     The current liability position as at 31 December 2016 is primarily a result of deferred consideration payment totalling
     $10.3 million due by the Company to Rio Tinto Minerals Development Limited agreed upon monthly repayments of $0.65
     million, an additional payment of $0.25 million in March 2017, an additional payment of $0.15 million in April 2017 and
     a final payment of $6.95 million (refer note 10) by 15 June 2017, combined with borrowings of $10 million due to Yishun
     Brightrise Investment PTE Limited ("Yishun"), which was only due for repayment under limited circumstances.

     The directors have prepared a cash flow forecast for the period ending 30 June 2018, which indicates that the
     consolidated entity will have sufficient cash flow to fund its operations for at least the twelve month period from the date
     of signing this report, which has been based on the following assumptions:

         a)   Conversion of the $10 million loan from Yishun Brightrise Investment PTE Limited ("YBI") into equity. As
              announced on 17 February 2017, the Company has received notice from YBI requesting the conversion of the
              loan into ordinary share capital, and therefore no cash settlement will occur.

         b)   On 8 February 2017, 49,007,596 CoAL shares were issued to the company's shareholder M&G Investment
              Management Limited at a price of $4.081 cents per share in terms of the subscription agreement entered into
              between the Company and M&G to raise $2 million for working capital purposes.

         c)   The Company has entered into an agreement with an external party to raise $10 million via the issuance of
              new equity, which is subject to shareholder approval. The use of these funds is restricted until 31 March
              2017. However if certain conditions precedent are not met by this date the funds can be used at the Company's
              discretion subsequent to receipt of shareholder approval, and become unrestricted.

         d)   Excluding the funding related matters noted in points (a) - (c) above, at the date of approval of the financial
              statements, the Consolidated Entity has received commitments for funding in excess of $18 million, which it is
              considering as part of an overall analysis of funding options.

         e)   Conclusion of the sale of the Mooiplaats Colliery and Holfontein Thermal Coal Project, which are classified as
              held for sale at 31 December 2016, and are expected to complete within 12 months of the reporting date (refer
              to note 5 for further details).

     The Directors believe that at the date of signing the financial statements there are reasonable grounds to believe that
     they will be successful in achieving the matters set out above and that the Consolidated Entity will have sufficient funds
     to meet its obligations as and when they fall due, and are of the opinion that the use of the going concern basis remains
     appropriate.

3.   SEGMENT INFORMATION

     AASB 8 requires operating segments to be identified on the basis of internal reports about components of the Group
     that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to
     assess its performance.

     Information reported to the Group's Chief Executive Officer ("CEO") for the purposes of resource allocation and
     assessment of performance is more specifically focused on the stage within the mining pipeline that the operation finds
     itself in. During the period, the CEO determined that it was more appropriate to review the operating results of the
     identified segments and make decisions about resources to be allocated to the segment and assess its performance
     from an entity perspective rather than a consolidated perspective. Accordingly, the presentation of the information has
     changed from the prior period for total assets. The prior period total assets have been restated to reflect the change.

     The Group's reportable segments under AASB 8 are therefore as follows:
     - Exploration;
     - Development;
     - Mining (operations held for sale)

     The Exploration segment is involved in the search for resources suitable for commercial exploitation, and the
     determination of the technical feasibility and commercial viability of resources. As at 31 December 2016, projects within
     this reportable segment include exploration stage coking and thermal coal complexes, namely:
     
     - four exploration stage coking and thermal coal projects, namely Chapudi, Generaal, Mopane and Telema & Gray;
     - the Makhado Project.
     
     The Development segment is engaged in establishing access to and commissioning facilities to extract, treat and
     transport production from the mineral reserve, and other preparations for commercial production. As at 31 December
     2016 projects included within this reportable segment include the Vele Colliery, in the early operational and development
     stage.

     The Mining segment is involved in day to day activities of obtaining a saleable product from the mineral reserve on a
     commercial scale and consists of the Mooiplaats Colliery. As of 30 June 2014, the Mooiplaats Colliery has been
     classified as operations held for sale.

