| Tue 29 Apr 2008, 10:15 | | CZA - Coal of Africa Limited - Report for the Marc |
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CZA
CZA
CZA - Coal of Africa Limited - Report for the March 2008 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
(`CoAL` or `the Company`)
REPORT FOR THE MARCH 2008 QUARTER
Coal of Africa Limited (`CoAL` or `the Company`) is pleased to announce its
operational report for the quarter ended 31 March 2008. A full copy of this
report, as released today on the ASX, is available at the Company`s website,
www.coalofafrica.com.
Highlights
* CoAL received Section 11 approval satisfying the last remaining condition
for the acquisition of 70% of the Mooiplaats coal project.
* CoAL reached agreement to acquire the remaining 30% of the Mooiplaats coal
project. The cash portion of ZAR130 million of the acquisition price was
paid during quarter and shareholder approval for the issue of 4.75 million
shares to complete the transaction was obtained in April.
* Signing of a co-operation agreement with Transnet Freight Rail for export
rail capacity from CoAL`s Baobab and Thuli projects commencing with rail
capacity of 1 to 1.5 Mt PA in 2009 increasing to 10 Mt PA in 2012.
* Draft mining contract received for the mining of the Mooiplaats coal
project.
* Completion of an Aeromagnetic study on the Baobab, Thuli and Tshikunda
prospects.
* Over 5,000 metres of drilling were completed on the Thuli coal project
comprising 55 holes.
* New Order Mining Right application for the Holfontein coal project
submitted to the Department of Minerals and Energy.
* Despite Nimag (Pty) Ltd`s nickel magnesium alloy business continuing to
experience tough trading conditions, the group generated an EBIT for the
quarter of A$1.5 million.
* Cash balance at the end of the quarter was A$63 million.
Commenting on the results today, Simon Farrell, Managing Director of CoAL, said,
"We are pleased to announce continued strong progress across the Company`s coal
projects. Drilling at the Thuli project confirms our expectations of the coal
reserves and we plan to submit Mining Right applications for both the Baobab and
Thuli projects by the middle of this year."
DISCUSSION OF RESULTS
Coal Activities
Mooiplaats Coal Project
(100% on completion in April)
During the quarter, CoAL received consent in terms of Section 11(1) of the
Minerals and Petroleum Resources Development Act satisfying the last condition
to complete the acquisition of 70% of the Mooiplaats coal project. CoAL paid the
remaining acquisition price of GBP10 million and issued 4.44 million shares for
the acquisition taking its interest in the project to 70%. Furthermore, the
Company reached agreement to acquire the remaining 30% interest in the project
for ZAR130 million in cash and 4.75 million CoAL shares. The issue of these
shares required shareholders` approval which was obtained in April.
Management expect that mining will commence towards the end of the third quarter
of this year and production will start in the following quarter. Limited access
to the project site has led to a short delay in the development of the project.
Discussions with the surface rights owner, allowing access to the site, have
been ongoing and are expected to be finalised by the end of April.
A draft mining contract has been received, the terms of which are anticipated to
be finalised by the end of May. Additional production related drilling has been
commissioned to confirm data for the geological model to identify the best site
for the Beta decline on the farm Klipbank.
New Order Prospecting Rights have also been executed for farms neighbouring the
Mooiplaats project. The Prospecting Rights for the farms De Emigratie,
Willemsdal and Klipfontein have an area of 9,260 Ha and the Directors believe
that they may add significant additional coal resources to the project.
Discussions with potential off-take customers continued during the quarter and
included the potential export of lean coal to Europe. Negotiations with Transnet
regarding rail allocation for Richards Bay export coal together with port
allocation agreements are expected to be finalised in the June quarter.
Baobab Coal Project (100%)
A detailed Aeromagnetic survey encompassing over 60,000 Ha of the Baobab, Thuli
and Tshikunda project areas was undertaken during the quarter and was completed
in April. During the survey, the helicopters used to collect the data will have
flown more than 19,000 kilometres. The results of the survey will be used in an
in-depth geophysical analysis to be undertaken in the June quarter.
Digitisation of the exploration data acquired from Exxaro Limited earlier in the
year continued during the quarter under review. The information obtained from
the data correlates with Management`s expectations and will be included in an
updated resource statement to be released later this year.
Detailed analysis has been completed on the selection of mineable coal horizons
within the 35 metre thick coal seam. This analysis will be used in the
geological modelling and resource estimation that will be performed in the next
quarter. This exercise is expected to optimise the coal horizon being mined
leading to higher coking coal yields.
Large diameter core drilling sites were prepared during the quarter allowing for
the commencement of the large diameter core drilling in the June quarter. This
drilling programme will yield samples for detailed petrochemical as well as
other coal parameter testing. A further 5,000 metre smaller diameter drilling
programme will be undertaken in the June quarter to define the coal outcrop
zones and identify any dolerite intrusions.
East Coast Maritime (Pty) Ltd continued with Phase Two of the infrastructure
study resulting in CoAL signing a Rail Cooperation Agreement with Transnet
Freight Rail (`TFR`), the largest division of Transnet, the South African
Government owned rail and freight organisation. The Rail Cooperation Agreement
formalises interaction between CoAL and TFR whereby TFR will assist the Company
to obtain the correct rail slots, appropriate rolling stock as well as
commercially competitive freight rates for the transportation of its export coal
to the Richards Bay and Maputo ports. CoAL has indicated to TFR that it will
need railway capacity for the following export tonnages:
* 2009 - 1 to 1.5 Mt PA
* 2010 - 4 to 5 Mt PA
* 2011 - 4 to 5 Mt PA
* 2012 - 10 Mt PA
Thuli Coal Project (Limpopo) (74%)
LudikCore (Pty) Ltd and GeoMechanics (Pty) Ltd continued drilling on the Thuli
Coal Project and by the end of March had drilled over 5,000 metres comprising
some 55 holes. The remainder of the drilling programme consists of 15 holes,
which will be completed in the June quarter. Furthermore, CoAL acquired the
original drilling data from the exploration undertaken by Southern Sphere (Utah
Mining) in the early 1980`s. During March, the data was converted to digital
format, validated and progress made on the modelling of the data.
