| Fri 28 Jan 2011, 13:25 | | FSE - Firestone Energy Limited - Quarterly activities report for the period to |
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FSE
FSE
FSE - Firestone Energy Limited - Quarterly activities report for the period to
31 December 2010 and Cautionary announcement
FIRESTONE ENERGY LIMITED
(formerly: Centralian Minerals Limited
(Incorporated in Australia)
(Registration number ABN 058 436 794)
Share code on the JSE Limited: FSE
Share code on the ASX: FSE
ISIN: AU000000FSE6
(SA company registration number 2008/023973/10)
("FSE" or "the Company"
ASX Release - 28th January 2011
ABN 71 058 436 794
QUARTERLY ACTIVITIES REPORT FOR THE PERIOD TO 31 December 2010 AND CAUTIONARY
ANNOUNCEMENT
The Board of Firestone Energy Limited (ASX / JSE: FSE) is pleased to provide
shareholders with its Quarterly Activities Report for the 3 month period ended
31 December 2010.
HIGHLIGHTS
FSE`s major shareholder, Sekoko Resources, raises R250m with Industrial
Development Corporation to fund Sekoko`s portion of mine construction;
Completed off-take discussions, and agreement expected to be signed shortly;
On target to begin mine construction in the second half of 2011;
Definitive Feasibility Study "DFS" completed and approved by the board on the
31st of October 2010;
Submitted Environmental Impact Assessment / Environmental Management
Programme Report, and have therefore, complied with all requirements for Mining
Rights application. We expect Record Of Decisions and Mining Rights approval
within the first half of 2011;
Letter of interest signed for purchase of Wash plant and long lead plant items;
Rail design work, environmental study and public participation commenced;
Hooikraal surface rights ownership transferred to FSE`s name and secured a 12
month purchase option for Massenberg surface rights;
Cornerstone Investor activity and interest on-going;
Secured and opened an office in Lephalale town within vicinity of the Waterberg
Project.
OVERVIEW
The principle focus of the Company over the past quarter has been to:
finalise the DFS on the Waterberg Project;
Complete the Environmental Impact Assessment studies and submit Environmental
Management Program Report as legally required within 90days of submitting Mining
Rights application;
Secure the off-take agreements; and
Secure the surface rights.
The Board is pleased to report favourable performance on the above objectives.
WATERBERG COAL PROJECT
Definitive Feasibility Study (DFS)
The DFS proved that the Waterberg Project can run a profitable 20 year coal mine
premised on power station type coal. The DFS did not take into account export
coal, metallurgical and low phosphorus coal. A separate short term study is to
commence to confirm yields, volumes, transport and market for these products
which are by their nature more lucrative than power station coal. The board
approved the power station coal DFS on the 31st of October 2010.
Project Update
A letter of interest was signed for a purpose built modular plant that will be
suitable for the mine plan as detailed in the DFS. Long lead items relating to
this plant have already been ordered by the supplier at their own cost. The
final plant purchase agreement will be signed after off-take agreements have
been signed and funding has been confirmed.
Hooikraal surface rights ownership has been registered into FSE`s name. FSE now
owns two surface rights being Smitspan and Hooikraal. The outstanding payments
on the surface rights are currently being paid as per an agreed programme of
payment. FSE signed a 12 month option in November 2010 to purchase Massenberg
surface rights, FSE is negotiating a further option to purchase Vetleegte.
FSE has signed a lease for an office in Lephalale within the Waterberg vicinity.
This further proves the interest and commitment by FSE to start mining
operations in the Waterberg area and contribute to the economic growth and well
being of the Lephalale Municipality, Limpopo Province and South Africa as a
whole.
Socio-economic impact studies have commenced and are progressing well. Ground
water and air quality monitoring studies commenced and are progressing as
intended.
Regulatory Approvals
As part of the Mining Right Application various statutory compliance supporting
documents were lodged with the South African government regulatory authorities
during the quarter.
Milestones achieved within the Feasibility Study phase, include:
Lodgement of the Environmental Management Plan (Dept of Mineral Resources/Dept
of Environmental Affairs & Tourism);
Lodgement of the Water Use Licence Application (Dept of Water Affairs). We have
confirmed with current major users of water in the Waterberg area that there is
spare capacity of water to accommodate start up of our mining activities.
The Company is expecting that the regulatory approvals will still be granted
prior to the first half of 2011.
Further commitments will be made for procurement of long-lead items for the
Water Coal Project and construction is scheduled to commence following receipt
of final regulatory approvals.
MARKETING
Following the approval of the DFS by the board of FSE on the 31st of October
2010, the potential off-taker requested time to study the contents and results
of the DFS. This resulted in FSE not being able to conclude and sign an off-
take agreement by the 31st of December 2010 due to further work, changes and
comments requested by the off-taker following the DFS finalisation.
The potential off-taker satisfied themselves with the contents and changes to
the DFS early in January 2011 and therefore the Sekoko/FSE JV is likely to sign
the off-take agreement before the end of the first quarter of 2011.
Markets for export coal and metallurgical coal have been identified. These
customers are adamant that they will commit to an off-take discussion on
presentation of a DFS report reflecting viability, yields, volumes and costing
of such coal. FSE plans to complete the prime products DFS before the end of
2011.
CORPORATE
It was reported in the first quarter, as part of the post quarter activities,
that Amanda Matthee resigned from FSE as a director and was replaced by Mr Sizwe
Nkosi as the Finance Director. On the 31st of December 2010, Mr John Wallington
resigned from the board of FSE to pursue personal interests.
In early January 2011 Mr Timothy Tebeila resigned from the Firestone board to
remove himself from any future conflicts of interests that he may be presented
with by virtue of his directorships of Sekoko Resources and Firestone Energy
Limited.
As at the 31st of December 2010 the Company had a positive cash balance of
$1.6m.
CAUTIONARY ANNOUNCEMENT
Shareholders are advised that the company has entered negotiations, which if
successfully concluded may have a material effect on the price of the company`s
securities. Accordingly, shareholders are advised to exercise caution when
dealing in the company`s securities until a full announcement is made.
GENERAL
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 two 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)
Sizwe Nkosi
Colin McIntyre
David Perkins
Company Secretary
Jerry Monzu
Contact:
Unit B9,, 431 Roberts Road
Subiaco, Western Australia 6008
Tel: +61 (0)8 9287 4600
Web: www.firestoneenergy.com.au
For further information please contact:
Jerry Monzu
Company Secretary
Tel: +61 8 9287 4600
www.firestoneenergy.com.au
28 January 2011
Pretoria
Sponsor and Corporate Advisor
River Group
Date: 28/01/2011 13:25:01 Produced by the JSE SENS Department.
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