     The Group evaluates performance on the basis of segment profitability, which represents net operating (loss) / profit
     earned by each reportable segment.
     
     Each reportable segment is managed separately because, amongst other things, each reportable segment has
     substantially different risks.

     The Group accounts for intersegment sales and transfers as if the sales or transfers were to third parties, i.e. at current
     market prices.
     
     The Group's reportable segments focus on the stage of project development and the product offerings of coal mines in
     production.
     
     In order to reconcile the segment results with the consolidated statement of profit or loss and other comprehensive
     income the operations held for sale should be deducted from the segment total and the corporate results (as per the
     reconciliation later in the note should be included).

     The following is an analysis of the Group's results by reportable operating segment for the period under review:
     
     For the six months ended 31 December 2016

                                       Continuing operations             Operations
                                                                      held for sale
                                      Exploration     Development            Mining          Total
     Revenue                                    -               -                 -              -
     Cost of sales                              -               -                 -              -
     Gross loss                                 -               -                 -              -
     Depreciation and amortisation           (33)            (19)                 -           (52)
     Foreign exchange gain                  1,076               -                 -          1,076
     Employee benefits expense               (60)           (160)             (144)          (364)
     Other expenses                          (90)           (384)              (84)          (558)
     Operating lease expenses                 (3)               -               (8)           (11)
     Other income                               -              33                12             45
     Operating profit / (loss )               890           (530)             (224)            136
     Interest income                            -               7                65             72
     Finance costs                          (534)            (59)                 -          (593)
     Profit/(loss) before tax                 356           (582)             (159)          (385)

     For the six months ended 31 December 2015
                                       Continuing operations             Operations
                                                                      held for sale
                                      Exploration     Development            Mining          Total
     Revenue                                    -               -                 -              -
     Cost of sales                              -               -                 -              -
     Gross loss                                 -               -                 -              -
     Depreciation and amortisation            (34)           (24)                 -           (58)
     Foreign exchange loss                 (4,635)              -                 2        (4,633)
     Employee benefits expense                (53)          (174)             (142)          (369)
     Other expenses                          (188)          (530)             (271)          (989)
     Operating lease expenses                  (8)              -               (8)           (16)
     Other income                               -               1                 2              3
     Operating loss                        (4,918)          (727)             (417)        (6,062)
     Interest income                            -               -                32             32
     Finance costs                           (383)              -               (1)          (384)
     Loss before tax                       (5,301)          (727)             (386)        (6,414)

     The following is an analysis of the Group's assets by reportable operating segment:

                                                                        31 Dec 2016   30 June 2016
                                                                              $'000          $'000
    
     Exploration                                                            116,899        112,242
     Development                                                            116,038        105,941
     Total assets - continuing operations                                   232,937        218,183
     Mining - operations held for sale                                       15,637         14,567
     Total segment assets                                                   248,574        232,750

     Reconciliation of segment information to the consolidated financial statements:

                                                                        31 Dec 2016    31 Dec 2015
                                                                              $'000          $'000

     Total loss for reportable segments                                       (385)        (6,414)
     Depreciation and amortisation                                            (117)          (556)
     Impairment of intangible asset                                        (10,620)              -
     Foreign exchange profit/(loss)                                           1,836        (4,734)
     Employee benefits expense                                              (2,321)        (1,809)
     Other expenses                                                         (1,775)        (2,450)
     Operating lease expenses                                                  (94)             29
     Other income                                                               221            215
     Interest income                                                            143            327
     Finance costs                                                              (3)              -
     Loss for the period from operations held for sale                          159            386
     Loss before tax                                                       (12,956)       (15,006)

                                                                        31 Dec 2016   30 June 2016
                                                                              $'000          $'000

     Total segment assets                                                   248,574        232,750
     Unallocated property, plant and equipment                                1,361          3,379
     Intangible assets                                                            -         10,489
     Other financial assets                                                   6,670          5,611
     Other receivables                                                        1,279          1,013
     Unallocated current assets                                               6,927         19,921
     Total assets                                                           264,811        273,163

     The reconciling items relate to corporate assets.