The drilling programme together with the data acquired will result in the
current exploration programme delivering a JORC/ SAMREC compliant `Indicated`
resource, upgrading the previously reported `Inferred` resource. Management are
confident that portions of the prospect will be in a JORC/SAMREC compliant
`Measured` status as the current exploration programme is confirming the results
of the earlier Southern Sphere exploration programme.
Holfontein Coal Project (100%)
During the March quarter, the New Order Mining Right application for the
Holfontein project was submitted to the Department of Minerals and Energy.
Exploration on the project continued with over 6,500 metres drilled since
February, including the portion of Holfontein and the portions of
Wildebeesfontein recently acquired. The drilling programme will be completed
during the current quarter and is expected to result in a JORC/SAMREC compliant
`Measured` resource. During the quarter, third parties approached the Company
with regards to acquiring a significant stake in the project; the Directors are
currently assessing these offers.
Nimag Group of Companies (100%)
The Nimag Group`s profit before interest and tax for the nine months was ZAR14.7
million (A$2.3 million). The nickel magnesium business continued to experience
tough trading conditions in the form of thinner margins and increased working
capital requirements but was able to improve significantly on the first six
months` results. The smaller Ferro Silicon business operated well ahead of
expectations contributing to the Group`s profitability to date.
Authorised by
Simon Farrell
Managing Director
29 April 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 8 6430 1631 / +44(0) 20 7448 4400
www.coalofafrica.com
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 March 2008
Consolidated statement of cash flows
Current Year to date
Cash flows related to operating activities quarter (9 months)
$A`000 $A`000
1.1 Receipts from product sales and 12,094 34,336
related debtors
1.2 Payments for
(a) exploration and evaluation (1,273) (7,954)
(b) development
(c) production (11,925) (39,986)
(d) administration (1,944) (7,856)
1.3 Dividends received - -
1.4 Interest and other items of a similar 2,106 2,747
nature received
1.5 Interest and other costs of finance (73) (148)
paid
1.6 Income taxes paid (1,558) (1,570)
1.7 Other - -
Net Operating Cash Flows (2,573) (20,431)
Cash flows related to investing
activities
1.8 Payment for purchases of:
(a)prospects (51,038) (92,763)
(b)equity investments - -
(c) other fixed assets (62) (744)
1.9 Proceeds from sale of:
(a)prospects - -
(b)equity investments - 497
(c)other fixed assets - -
1.10 Loans to other entities - -
1.11 Loans repaid by other entities - -
1.12 Other (provide details if material) - (1,860)
Net investing cash flows (51,100) (94,870)
1.13 Total operating and investing cash (53,673) (115,301)
flows (carried forward)
1.13 Total operating and investing cash (53,673) (115,301)
flows (brought forward)
Cash flows related to financing
activities
1.14 Proceeds from issues of shares, - 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
Net increase (decrease) in cash held (53,673) 1,638
1.20 Cash at beginning of quarter/year to 116,968 61,530
date
1.21 Exchange rate adjustments to item (363) (236)
1.20
1.22 Cash at end of quarter 62,932 62,932
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
included in item 1.2 180
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
Issuing of 4,444,445 shares as part consideration for acquisition
of the Mooiplaats coal project.
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 4,718 1,787
Estimated cash outflows for next quarter
$A`000
4.1 Exploration and evaluation (2,500)
4.2 Development (1,500)
Total (4,000)
Reconciliation of cash
Reconciliation of cash at the end of the Current Previous
quarter (as shown in the consolidated quarter quarter
statement of cash flows) to the related $A`000 $A`000
items in the accounts is as follows.
5.1 Cash on hand and at bank 3,612 2,393
5.2 Deposits at call 61,107 118,357
5.3 Bank overdraft (1,787) (3,782)
5.4 Other (provide details)
- -
Total: cash at end of quarter (item 62,932 116,968
1.22)
Changes in interests in mining tenements
Tenement Nature of Interest Interest
reference interest at at end of
(note (2)) beginning quarter
of quarter
6.1 Interests in mining
tenements
relinquished, reduced
or lapsed
6.2 Interests in mining Tenement Nature of Interest Interest
tenements acquired or reference interest at at end of
increased (note (2)) beginning quarter
of quarter
- - - -
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 quoted Issue Amount
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 301,873,917 301,873,917
securities
7.4 Changes during
quarter
(a) Increases 4,444,445 4,444,445 30 pence 30 pence
through issues
(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 23,252,263 23,252,263 price date
and conversion See Note 6 See Note
factor) 6
7.8 Issued during Nil Nil Exercise Expiry
quarter price date
See Note 6 See Note
6
7.9 Exercised Nil Nil Nil Nil
during 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: 29 April 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 apply 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.
Issued and Quoted Securities as at 31 March 2008:
Number Number Exercise Expiry Date Lapsed
Issued Quoted Price Since 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 -
Sponsor
PricewaterhouseCoopers Corporate Finance (Pty) Ltd
Date: 29/04/2008 10:15:05 Produced by the JSE SENS Department.
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