| Thu 31 Jan 2008, 8:53 | | CZA - Coal of Africa Limited - Report for the December 2007 quarter |
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CZA
CZA
CZA - Coal of Africa Limited - Report for the December 2007 quarter
Coal of Africa Limited
(previously, "GVM Metals Limited")
(Incorporated and registered in Australia)
(Registration number ABN 008 905 388)
Share code on the JSE Limited: CZA
ISIN: AU000000CZA6
Share code on the Australian Stock Exchange Limited: CZA
ISIN: AU000000CZA6
REPORT FOR THE DECEMBER 2007 QUARTER
Highlights
* Shareholder approval obtained for the change of name from GVM Metals
Limited to Coal of Africa Limited (`CoAL`).
* Issue of 80,000,000 shares raising more than A$115 million to fund
acquisitions and development of CoAL`s projects.
* CoAL has paid an additional GBP10 million thereby increasing the
Company`s stake in the Mooiplaats Coal Project to 49%. Subject to
Section 11 consent, the Company expects to increase its stake to 70% in
the current quarter.
* Over 10,000 metres of drilling were completed during the quarter on the
Mooiplaats coal project increasing the total amount drilled on the
project to over 65,000 metres. The results of the drilling are in line
with management expectations and will be released in the current
quarter.
* Exploration expenditure for the quarter was A$5.2 million including the
payment of ZAR20 million to Exxaro Resources Limited for drilling
information for 1,200 boreholes pertaining to the Baobab Coal Project.
* Concluded an agreement to acquire six farms comprising 7,000Ha located
in the vicinity of the Baobab coal project from Sekoko Coal (Pty) Ltd.
* Finalised an agreement to acquire an area comprising 552Ha consisting
of a remaining portion of the farm Holfontein and portions of the
neighbouring farm Wildebeesfontein.
* Nimag (Pty) Ltd`s nickel magnesium alloy business continued to
experience tough trading conditions accompanied by increased
inventories due to reduced global nickel prices and demand and
generated an EBIT for the quarter of A$512k.
* Cash balance at the end of the quarter was A$117 million.
Commenting on the results today, Simon Farrell, Managing Director of CoAL,
said, `We are pleased to announce strong progress across the Company`s coal
projects. Drilling at Mooiplaats has been completed bringing the project
into the `Measured` status while negotiations with potential off takers
continue. Coal prices continue to trend upwards and the market looks very
encouraging. The drilling on the Thuli project has commenced and an
`Inferred` status is expected early in the next quarter. The drilling data
acquired from Exxaro gives us the possibility of bringing two of the Baobab
farms into production 18 months earlier than we previously thought."
DISCUSSION OF RESULTS
Coal Activities
Mooiplaats Coal Project
(70% on completion of the Coal of Africa Limited transaction)
During the previous quarter, CoAL was granted Mining Rights for portions 1
and 9 in terms of Section 23 of the Mineral and Petroleum Resources
Development Act, encompassing some 940 hectares of the 22k hectare project.
Mining on these portions is expected to commence in the second half of the
2008 calendar year.
The infill drilling programme continued at Mooiplaats during the quarter and
10,000 metres were drilled, bringing the total metres drilled on the project
to over 65,000. On completion of the exploratory drilling phases, additional
holes will be drilled to enable water monitoring. The independent
consultants` project reports on phases 1 and 2 of the drilling together with
a report on mining floor and roof support requirements is expected shortly.
A further GBP10 million was paid as part of the GBP35.5 million payable to
acquire 70% of the Mooiplaats Coal Project. The balance payable of GBP10
million in cash and 4,444,445 shares will deliver the remaining 21% of the
70% stake acquired in the project.
Discussions with mining contractors have been concluded and those with
potential off take partners - including Eskom - continued during the quarter
under review.
As a result of the substantial increase in the price of export thermal coal,
the Company is now reviewing its earlier plans of supplying largely unwashed
thermal coal to the domestic market and is now focusing on the possibility
of concentrating on producing washed coals for the export market.
Baobab Coal Project (100%)
Gemecs (Pty) Ltd completed an initial geological evaluation and an initial
geological evaluation of the Fripp and Tanga properties based on the data
obtained from Exxaro. The evaluation yielded potential open cast resources
of over 140 million tonnes of coal in `Measured, `Indicated` and `Inferred`
resource categories. Total resources at Fripp and Tanga stand at 710 million
tonnes.
East Coast Maritime (Pty) Ltd were appointed to assess railway, road and
port infrastructure required for CoAL`s Baobab and Thuli coal projects and
their mandate has been extended to Phase 2 of the project . Phase 1 of the
study has been completed and the report detailing the findings will be
finalised by the end of January while Phase 2 will develop the
infrastructure and relationships identified in Phase 1.
A co-operation agreement has been signed with Transnet Freight Rail whereby
CoAL will be able to acquire coal transport capacity from Transnet.