4.   RESULTS FOR THE PERIOD
     Loss for the period from continuing operations has been arrived at after charging or (crediting):

                                                                        31 Dec 2016    31 Dec 2015
                                                                              $'000          $'000
     Foreign exchange profit/(loss)
     Unrealised                                                               3,009        (9,291)
     Realised                                                                  (97)           (78)
                                                                              2,912        (9,369)

     Other expenses
     Other expenses for the six months ended 31 December 2016 includes, $0.2 million (2015: $0.3 million) for environmental
     expenses, $0.4 million (2015: $0.5 million) relating to transaction costs and social labour plan costs of $0.01 million
     (2015: $0.1million).

5.   OPERATIONS HELD FOR SALE

                                                                        31 Dec 2016   30 June 2016
                                                                              $'000          $'000

     Carrying amounts of
     Holfontein Investments Proprietary Limited ('Holfontein')                    -              -
     Langcarel Proprietary Limited ('Mooiplaats')                            13,024         11,835
                                                                             13,024         11,835
     Assets associated with operations held for sale
     Holfontein                                                                   -              -
     Mooiplaats                                                              15,637         14,567
                                                                             15,637         14,567
     Liabilities associated with operations held for sale
     Holfontein                                                                   -              -
     Mooiplaats                                                               2,613          2,732
                                                                              2,613          2,732
                                                                             13,024         11,835

     Holfontein
     
     The Company is in the process of finalising agreements for the disposal of the Holfontein Thermal Coal Project near
     Secunda in Mpumalanga. The Company has received non-refundable option fees until the sale is concluded.
     
     Mooiplaats
     
     The Company has announced a long term strategy to dispose of its thermal assets in order to focus on the development
     of the coking coal assets. The Company is actively seeking a buyer for this business and expects to complete a sale
     during the next financial year. An offer has been received by the Company providing an indicative price for the disposal
     of Mooiplaats and the Company has accepted the offer. The Group has not recognised any impairment on the Mooiplaats
     Colliery during the period.

     The major classes of assets and liabilities of Mooiplaats at the end of the reporting period are as follows:

                                                                        31 Dec 2016   30 June 2016
                                                                              $'000          $'000

     Assets classified as held for sale
     Property, plant and equipment                                           15,129         14,069
     Other financial assets                                                     217            202
     Restricted cash                                                              -            219
     Inventories                                                                  1              -
     Trade and other receivables                                                 18             56
     Cash and cash equivalents                                                  272             21
                                                                             15,637         14,567
     Liabilities classified as held for sale
     Provisions                                                               2,184          2,332
     Trade payables and accrued expenses                                        429            400
                                                                              2,613          2,732
     Net assets of Mooiplaats                                                13,024         11,835

     The loss for the half-year from the discontinued operations is analysed as follows:

                                                                         Six months     Six months
                                                                              ended          ended
                                                                        31 Dec 2016    31 Dec 2015
                                                                              $'000          $'000
     Revenue                                                                      -              -
     Other gains                                                                  -              -
                                                                                  -              -
     Expenses                                                                 (159)          (386)
     Loss before tax                                                          (159)          (386)
     Loss for the period from operations held for sale 
     (attributable to owners of the parent)                                   (159)          (386)

     Cash flows from discontinued operations held for sale
     Net cash outflows from operating activities                              (426)          (410)
     Net cash outflows from investing activities                               (72)          (274)
     Net cash inflows from financing activities                                 513            638
     Net cash outflows                                                           15           (46)

6.   DIVIDENDS

     No dividend has been paid or is proposed in respect of the half-year ended 31 December 2016 (2015: Nil).

