| Mon 17 Jan 2011, 13:25 | | OPT - Optimum Coal Holdings Limited - Trading statement and operational update |
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OPT
OPT
OPT - Optimum Coal Holdings Limited - Trading statement and operational update
for the six months to December 2010
OPTIMUM COAL HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2006/007799/06)
Share code: OPT
ISIN: ZAE000144663
Issuer code: OPT
("Optimum Coal" or the "Company")
TRADING STATEMENT AND OPERATIONAL UPDATE FOR THE SIX MONTHS TO DECEMBER 2010
Optimum Coal, a leading South African coal mining and exploration group listed
on the JSE Limited ("JSE"), is currently finalising its results for the half
year ended 31 December 2010, which will be released on SENS on 3 February 2011.
In this regard, shareholders are advised that earnings per share ("EPS") and
headline earnings per share ("HEPS") will likely be more than 20% higher than
the restated EPS and HEPS for the previous corresponding half year to 31
December 2009 ("the comparable period").
A further trading statement will be issued in due course to provide earnings
forecast ranges for HEPS and EPS as required by the JSE Listings Requirements.
The Company also wishes to inform shareholders and update the market on
operational performance at Optimum Collieries and Koornfontein Mines. Optimum
Coal owns 100% of Optimum Collieries and Koornfontein Mines respectively.
Optimum Coal produced 8.789 million tons of run-of-mine ("ROM") coal during the
first half of FY2011, an increase of 35% on the 6.493 million tons produced in
the comparable period. Of this, 3.611 million tons of export/high quality
domestic coal was produced, 40% up on 2.572 million tons produced in the
comparable period. Additionally, 3.422 million tons of Eskom quality coal was
produced, 37% up on 2.500 million tons produced in the comparable period. The
comparable period production numbers do not include production from Koornfontein
Mines, as Optimum Coal did not own Koornfontein Mines at the time. For
information purposes, Koornfontein Mines produced 1.515 million tons of ROM
coal, 0.947 million tons of export/high quality domestic coal and 0.676 million
tons of Eskom quality coal during the comparable period.
Table 1 - Salient Production Features at Optimum Collieries and Koornfontein
Mines for the 6 month period 1 July 2010 to 31 December 2010.
Optimum Koornfontein Total
Units Collieries Mines
ROM production t`000 7,239 1,550 8,789
Export/ high t`000 2,643 968 3,611
quality
domestic coal
saleable
Eskom quality t`000 2,751 671 3,422
saleable
Chief Executive Officer Mike Teke said; "We are pleased with our group
production performance for the first half of FY2011. ROM production at Optimum
Collieries has improved by 11.5% on the comparable period, non-withstanding
having been affected by difficult cutting conditions and a reduction in cutting
tempos due to drawn out wage negotiations at Boschmanspoort underground mine.
Our opencast mines have been affected by the excessive rains experienced over
recent weeks, although our water management structures and initiatives have
mitigated against some of the operational impact. Now being fully integrated
since March 2010, Koornfontein Mines has proven itself a valuable addition to
Optimum Coal and is an important step in our growth strategy. Local logistics
remain challenging, but we are working closely with Transnet Freight Rail and
Richards Bay Coal Terminal in this regard."
The outlook for thermal coal remains robust on the back of strong international
demand coupled with supply constraints across key coal producing regions. Global
demand has been boosted by the cold European winter combined with increased
power generation and continued growth in Asian countries. Extreme weather
conditions experienced since November 2010 have materially impacted local and
international thermal coal supply and this supply tightness has caused a 45%
rise in API#4 dollar thermal coal prices out of Richard Bay since October 2010.
"We believe that global supply constraints will take some time to resolve and
that international thermal coal demand remains robust and sustainable. Optimum
Coal is well placed to take advantage of these current market conditions."
The financial information on which this update is based has not been reviewed
and reported on by the Company`s external auditors.
www.optimumcoal.com
17 January 2011
Johannesburg
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Financial Communications Advisers
COLLEGE HILL
Date: 17/01/2011 13:25:02 Produced by the JSE SENS Department.
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