| Fri 17 Dec 2010, 15:41 | | FSE - Firestone Energy Limited - Major shareholder Sekoko Coal secures R249 |
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FSE
FSE
FSE - Firestone Energy Limited - Major shareholder, Sekoko Coal, secures R249
Million funding for Waterberg Coal Project
FIRESTONE ENERGY LIMITED
(Registration number: ABN 058 436 794)
(SA company registration number: 200/023973/10)
Share code on the JSE: FSE
Share code on the ASX: FSE
ISIN: AU000000FSE6
("FSE" or "the Company")
MAJOR SHAREHOLDER, SEKOKO COAL, SECURES R249 MILLION FUNDING FOR WATERBERG
COAL PROJECT
INTRODUCTION
Firestone Energy Limited (ASX / JSE : FSE) has been formally advised by Sekoko
Coal (Pty) Ltd (("Sekoko"), the major shareholder (39%)) and BEE joint venture
partner of FSE that Sekoko has entered into an agreement with the Industrial
Development Corporation of South Africa Limited ("IDC") that will enable
Sekoko in partnership with the IDC to fund Sekoko`s future contribution in the
development of the Firestone properties resulting in the IDC owning 33.3% of
Sekoko`s equity in the Waterberg Coal Joint Venture ("the Project") for ZAR249
million.
DETAILS OF THE SEKOKO TRANSACTION
Following intensive due diligence process, The Industrial Development
Corporation of South Africa (IDC), a developmental finance institution wholly
owned by the South African Government, has approved and committed funding
support to assist Sekoko to maintain and follow its rights in FSE and the
Project.
The funding will be made available for the Waterberg mine construction. The
funding support will be facilitated by Sekoko transferring its rights and
interests in the Project and FSE to a new company (Newco) which will be held
by Sekoko (66.7%) and IDC (33.3%). The IDC will contribute up to R204 million
for its equity stake and will also make available a R45 million Standby
Preference Share Facility.
On conversion of the convertible notes by Newco and taking into account the
FSE shares it will already own in FSE the IDC`s shareholding in Newco will
result in it owning an effective interest of approximately 20% of the
Waterberg Project on a see through basis.
Sekoko is delighted with this landmark achievement. The finance approval is
binding on both Sekoko and IDC. The agreements are currently being drafted
for signature early January 2011.
ABOUT SEKOKO
Sekoko is a black owned and managed mining company with all its prospecting
and mining activities based in Limpopo Province in South Africa. Sekoko is a
broad based black economic empowerment company with diversified shareholding
including communities of Limpopo, black women and historical disadvantaged
individuals.
Sekoko is excited that IDC is keeping to its mandate of supporting and funding
community and historically disadvantaged individuals owned entities located in
the rural and outlying areas of the country which might result in stimulating
employment and economic growth in these areas.
Sekoko initiated and promoted the Waterberg Coal Project since 2005. FSE
joined as a partner afterwards and the Definitive Feasibility Study was
completed in October 2010 driven mostly by Sekoko Coal.
Mr. Tim Tebeila, the executive chairman of Sekoko has reported that they are
delighted to have the IDC as a funding partner for their Waterberg Joint
Venture project.
ABOUT THE IDC
The IDC is a self-financing, national Development Finance Institution (DFI) in
South Africa. It was established in 1940 to promote economic growth and
industrial development in South Africa.
IDC`s track record and successes in funding developing mining and energy
projects over the last 70 years of its existence speaks for itself. It funded
the development of and is currently a sizeable shareholder in most of the top
resources companies in South Africa. The list include Sasol Limited, Acelor
Mittal South Africa, Exxaro Resources, Kumba Resources, Kalagadi Manganese and
Foskor Ltd.
The Non Executive Chairman of FSE, Mr John Dreyer, believes this is a very
positive step for the coal project whereby Sekoko/IDC can now finance their
share of the mine development under the terms and conditions of the Joint
Venture agreement. Mr. Dreyer mentioned the necessary changes to the Joint
Venture agreement are being drafted and that the IDC deal is subject to the
shareholders agreement being signed, when this is completed a further
announcement will be then made.
In other developments, the discussions on the Eskom offtake agreement are
progressing satisfactory and are expected to be concluded shortly.
Further information can be obtained by contacting the person below on
+61 (08) 9 2874600.
John Dreyer
Chairman
www.firestoneenergy.com.au
Johannesburg
17 December 2010
Sponsor and Corporate Advisor
River Group
About Firestone Energy
Firestone Energy is an independent Australian exploration company focused on
developing coal projects in South Africa. The company is currently exploring
the richly endowed Waterberg coal field in the Limpopo Province of South
Africa.
The Company is committed to value-added growth through becoming an independent
coal and energy producer at its projects in South Africa.
The Company has entered into three joint ventures with Sekoko Resources, a
South African black empowerment company (BEE) and Sekoko has two directors on
the Board of Firestone Energy.
Corporate Details
ASX: FSE
JSE: FSE
Issued Capital:
2,401 million ordinary shares
Major Shareholders:
Sekoko Resources (Pty) Ltd
Colbern Fiduciary Nominees Ltd
Bell Potter Nominees Ltd
Directors and Officers:
Non Executive Directors:
John Dreyer (Chairman)
Timothy Tebeila (Deputy Chairman)
Colin McIntyre
John Wallington
Sizwe Nkosi
Company Secretary
Jerry Monzu
Contact:
Suite B9, 431 Roberts Road
Subiaco, Western Australia 6008
Tel: +61 (0)8 9287 4600
Web: www.firestoneenergy.com.au
Date: 17/12/2010 15:41:01 Produced by the JSE SENS Department.
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