7.   DEVELOPMENT, EXPLORATION AND EVALUATION ASSETS
                                                                        31 Dec 2016   30 June 2016
                                                                              $'000          $'000

     Development, exploration and evaluation assets comprise:

     Exploration and evaluation assets                                      108,998        104,893
     Development expenditure                                                110,195        103,030
     Balance at end of period                                               219,193        207,923


     A reconciliation of development, exploration and evaluation assets is presented below:
     Exploration and evaluation assets
                                                                        31 Dec 2016   30 June 2016
                                                                              $'000          $'000

     Balance at beginning of period                                         104,893        118,498
     Additions                                                                  312          1,187
     Adjustment to rehabilitation asset                                        (35)           (18)
     Foreign exchange differences                                             3,828       (14,774)
     Balance at end of period                                               108,998        104,893

     Development assets

     Balance at beginning of period                                         103,030        114,315
     Additions                                                                    4              -
     Transfer from property, plant and equipment                                  -          6,501
     Adjustment to rehabilitation asset                                       1,867          (167)
     Deferred tax asset                                                           -        (1,488)
     Foreign exchange differences                                             5,294       (16,131)
     Balance at end of period                                               110,195        103,030

 
     As of 31 December 2016 the net book value of the following project assets were included in Development assets:

     -   Vele Colliery: $110.2 million

     In terms of AASB 136 - Impairment of Assets management have identified no indicators that the Vele assets may be
     impaired and have not performed a formal impairment assessment as at 31 December 2016.

8.   INTANGIBLE ASSETS

     In August 2008 the Company entered into a throughput agreement with Terminal de Carvao da Matola ("TCM"), a
     subsidiary of Grindrod, the operator of the Matola Terminal, and CMR Engineers & Project Managers Proprietary Limited.

     This agreement granted the Company one mtpa of port capacity through the Matola terminal commencing 1 January
     2009, for an initial term of five years. This capacity was increased to approximately three mtpa in March 2011 and the
     Company had the right to renew the agreement (subject to certain conditions) at the end of the initial term, for further
     periods of 3 successive periods of 5 years each for a total of 15 years.

     During the 2015 financial year the Company reached an agreement with Grindrod to settle the current liabilities to date
     as well as cover all future take or pay obligations until 31 December 2016. CoAL decided not to renew the take or pay
     obligation beyond 31 December 2016 to avoid any further liabilities until production can be forecast with certainty, and
     as a result impaired the intangible asset.

     New terms can be negotiated if required to facilitate any production by its Vele Colliery and Makhado Project.

9.   CASH AND CASH EQUIVALENTS
                                                                                             31 Dec 2016       30 Jun 2016
                                                                                                   $'000             $'000
     Bank balances                                                                                 7,012            19,502
     Bank balances associated with discontinued operations (refer Note 5)                            272                21
                                                                                                   7,284            19,523

     Restricted cash                                                                                 267               249
     Restricted cash associated with discontinued operations (refer Note 5)                            -               219
                                                                                                     267               468

10.  DEFERRED CONSIDERATION

     The deferred consideration relates to the second tranche (part of the total acquisition price of $75 million for Chapudi and
     Kwezi) of $30 million payable to Rio Tinto. The Company is required to make a minimum payment of $650,000 plus
     interest per month as well as additional committed money on the sale of non-core assets. The interest on the arrangement
     is 4%. Post 31 December 2016, it was agreed with Rio Tinto to pay an additional $0.25 million in March 2017 and an
     additional $0.15 million in April 2017. Full and final settlement of the outstanding balance plus all accrued interest is
     payable by 15 June 2017.


11.  BORROWINGS

     During the previous period, a loan for $10 million was provided to the Company by its shareholder Yishun. The loan bears
     no interest and is only repayable in limited circumstances. Subsequent to 31 December 2016, the Company received
     notice from Yishun requesting the conversion of the loan to CoAL ordinary shares. Refer to note 15 for details of the
     conversion.


12.  ISSUED CAPITAL
 
     During the reporting period, there were no shares issued.
 
                                                                                                  31 Dec 2016      30 June 2016
                                                                                                        $'000             $'000
                                                                                                    1,006,435         1,006,435
     1,927,001,328 (2015: 1,743,568,613) fully paid ordinary shares
 
     Movements in issued capital
     Opening balance                                                                                1,006,435           992,374
     Shares issued, net of costs                                                                            -            14,061
                                                                                                    1,006,435         1,006,435
 
     Fully paid ordinary shares carry one vote per share and carry the right to dividends.
 
