29th Apr 2008 07:00
Coal of Africa Limited29 April 2008 COAL OF AFRICA LIMITED Q3 Report Coal of Africa Limited ('CoAL' or 'the Company') is pleased to announce itsoperational report for the quarter ended 31 March 2008. A full copy of thisreport, as released today on the ASX, is available at the Company's website,www.coalofafrica.com. Highlights • CoAL received Section 11 approval satisfying the last remaining condition for the acquisition of 70% of the Mooiplaats coal project. • CoAL reached agreement to acquire the remaining 30% of the Mooiplaats coal project. The cash portion of ZAR130 million of the acquisition price was paid during quarter and shareholder approval for the issue of 4.75 million shares to complete the transaction was obtained in April. • Signing of a co-operation agreement with Transnet Freight Rail for export rail capacity from CoAL's Baobab and Thuli projects commencing with rail capacity of 1 to 1.5 Mt PA in 2009 increasing to 10 Mt PA in 2012. • Draft mining contract received for the mining of the Mooiplaats coal project. • Completion of an Aeromagnetic study on the Baobab, Thuli and Tshikunda prospects. • Over 5,000 metres of drilling were completed on the Thuli coal project comprising 55 holes. • New Order Mining Right application for the Holfontein coal project submitted to the Department of Minerals and Energy. • Despite Nimag (Pty) Ltd's nickel magnesium alloy business continuing to experience tough trading conditions, the group generated an EBIT for the quarter of A$1.5 million. • Cash balance at the end of the quarter was A$63 million. Commenting on the results today, Simon Farrell, Managing Director of CoAL, said,"We are pleased to announce continued strong progress across the Company's coalprojects. Drilling at the Thuli project confirms our expectations of the coalreserves and we plan to submit Mining Right applications for both the Baobab andThuli projects by the middle of this year." DISCUSSION OF RESULTS Coal Activities Mooiplaats Coal Project (100% on completion in April) During the quarter, CoAL received consent in terms of Section 11(1) of theMinerals and Petroleum Resources Development Act satisfying the last conditionto complete the acquisition of 70% of the Mooiplaats coal project. CoAL paid theremaining acquisition price of GBP10 million and issued 4.44 million shares forthe acquisition taking its interest in the project to 70%. Furthermore, theCompany reached agreement to acquire the remaining 30% interest in the projectfor ZAR130 million in cash and 4.75 million CoAL shares. The issue of theseshares required shareholders' approval which was obtained in April. Management expect that mining will commence towards the end of the third quarterof this year and production will start in the following quarter. Limited accessto the project site has led to a short delay in the development of the project.Discussions with the surface rights owner, allowing access to the site, havebeen ongoing and are expected to be finalised by the end of April. A draft mining contract has been received, the terms of which are anticipated tobe finalised by the end of May. Additional production related drilling has beencommissioned to confirm data for the geological model to identify the best sitefor the Beta decline on the farm Klipbank. New Order Prospecting Rights have also been executed for farms neighbouring theMooiplaats project. The Prospecting Rights for the farms De Emigratie,Willemsdal and Klipfontein have an area of 9,260 Ha and the Directors believethat they may add significant additional coal resources to the project. Discussions with potential off-take customers continued during the quarter andincluded the potential export of lean coal to Europe. Negotiations with Transnetregarding rail allocation for Richards Bay export coal together with portallocation agreements are expected to be finalised in the June quarter. Baobab Coal Project (100%) A detailed Aeromagnetic survey encompassing over 60,000 Ha of the Baobab, Thuliand Tshikunda project areas was undertaken during the quarter and was completedin April. During the survey, the helicopters used to collect the data will haveflown more than 19,000 kilometres. The results of the survey will be used in anin-depth geophysical analysis to be undertaken in the June quarter. Digitisation of the exploration data acquired from Exxaro Limited earlier in theyear continued during the quarter under review. The information obtained fromthe data correlates with Management's expectations and will be included in anupdated resource statement to be released later this year. Detailed analysis has been completed on the selection of mineable coal horizonswithin the 35 metre thick coal seam. This analysis will be used in thegeological modelling and resource estimation that will be performed in the nextquarter. This exercise is expected to optimise the coal horizon being minedleading to higher coking coal yields. Large diameter core drilling sites were prepared during the quarter allowing forthe commencement of the large diameter core drilling in the June quarter. Thisdrilling programme will yield samples for detailed petrochemical as well asother coal parameter testing. A further 5,000 metre smaller diameter drillingprogramme will be undertaken in the June quarter to define the coal outcropzones and identify any dolerite intrusions. East Coast Maritime (Pty) Ltd continued with Phase Two of the infrastructurestudy resulting in CoAL signing a Rail Cooperation Agreement with TransnetFreight Rail ('TFR'), the largest division of Transnet, the South AfricanGovernment owned rail and freight organisation. The Rail Cooperation Agreementformalises interaction between CoAL and TFR whereby TFR will assist the Companyto obtain the correct rail slots, appropriate