Thuli Coal Project (Limpopo) (74%)
LudikCore (Pty) Ltd and GeoMechanics (Pty) Ltd commenced drilling on the
Thuli Coal Project and are expected to deliver a JORC/ SAMREC compliant
`Inferred` status on the Prospect area by the end of April 2008. An
Aeromagnetic study of the Baobab, Thuli and Tshikunda Coal Projects has been
contracted for February 2008 with the results by the end of the current
quarter.
Holfontein Coal Project (100%)
During the December quarter, the consultants continued to prepare the Mining
Work Programme as well as the Social and Labour Plan and Environmental
Impact Study. The Company commenced with the application for the New Order
Mining Right and the preparation of the Pre-feasibility study for the mining
of the Holfontein coal project. Drilling on the new portion of Holfontein
and the portions of Wildebeesfontein acquired in the previous quarter is
expected to commence in February 2008.
Nimag Group of Companies (100%)
The Nimag Group`s profit before interest and tax for the six months was
ZAR5.5 million (A$980k). The nickel magnesium business continued to
experience tougher trading conditions in the form of thinner margins and
increased working capital requirements due to depressed global nickel demand
combined with slow movement of goods at Durban harbour. The smaller Ferro
Silicon business operated well ahead of expectations contributing to the
Group`s profitability.
Authorised by
Simon Farrell
Managing Director
31 January 2008
For more information contact:
Simon Farrell, Managing Director CoAL
+61 417 985 383 or +61 8 9322 6776
Petronella Gorrie The Event Shop
+27 82 827 8815
Jos Simson/Leesa Peters Conduit PR
+44(0) 20 7429 6603
Olly Cairns / Romil Patel Blue Oar Securities Plc
+61 6430 1631 or +44(0) 20 7448 4400
www.coalofafrica.com
The information in this report as it relates to geology of the Baobab
Project was overseen by J C Sparrow a Director of Gemecs (Pty) Ltd. Mr
Sparrow is a member of the South African Council for Natural Scientific
Professions (400109/03), with a BSc (Univ. of Natal), BSc Hons Geology.
(Univ. of Johannesburg) and a Chamber of Mines certificate in Rock Mechanics
and qualifies as a competent person in the field of activity being reported
on and consents to the inclusion of this information in the form and context
in which it appears in this report.
Rule 5.3
Appendix 5B
Mining exploration entity quarterly report
Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.
Name of entity
Coal of Africa Limited (previously GVM Metals Limited)
ABN Quarter ended ("current quarter")
98 008 905 388 31 December 2007
Consolidated statement of cash flows
Cash flows related to operating Current Year to date
activities quarter (6 months)
$A`000 $A`000
1.1 Receipts from product sales and 10,265 22,242
related debtors
1.2 Payments for
(a) exploration and (5,239) (6,681)
evaluation
(b) development
(c) production (10,936) (28,060)
(d) administration (4,685) (5,912)
1.3 Dividends received - -
1.4 Interest and other items of a 127 641
similar nature received
1.5 Interest and other costs of (47) (75)
finance paid
1.6 Income taxes paid (13) (13)
1.7 Other - -
(10,528) (17,858)
Net Operating Cash Flows
Cash flows related to investing
activities
1.8 Payment for purchases of:
(a)prospects (21,714) (41,724)
(b)equity investments - -
(c) other fixed assets (447) (683)
1.9 Proceeds from sale of:
(a)prospects - -
(b)equity investments 497 497
(c)other fixed assets - -
1.10 Loans to other entities - -
1.11 Loans repaid by other entities - -
1.12 Other (provide details if (1,860) (1,860)
material)
(23,524) (43,770)
Net investing cash flows
1.13 Total operating and investing cash (34,052) (61,628)
flows (carried forward)
1.13 Total operating and investing cash (34,052) (61,628)
flows (brought forward)
Cash flows related to financing
activities
1.14 Proceeds from issues of shares, 116,939 116,939
options, etc.(net) -see note 7.4
below
1.15 Proceeds from sale of forfeited - -
shares
1.16 Proceeds from borrowings - -
1.17 Repayment of borrowings - -
1.18 Dividends paid - -
1.19 Other (Exchange rate related
movements in foreign borrowings
and reserves)
Net financing cash flows 116,939 116,939
82,887 55,311
Net increase (decrease) in cash
held
1.20 Cash at beginning of quarter/year 33,927 61,530
to date
1.21 Exchange rate adjustments to item 154 127
1.20
1.22 Cash at end of quarter 116,968 116,968
Payments to directors of the entity and associates of the directors.
Payments to related entities of the entity and associates of the related
entities
Current quarter
$A`000
1.23 Aggregate amount of payments to the parties 250
included in item 1.2
1.24 Aggregate amount of loans to the parties -
included in item 1.10
1.25 Explanation necessary for an understanding of
the transactions
Non-cash financing and investing activities
2.1 Details of financing and investing transactions which have had a
material effect on consolidated assets and liabilities but did not
involve cash flows
2.2 Details of outlays made by other entities to establish or increase
their share in projects in which the reporting entity has an
interest
Financing facilities available
Add notes as necessary for an understanding of the position.