     Options
     The following unlisted options to subscribe for ordinary fully paid shares are outstanding at 31 December 2016:
     
          Number Issued      Exercise Price                  Expiry Date
     
              2,670,000             ZAR7.60             14 February 2017
              3,932,928             ZAR1.75                 30 June 2017
            20,000,000*             ZAR1.32              21 October 2018
              5,000,000            GBP0.055             26 November 2018
 
     *     Issued to Investec as part of the short term bridging facility and vest six months after granting.
 
     During the period 10,575,000 options were cancelled.
     
     Performance Rights
     
          Number Issued          Issue Date                 Expiry Date
     
             32,373,419    27 November 2015             1 December 2018
             35,409,403    30 November 2016            29 November 2019
     
     On 30 November 2016, 35,409,403 Performance Rights were issued to senior management. During the period,
     1,075,705 Performance Rights were forfeited from the 27 November 2015 issue.

13.  LOSS PER SHARE
                                                                                                  Six months     Six months
                                                                                                       ended          ended
                                                                                                 31 Dec 2016    31 Dec 2015
13.1   Basic loss per share   
                                                                                                    Cents per      Cents per
                                                                                                        share          share
       Basic loss per share     
       From continuing operations                                                                        0.67           0.75
       From discontinued operations                                                                      0.01           0.02
                                                                                                         0.68           0.77
       
                                                                                                        $'000          $'000
       Loss for the period attributable to owners of the parent                                      (12,967)       (14,325)
       Loss for the period from operations held for sale                                                  159            386
       Loss used in the calculation of basic loss per share from continuing operations               (12,808)       (13,939)
     
                                                                                                   Six months     Six months
                                                                                                        ended          ended
                                                                                                  31 Dec 2016    31 Dec 2015
                                                                                                  '000 shares    '000 shares
       Weighted number of ordinary shares   
       Weighted average number of ordinary shares for the purposes of basic loss per share          1,896,412      1,865,824
  
13.2   Diluted loss per share
       Diluted loss per share is calculated by dividing loss attributable to owners of the Company by the weighted average
       number of ordinary shares outstanding during the year plus the weighted average number of diluted ordinary share that
       would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.
      
       As at 31 December 2016, 99,385,850 options (2015 - 78,170,637 options) were excluded from the computation of the
       loss per share as their impact is anti-dilutive. Furthermore at 30 June 2016, the TMM options had expired and is not
       included in the calculation.

13.3   Headline loss per share (In line with JSE listing requirements)
       The calculation of headline loss per share at 31 December 2016 was based on the headline loss attributable to ordinary
       equity holders of the Company of $5.4 million (2015: $14 million) and a weighted average number of ordinary shares
       outstanding during the period ended 31 December 2016 of 1,896,412,421 (2015: 1,865,823,514).
 
       The adjustments made to arrive at the headline loss are as follows:
                                                                                                  Six months     Six months
                                                                                                       ended          ended
                                                                                                 31 Dec 2016    31 Dec 2015
                                                                                                       $'000          $'000
                          
       Loss for the period attributable to ordinary shareholders                                      12,967         14,325
       Adjust for:                   
       Impairment losses                                                                            (10,620)          (358)
       Headline earnings                                                                               2,347         13,967
                         
       Headline loss per share (cents per share)                                                        0.12           0.75
                   
14.  CONTINGENCIES AND COMMITTMENTS

     The Group has contingent liabilities as listed below:

     Ferret Mining Proprietary Limited

     During the 2015 financial year, Ferret's 26% shareholding in Mooiplaats Mining Limited was re-instated. Although they
     are not entitled to any assets or claims in the Mooiplaats group, they are entitled to receive ZAR15.0 million ($1.1 million)
     upon the successful disposal of the Mooiplaats Colliery. This has been taken into account in determining the fair value
     less costs to sell of the Mooiplaats Colliery.

