FIRESTONE ENERGY LIMITED - Quarterly Activities Report: June 2016

Release Date: 05/08/2016 13:57
Code(s): FSE FSEO1
Wrap Text
Quarterly Activities Report: June 2016

(Incorporated in Australia)
(Registration number ABN 058 436 794)
Share code on the JSE Limited: FSE
Share code on the ASX: FSE
ISIN: AU000000FSE6
FSE01 – ISIN: AU0000FSE02
(SA company registration number 2008/023973/10)
(“FSE” or “the Company”)

5 August 2016

Quarterly Activities Report: June 2016

The Waterberg Project

Firestone Energy Limited (the Company) is a participant in the Waterberg coal project joint venture (the
Waterberg Project), situated in the Limpopo Province, South Africa. The Waterberg Project currently has
identified coal resources of 3.4 billion tonnes of coal contained within the granted mining and prospecting
rights (Appendix 1).
Accruing from the various work streams and technical studies that have been carried out to date, the
Waterberg Project now comprises the following projects:
•      The Export Project
•      The Eskom Project; and
•      The IPP Project.

During the quarter, the Company has continued to focus on engaging with prospective working capital and
project development financiers to enable the Waterberg Project to be progressed.
During March 2016 the Company announced that it was in discussions with AME International Limited (AME)
to assist in the recapitalisation of the Company’s balance sheet (Recapitalisation), and the provision of working
capital for the Company and the Waterberg Project (Transaction). Albeit somewhat drawn out, these
discussions with AME and others continue.

AME has now advised that, as part of the Transaction, it has entered into a term sheet with Sekoko Coal (Pty)
Ltd (Sekoko), a joint venture partner in the Waterberg Project and the South African registered company which
holds the prospecting and mining rights (Assets) which form the Waterberg Project. The Term sheet is for a
proposed share subscription in Sekoko with a view to AME acquiring a 20% interest in Sekoko (Subscription).
As at the date of this report, the legal documentation and conditions precedent for the Transaction are still
under construction.

The funding accruing from the Subscription is necessary to fund the operational requirements of the
Waterberg Project and its creditors. Further delays in completing the Refinancing of Sekoko may necessitate
that Sekoko apply for voluntary business rescue to enable it to continue with the restructuring and/or
refinancing in this fashion.

The Company in conjunction with its parent company The Waterberg Coal Company Ltd is in discussion with
investor parties with a view to concluding a short term bridging loan until the Recapitalisation is completed so
as to avert the above.
Given that the see through interest in the Assets is effectively the Company’s major asset and therefore
material to its future success, failure to avert business rescue for Sekoko may have similar flow on ramifications
for the Company itself.

                                  Firestone Energy Limited [ABN 71 058 436 794]
     Level 2 1 Walker Avenue West Perth WA 6005 Australia PO Box 8136 Subiaco East WA 6008 Australia
                    P: +61 8 9485 0888 F: +61 8 9485 0077...W:

Date: 05/08/2016 01:57:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

Email this JSE Sens Item to a Friend.

Share This Story