| Fri 19 Aug 2011, 12:00 | | OPT - Optimum Coal Holdings Limited - Acquisition of Remhoogte Prospecting |
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OPT
OPT
OPT - Optimum Coal Holdings Limited - Acquisition of Remhoogte Prospecting
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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")
OPTIMUM COAL - ACQUISITION OF REMHOOGTE PROSPECTING RIGHTS
Optimum Coal, a leading South African coal mining and exploration group,
listed on the JSE Limited, wishes to inform shareholders and update the
market about its acquisition of two prospecting rights ("the Remhoogte
Prospecting Rights") for a cash consideration of R235 million from BHP
Billiton Energy Coal South Africa Limited ("BECSA") ("the acquisition").
The Remhoogte Prospecting Rights are located to the south and west of Davel,
in the Ermelo Coalfield. The Remhoogte Prospecting Rights have an inferred
resource of approximately 306.5Mt, based on 219 boreholes. These resources
are based predominantly on the C Lower seam and the C Upper seam where it is
able to be mined together with the C Lower seam.
Once developed, the Remhoogte mine will be a large scale, 2nd quartile cash
cost, underground export focussed mine with new infrastructure and an
expected life of mine of 16 years before further possible life extension
opportunities. The mine is expected to produce 4 Mtpa run of mine product
that will produce an estimated 2.5mtpa of saleable 6000kcal export coal and
an estimated 400ktpa of Eskom middlings product with a quality of 20.8 Mj/kg.
Remhoogte is conveniently situated for exports of thermal coal as it is
directly adjacent to the RBCT coal line. Remhoogte is closer to Richards Bay
than the mines of the Witbank Coalfield
The acquisition is subject to various conditions precedent including section
11 approval from the Department of Mineral Resources. The acquisition will be
funded from own cash resources and re-financed group debt facilities.
CEO Mike Teke said "In addition to our Vlakfontein and Overvaal projects, the
Remhoogte acquisition provides Optimum Coal with another attractive green-
fields growth opportunity and substantially improves the high quality export
component of our overall coal portfolio. At this stage it is envisaged that
Remhoogte will principally be a replacement for Optimum Colliery`s export
saleable production in the medium to long term, although market conditions
and an improvement in export logistics could result in the development of the
project being expedited. In addition to the production of high quality
exports, the middlings to be produced will be an ideal feedstock for Eskom`s
nearby Camden and Majuba power stations."
Shareholders are advised that the Company continues to trade under cautionary
as advised on SENS on 17 August 2011.
www.optimumcoal.com
19 August 2011
Johannesburg
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Financial Communications Advisers
COLLEGE HILL
Date: 19/08/2011 12:00:01 Produced by the JSE SENS Department.
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