     Makhado Water Commitment

     CoAL has agreed to acquire water allocation for the Makhado Project from water users situated near the proposed
     colliery and the Company has undertaken to increase supply assurance without impacting negatively on the water
     available for agriculture. The parties have in principle agreed to avoid endangering local agriculture by creating new
     water, primarily by reducing losses, improving distribution and countering leakages and evaporation. The creation of
     new water will be financed either through CoAL's funds, outside funding or a Public-Private-Partnership with one or more
     organs of State or other appropriate entities.

     The overall objective is the co-existence of mining and agriculture and includes a feasibility study and the completion of
     projects identified in the study which will facilitate the creation of new water. In terms of the agreement, the Company
     will be required to pay a total of $7.9 million. The first payments of $1.8 million are due 90 and 180 days after the granting
     of the IWUL, a further $0.6 million is payable eight months after the IWUL is granted and the balance within five years
     of the granting.
 
     Commitments

     In addition to the commitments of the parent entity, subsidiary companies have financial commitments in terms of the
     NOMR granted by the South African DMR. The commitments are based on the revenue generated by the colliery during
     the financial year, and/or quantities of coal sold by the colliery during the financial year.

     There are no other significant contingent liabilities as at 31 December 2016.

15.  EVENTS SUBSEQUENT TO REPORTING DATE
 
     M&G INVESTMENT MANAGEMENT LIMITED SHARE PLACEMENT
 
     On 8 February 2017, 49,007,596 CoAL shares were issued to the company's shareholder M&G Investment Management
     Limited at a price of $4.081 cents per share in terms of the subscription agreement entered into between the Company
     and M&G to raise $2 million for working capital purposes.
 
     YISHUN LOAN CONVERSION TO EQUITY
 
     On 16 February 2017, the Company received notice from Yishun in terms of the amended and restated $10 million loan
     agreement between CoAL and Yishun to convert the outstanding amount in accordance with the loan agreement.
 
     During September 2015 the Company entered into a loan agreement with Yishun pursuant to which Yishun advanced
     an amount of $10 million to the Company. The loan bore no interest and only became repayable in limited circumstances.
 
     During May 2016 the Company and Yishun amended the terms of the Loan to specify the conditions that would trigger
     the repayment of the loan. The long stop date for the conditions was agreed as 31 December 2016 and if none of these
     trigger events occurred prior to the long stop date then the loan would become convertible to equity. None of the trigger
     events have been effected and the Company will now convert the loan to equity at the agreed price of $0.04081 per
     share.
 
     The total amount of Conversion Shares will amount to 245,037,980 and the conversion into equity will occur in two tranches. 
     The first tranche of 240,042,603 shares has taken place under the general placement authority according to the ASX Listing 
     rule 7.1 and the second tranche of 4,995,378 shares will be converted into equity once the general placement authority has 
     been replenished by shareholders at the Annual General Meeting ("AGM"). Post the issue of both tranches of the Conversion 
     Shares YBI will have a shareholding of 428,269,241 ordinary shares equating to a 19.28% shareholding of the Company.
 
     TEN MILLION DOLLAR INVESTMENT
 
     The Company entered into an agreement with an external party to raise $10 million via the issuance of new equity,
     which is subject to shareholder approval. The use of these funds is restricted until 31 March 2017. However if certain
     conditions precedent are not met by this date the funds can be used at the Company's discretion subsequent to receipt
     of shareholder approval, and become unrestricted.
 
16.  KEY MANAGEMENT PERSONNEL

     Remuneration arrangement of key management personnel are disclosed in the annual financial report.
 
17.  FINANCIAL INSTRUMENTS

     This note provides information about how the Group determines fair values of various financial assets and financial
     liabilities.

     16.1 Fair value of the Group's financial assets and financial liabilities that are measure at fair value on a recurring basis

     Some of the Group's financial assets and financial liabilities are measured at fair value at the end of each reporting
     period. The following table gives information about how the fair values of these financial assets and financial liabilities
     are determined (in particular, the valuation technique(s) and inputs used).

