| Tue 31 Jan 2012, 11:00 | | FSE - Firestone Energy Limited - Quarterly activities report for the Period |
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FSE
FSE
FSE - Firestone Energy Limited - Quarterly activities report for the Period
to 31 December 2011
FIRESTONE ENERGY 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")
QUARTERLY ACTIVITIES REPORT for the Period to 31 December 2011
The Board of Firestone Energy Limited (ASX/JSE: FSE) ("Firestone" or the
"Company") is pleased to provide shareholders with its Quarterly Activities
Report for the 3 month period ended 31 December 2011.
Highlights
- The off-take and/or coal supply MoU renegotiations to secure increased
tonnages and an extended supply period are ongoing,
- Ongoing discussions with a listed multinational mining and power company
with regards to investing in the project,
- Technical and environmental work on track, and
- Sekoko Resources (Sekoko) has made a restructuring proposal to Firestone
to streamline the overall joint-venture operations.
Overview
Since joining the company at the beginning of the 3rd quarter of 2011, David
Knox, the Firestone CEO, has focused his attention on working closely with
the newly appointed management team at Sekoko, its major shareholder and
joint venture partner. A review of operations, allocated resources and costs
found that the Company`s respective resources have been operated in
accordance with the requirements of the project.
The Company continues discussions with Eskom to secure increased tonnages and
extend the supply period. In the event that the Company is successful in this
initiative, the overall project may need to be re-modelled and re-budgeted.
Firestone received a proposal from Sekoko, which if implemented, would more
closely align the management and economic interests of the two organisations.
The advantages outlined in the proposal include streamlining management,
simplifying the joint venture structure and providing a more easily
understood investment vehicle for both the equity and debt markets. We expect
to be able to provide updates during Q2 2012.
Funding
In relation to the funding arrangements between Sekoko and IDC, the Company
confirms that it has been informed by Sekoko that the drawdowns under the
facility have commenced. The Company, however, understands from Sekoko that
the balance of the IDC facility is subject to certain conditions (which are
usual for project development facilities) being fulfilled by 30 June 2012.
Furthermore, Sekoko has confirmed that approval of the Australian Foreign
Investment Review Board has been obtained. The company is assessing the
current budget and expenses with regards to its ongoing and potential future
contribution to the joint-venture operation. In light of this, it may be
necessary to raise additional capital during 1st half, 2012. The company will
advise shareholders accordingly.
Marketing
Eskom MOU
The board and Sekoko`s designated project team are working to finalise a
revised MoU and further announcements will be made in due course.
Corporate
Sekoko appointed Mr Jan Britz as CEO, Jan is an experienced mining engineer
with extensive experience in the coal mining industry.
Ms Amanda Matthee was appointed Sekoko CFO. Both Firestone and Sekoko now
have a focused executive team driving the joint-venture business.
During the quarter, Timothy Tebeila joined the Firestone Energy board as
Chairman. His appointment follows a decision made by David Perkins who has
held the position of Chairman since January 2011, and recently relinquished
the position due to other work commitments. David Perkins will remain a non-
executive director and assume the role of Deputy Chairman.
Firestone has mandated a highly regarded sector analyst to cover the Company.
A review of the Company`s corporate profile is being carried out and is now
in the process of being updated by Q1 2012. The corporate profile will be
regularly up-to-dated and include industry peer benchmarking, while providing
continued analysis on the Company`s material activities to the market.
Cornerstone investor
Discussions have continued with a major listed mining and power company to
conduct due diligence on the project and further announcements will be made
in due course.
Outlook
The Company continues to focus resources on concluding terms with Eskom and
working to secure a satisfactory outcome with the proposed cornerstone
investor. The management of the joint venture are working closely and costs
are being kept to a minimum. The Company is confident of its positioning to
unlock value in the project.
FOR FURTHER INFORMATION:
David Knox
CEO
www.firestoneenergy.com.au
About Firestone Energy
Firestone Energy Limited is an independent, Australian exploration and
development company listed on the Australian Stock Exchange Ltd (ASX) and the
Johannesburg Stock Exchange (JSE). Firestone Energy has entered into a Joint
Venture with Sekoko Resources (Pty) Ltd through which Firestone Energy has
acquired the right to 60% participation interests in the Waterberg Coal
Project located in Lephalale area, Limpopo Province, South Africa.
The first stage of the project is to develop the Smitspan mine which has a
substantial measured thermal coal resource and to develop the Vetleegte mine
which is a substantial metallurgical coal deposit.
Firestone Energy is committed to becoming a profitable independent coal and
energy producer at its projects in South Africa, thereby making a substantial
contribution to the social and economic development of the Lephalale area and
South Africa.
Corporate Details
ASX: FSE
JSE: FSE
Issued Capital:
2,958 million ordinary shares
Major Shareholders:
Sekoko Resources (Pty) Ltd
Linc Energy Ltd
BBY Nominees Ltd
Bell Potter Nominees Ltd
Directors and Officers
Non Executive Directors:
Tim Tebeila (Chairman)
David Perkins (Deputy Chairman)
Dr Pius Kasolo
Mr Ben Mphahlele
Mr Kobus Terblanche
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
31 January 2012
Pretoria
Sponsor
River Group
Date: 31/01/2012 11:00:01 Produced by the JSE SENS Department.
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