Amount Amount used
available $A`000
$A`000
3.1 Loan facilities - -
3.2 Credit standby arrangements 5,073 3,782
Estimated cash outflows for next quarter
$A`000
4.1 Exploration and evaluation (2,000)
4.2 Development -
Total (2,000)
Reconciliation of cash
Reconciliation of cash at the end Current Previous
of the quarter (as shown in the quarter quarter
consolidated statement of cash $A`000 $A`000
flows) to the related items in the
accounts is as follows.
5.1 Cash on hand and at bank 2,393 33,089
5.2 Deposits at call 118,357 1,493
5.3 Bank overdraft (3,782) (655)
5.4 Other (provide details)
- -
Total: cash at end of quarter 116,968 33,927
(item 1.22)
Changes in interests in mining tenements
Tenement Nature of Interest at Interest at
reference interest beginning end of
(note of quarter quarter
(2))
6.1 Interests in
mining tenements
relinquished,
reduced or lapsed
6.2 Interests in Tenement Nature of Interest at Interest at
mining tenements reference interest beginning end of
acquired or (note of quarter quarter
increased (2))
- - - -
Issued and quoted securities at end of current quarter
Description includes rate of interest and any redemption or conversion
rights together with prices and dates.
Total number Number Issue Amount
quoted price per paid up
security per
(see note security
3) (cents) (see note
3)
(cents)
7.1 Preference
+securities
(description)
7.2 Changes during
quarter
(a) Increases
through issues
(b) Decreases
through returns
of capital, buy-
backs,
redemptions
7.3 +Ordinary 297,429,472 297,429,472
securities
7.4 Changes during
quarter
(a) Increases 8,888,888 8,888,888 30 pence 30 pence
through issues 590,063 590,063 34 pence 34 pence
65,000,000 65,000,000 65 pence 65 pence
15,000,000 15,000,000 A$1.50 A$1.50
(b) Decreases
through returns
of capital, buy-
backs
7.5 +Convertible
debt securities
(description)
7.6 Changes during
quarter
(a) Increases
through issues
(b) Decreases
through
securities
matured,
converted
7.7 Options Exercise Expiry
(description and 23,252,263 23,252,263 price date
conversion See Note 6 See Note
factor) 6
7.8 Issued during 1,625,000 1,625,000 Exercise Expiry
quarter 375,000 375,000 price date
See Note 6 See Note
6
7.9 Exercised during 590,063 590,063 34 pence 34 pence
quarter
7.10 Expired during Nil Nil
quarter
7.11 Debentures
(totals only)
7.12 Unsecured notes
(totals only)
Compliance statement
1 This statement has been prepared under accounting policies which comply
with accounting standards as defined in the Corporations Act or other
standards acceptable to ASX (see note 4).
2 This statement does give a true and fair view of the matters disclosed.
Sign here: ................................... Date: 31 January 2008
(Director)
Print name: Simon Farrell
Notes
1 The quarterly report provides a basis for informing the market how the
entity`s activities have been financed for the past quarter and the
effect on its cash position. An entity wanting to disclose additional
information is encouraged to do so, in a note or notes attached to this
report.
2 The "Nature of interest" (items 6.1 and 6.2) includes options in
respect of interests in mining tenements acquired, exercised or lapsed
during the reporting period. If the entity is involved in a joint
venture agreement and there are conditions precedent which will change
its percentage interest in a mining tenement, it should disclose the
change of percentage interest and conditions precedent in the list
required for items 6.1 and 6.2.
3 Issued and quoted securities: The issue price and amount paid up is
not required in items 7.1 and 7.3 for fully paid securities.
4 The definitions in, and provisions of, AASB 1022: Accounting for
Extractive Industries and AASB 1026: Statement of Cash Flows upply to
this report.
5 Accounting Standards ASX will accept, for example, the use of
International Accounting Standards for foreign entities. If the
standards used do not address a topic, the Australian standard on that
topic (if any) must be complied with.
6 Issued and Quoted Securities as at 31 December 2008:
Number Issued Number Exercise Expiry Date Lapsed Since
Quoted Price End of quarter
13,500,000 - A$0.50 30 September 2011 -
555,575 - GBP0.54 31 May 2009 -
196,688 - GBP0.34 17 May 2009 -
7,000,000 - A$1.25 30 September 2012 -
1,625,000 - GBP0.65 30 November 2009 -
375,000 - A$1.50 30 November 2009 -
+ See chapter 19 for defined terms.
30/9/2001
31 January 2008
Sponsor
PricewaterhouseCoopers Corporate Finance (Pty) Limited
Date: 31/01/2008 08:53:51 Produced by the JSE SENS Department.
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