                                31 Dec      30 Jun
                                  2016        2016
      
     1.   Other financial     Assets -    Assets -   Level 2   Value             N/A   N/A
          assets - Unlisted   $6.6m       $5.5m                certificate  
          Investments                                          obtained from  
                                                               investment  
                                                               institution  
        
     2.   Other financial     Assets -    Assets -   Level 1   Quoted prices     N/A   N/A
          assets - Listed        $0.2m       $0.2m             in an active  
          Investments                                          market  
     
 
     The Directors declare that in the directors' opinion,

     1.      The condensed financial statements and notes of the consolidated entity are in accordance with the
             following:


                a.      complying with accounting standards and the Corporations Act 2001; and

                b.      giving a true and fair view of the consolidated entity's financial position as at 31 December 2016 and
                        of its performance for the half-year ended on that date.


     2.      There are reasonable grounds to believe that the Company will be able to pay its debts as and when they
              become due and payable.


     This declaration is made in accordance with a resolution of the Board of Directors, made pursuant to section 303(5)
     of the Corporations Act 2001.


     On behalf of the Directors

     Bernard Robert Pryor                                         David Hugh Brown
     Chairman                                                     Chief Executive Officer
     14 March 2017                                                14 March 2017


     Dated at Johannesburg, South Africa, this 14th day of March 2017.


INDEPENDENT AUDITORS' REVIEW REPORT

Deloitte 
                                                                               Deloitte Touche Tohmatsu
                                                                               ABN 74 490 121 060

                                                                               Tower 2, Brookfield Place
                                                                               123 St Georges Terrace
                                                                               Perth WA 6000

                                                                               GPO Box A46
                                                                               Perth WA 6837 Australia

                                                                               Tel: +61 8 9365 7000
                                                                               Fax: +61 8 9365 7001
                                                                               www.deloitte.com.au

The Board of Directors
Coal of Africa Limited
Suite 8, 7 The Esplanade
Mount Pleasant WA 6153


14 March 2017


Dear Directors,

Auditor's Independence Declaration to Coal of Africa Limited

In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the
following declaration of independence to the directors of Coal of Africa Limited.
As lead audit partner for the review of the financial statements of Coal of Africa Limited for the
half year ended 31 December 2016, I declare that to the best of my knowledge and belief, there
have been no contraventions of:

    (i) the auditor independence requirements of the Corporations Act 2001 in relation to the
         review; and
    (ii) any applicable code of professional conduct in relation to the review.



Yours sincerely



DELOITTE TOUCHE TOHMATSU



David Newman
Partner
Chartered Accountants

 
                                                                               Deloitte Touche Tohmatsu
                                                                               ABN 74 490 121 060

                                                                               Tower 2, Brookfield Place
                                                                               123 St Georges Terrace
                                                                               Perth WA 6000

                                                                               GPO Box A46
                                                                               Perth WA 6837 Australia

                                                                               Tel: +61 8 9365 7000
                                                                               Fax: +61 8 9365 7001
                                                                               www.deloitte.com.au


Independent Auditor's Review Report to the
members of Coal of Africa Limited


We have reviewed the accompanying half-year financial report of Coal of Africa Limited, which
comprises the condensed statement of financial position as at 31 December 2016, the
condensed statement of profit or loss and other comprehensive income, the condensed
statement of cash flows and the condensed statement of changes in equity for the half-year
ended on that date, notes comprising a summary of significant accounting policies and other
explanatory information, and the directors' declaration of the consolidated entity comprising
the company and the entities it controlled at the end of the half-year or from time to time during
the half-year as set out on pages 8 to 24.

Directors' Responsibility for the Half-Year Financial Report

The directors of the company are responsible for the preparation of the half-year financial report
that gives a true and fair view in accordance with Australian Accounting Standards and the
Corporations Act 2001 and for such internal control as the directors determine is necessary to
enable the preparation of the half-year financial report that gives a true and fair view and is
free from material misstatement, whether due to fraud or error.


