| Wed 12 Oct 2011, 13:07 | | KEH - Keaton Energy Holdings Limited - Business update and changes to the |
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KEH
KEH
KEH - Keaton Energy Holdings Limited - Business update and changes to the
board of directors
Keaton Energy Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 2006/011090/06)
JSE code: KEH ISIN code: ZAE000117420
("Keaton Energy" or "the company")
Business update and changes to the board of directors
Business update
Interim results
Keaton Energy`s six-month, interim reporting period ended on 30 September
2011. The company expects to release its interim financial results early
in December 2011.
Project update: Vanggatfontein Project
During the period, 99 233 tonnes of 5-Seam coal were sold to the domestic
metallurgical industry and thermal coal customers. Demand was negatively
affected during the winter months when customers traditionally shut down
their furnaces for maintenance as electricity tariffs are at their
highest. The production of 5-Seam run-of-mine coal was also affected by
geological washouts and weathered coal at the boundaries of the coal
reserve. The monthly sales target for 5-Seam coal remains 20 000 tonnes.
Following the failure of a surge bin support structure in the 2- & 4-Seam
plant on 27 May 2011, the ramp-up to full production of 2- & 4-Seam coal
contracted to Eskom was affected. An interim solution was found, using
mobile conveyors to by-pass the damaged area, and 29 981 tonnes were
delivered to Eskom in July 2011. The damage was fully repaired by the
end of July 2011, and 79 494 tonnes were delivered to Eskom in August
2011 and 120 566 tonnes in September 2011. The ramp-up is expected to
continue until steady-state production of between 175 000 and 210 000
tonnes per month is achieved. Production in excess of 175 000 tonnes per
month is required to reduce the backlog of under-delivered coal to Eskom.
Legal advice has been sought relating to the liability for damage caused
as a result of the support structure failure, and an announcement will be
made once legal certainty has been achieved.
The project is currently at its peak cash requirement, with the expected
increase in production seeing the project break even in the next few
months. Rollover mining has been initiated in Pit 1, with Pit 2
following in November 2011. The contractor will also now move to 24/6
operations to ensure that the required run-of-mine production can be
achieved.
Leeuw Mining and Exploration transaction ("the transaction")
While the conclusion of the transaction remains dependent on regulatory
approval, operations at the Vaalkrantz Colliery have improved
dramatically following the support provided by Keaton Energy. Some 205
715 tonnes of anthracite were produced in the period, with 91 374 tonnes
exported and 114 341 tonnes sold to domestic customers.
Changes to the board of directors
Resignation of the Financial Director and appointment of a Financial
Director Designate
Johan Schonfeldt has given notice of his intention to resign his position
as Financial Director of Keaton Energy with effect from 30 November 2011.
He intends relocating to Australia with his family. The Board would like
to thank Johan for the invaluable contribution he has made to the
establishment and on-going success of the company and wish him and his
family all the best.
Jacques Rossouw has been appointed Financial Director Designate and will
take up the position from 1 November 2011. Jacques is a CA (SA), having
completed his articles with PricewaterhouseCoopers, and subsequently
worked in both the high technology and mining industries, most recently
as Manager: Corporate Reporting at Harmony Gold Mining Company Limited.
Change in executive director responsibilities
Mandi Glad, currently Executive Director: Marketing and New Business
Development will assume responsibility for the company`s operations as
Executive Director: Operations. She will continue to have responsibility
for coal marketing and regulatory matters. Paul Miller, Managing
Director, will assume responsibility for New Business Development.
Bryanston
12 October 2011
Sponsor
Nedbank Capital
Date: 12/10/2011 13:07:23 Produced by the JSE SENS Department.
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