Auditor's Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our
review. We conducted our review in accordance with Auditing Standard on Review Engagements
ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity,
in order to state whether, on the basis of the procedures described, we have become aware of
any matter that makes us believe that the half-year financial report is not in accordance with
the Corporations Act 2001 including: giving a true and fair view of the consolidated entity's
financial position as at 31 December 2016 and its performance for the half-year ended on that
date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the
Corporations Regulations 2001. As the auditor of Coal of Africa Limited, ASRE 2410 requires
that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in accordance with
Australian Auditing Standards and consequently does not enable us to obtain assurance that
we would become aware of all significant matters that might be identified in an audit.
Accordingly, we do not express an audit opinion.

Auditor's Independence Declaration

In conducting our review, we have complied with the independence requirements of the
Corporations Act 2001. We confirm that the independence declaration required by the

 
Corporations Act 2001, which has been given to the directors of Coal of Africa Limited, would
be in the same terms if given to the directors as at the time of this auditor's review report.


Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that
makes us believe that the half-year financial report of Coal of Africa Limited is not in accordance
with the Corporations Act 2001, including:


(a) giving a true and fair view of the consolidated entity's financial position as at 31 December
    2016 and of its performance for the half-year ended on that date; and


(b) complying with Accounting Standard AASB 134 Interim Financial Reporting and the
    Corporations Regulations 2001.


DELOITTE TOUCHE TOHMATSU




David Newman
Partner
Chartered Accountants
Perth, 14 March 2017


CORPORATE DIRECTORY

REGISTERED OFFICE                                Suite 8, 7 The Esplanade
                                                 Mt Pleasant, Perth, WA 6153
                                                 Telephone: +61 8 9316 9100
                                                 Facsimile: +61 8 9316 5475
                                                 Email: perth@coalofafrica.com

SOUTH AFRICAN OFFICE                             South Block
                                                 Summercon Office Park
                                                 Cnr Rockery Lane and Sunset Avenue
                                                 Lonehill
                                                 Telephone: +27 10 003 8000
                                                 Facsimile: +27 11 388 8333

BOARD OF DIRECTORS                               Non-executive
                                                 Bernard Pryor (Chairman)
                                                 Andrew Mifflin
                                                 Khomotso Mosehla
                                                 Peter Cordin
                                                 Rudolph Torlage
                                                 Thabo Mosololi
                                                 Shangren Ding

                                                 Executive
                                                 David Brown
                                                 De Wet Schutte

COMPANY SECRETARY                                Tony Bevan

               AUSTRALIA                         UNITED KINGDOM                  SOUTH AFRICA
AUDITORS       Deloitte Touche Tohmatsu          N/A                             Deloitte & Touche
               Tower 2                                                           Deloitte Place
               Brookfield Place                                                  Building 1
               123 St Georges Terrace                                            The Woodlands
               Perth WA 6000                                                     20 Woodlands Drive
               Australia                                                         Woodmead 2052
                                                                                 South Africa

BANKERS        National Australia Bank Limited   Investec Bank plc               ABSA Bank
               Level 1, 1238 Hay Street          2 Gresham Street                The Podium
               West Perth WA 6005                London EC2V 7QP                 Norton Rose Building
               Australia                         United Kingdom                  15 Alice Lane
                                                                                 Sandton South Africa

               AUSTRALIA                         UNITED KINGDOM                  SOUTH AFRICA
BROKERS        Euroz Securities Limited          Mirabaud                        N/A
               Level 18, Alluvion                21 St James' Street     
               58 Mounts Bay Road                London SW1Y 4JP     
               Perth WA 6000                     United Kingdom     
               Australia            
LAWYERS        Squire Patton Boggs (AU)          Squire Patton Boggs (UK)        Edward Nathan
                                                                                 Sonnenbergs
                                                 LLP     
               Level 21                          2 Park Lane                     150 West Street
               300 Murray Street                 Leeds                           Sandton
               Perth WA 6000                     LS3 1 ES                        Johannesburg 2196
               Australia                         United Kingdom                  South Africa
               
NOMAD/         N/A                               Peel Hunt LLP                   Investec Bank Limited
CORPORATE            
                                                 Moor House                      100 Grayston Drive
SPONSOR               
                                                 120 London Wall                 Sandown 2196
                                                 London EC2Y 5ET                 Johannesburg
                                                 United Kingdom                  South Africa


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