rolling stock as well ascommercially competitive freight rates for the transportation of its export coalto the Richards Bay and Maputo ports. CoAL has indicated to TFR that it willneed railway capacity for the following export tonnages: • 2009 - 1 to 1.5 Mt PA • 2010 - 4 to 5 Mt PA • 2011 - 4 to 5 Mt PA • 2012 - 10 Mt PA Thuli Coal Project (Limpopo) (74%) LudikCore (Pty) Ltd and GeoMechanics (Pty) Ltd continued drilling on the ThuliCoal Project and by the end of March had drilled over 5,000 metres comprisingsome 55 holes. The remainder of the drilling programme consists of 15 holes,which will be completed in the June quarter. Furthermore, CoAL acquired theoriginal drilling data from the exploration undertaken by Southern Sphere (UtahMining) in the early 1980's. During March, the data was converted to digitalformat, validated and progress made on the modelling of the data. The drilling programme together with the data acquired will result in thecurrent exploration programme delivering a JORC/ SAMREC compliant 'Indicated'resource, upgrading the previously reported 'Inferred' resource. Management areconfident that portions of the prospect will be in a JORC/SAMREC compliant 'Measured' status as the current exploration programme is confirming the resultsof the earlier Southern Sphere exploration programme. Holfontein Coal Project (100%) During the March quarter, the New Order Mining Right application for theHolfontein project was submitted to the Department of Minerals and Energy.Exploration on the project continued with over 6,500 metres drilled sinceFebruary, including the portion of Holfontein and the portions ofWildebeesfontein recently acquired. The drilling programme will be completedduring the current quarter and is expected to result in a JORC/SAMREC compliant'Measured' resource. During the quarter, third parties approached the Companywith regards to acquiring a significant stake in the project; the Directors arecurrently assessing these offers. Nimag Group of Companies (100%) The Nimag Group's profit before interest and tax for the nine months was ZAR14.7million (A$2.3 million). The nickel magnesium business continued to experiencetough trading conditions in the form of thinner margins and increased workingcapital requirements but was able to improve significantly on the first sixmonths' results. The smaller Ferro Silicon business operated well ahead ofexpectations contributing to the Group's profitability to date. Authorised by Simon Farrell Managing Director 29 April 2008 For more information contact: Simon Farrell, Managing Director CoAL +61 417 985 383 or +61 8 9322 6776 Petronella Gorrie The Event Shop +27 82 827 8815 Jos Simson/Leesa Peters Conduit PR +44(0) 20 7429 6603 Olly Cairns / Romil Patel Blue Oar Securities Plc +61 8 6430 1631 / +44(0) 20 7448 4400 www.coalofafrica.com Mining exploration entity quarterly report Name of entityCoal of Africa Limited (previously GVM Metals Limited) ABN Quarter ended ("current quarter")98 008 905 388 31 March 2008 Consolidated statement of cash flows Current quarter Year to dateCash flows related to operating activities $A'000 (9 months) $A'0001.1 Receipts from product sales and related debtors 12,094 34,336 1.2 Payments for (a) exploration and (1,273) (7,954) evaluation (b) development (c) production (11,925) (39,986) (d) administration (1,944) (7,856)1.3 Dividends received - -1.4 Interest and other items of a similar nature 2,106 2,747 received1.5 Interest and other costs of finance paid (73) (148)1.6 Income taxes paid (1,558) (1,570)1.7 Other - - Net Operating Cash Flows (2,573) (20,431) Cash flows related to investing activities1.8 Payment for purchases of: (a)prospects (51,038) (92,763) (b)equity investments - - (c) other fixed assets (62) (744)1.9 Proceeds from sale of: (a)prospects - - (b)equity investments - 497 (c)other fixed assets - -1.10 Loans to other entities - -1.11 Loans repaid by other entities - -1.12 Other (provide details if material) - (1,860) Net investing cash flows (51,100) (94,870)1.13 Total operating and investing cash flows (53,673) (115,301) (carried forward) 1.13 Total operating and investing cash flows (53,673) (115,301) (brought forward) Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. - 116,939 (net) -see note 7.4 below1.15 Proceeds from sale of forfeited shares - -1.16 Proceeds from borrowings - -1.17 Repayment of borrowings - -1.18 Dividends paid - -1.19 Other (Exchange rate related movements in foreign borrowings and reserves) Net financing cash flows - 116,939 Net increase (decrease) in cash held (53,673) 1,638 1.20 Cash at beginning of quarter/year to date 116,968 61,5301.21 Exchange rate adjustments to item 1.20 (363) (236)1.22 Cash at end of quarter 62,932 62,932 Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the relatedentities Current quarter $A'000 1.23 Aggregate amount of payments to the parties included in item 1.2 180 1.24 Aggregate amount of loans to the parties included in item 1.10 - 1.25 Explanation necessary for an understanding of the transactions Non-cash financing and investing activities 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows Issuing of 4,444,445 shares as part consideration for acquisition of the Mooiplaats coal project. 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest Financing facilities available Add notes as necessary for an understanding of the position. Amount available Amount used $A'000 $A'0003.1 Loan facilities - - 3.2 Credit standby arrangements 4,718 1,787 Estimated cash outflows for next quarter $A'0004.1 Exploration and evaluation (2,500) 4.2 Development (1,500) Total (4,000) Reconciliation of cash Reconciliation of cash at the end of the quarter Current quarter Previous quarter(as shown in the consolidated statement of cashflows) to the related items in the accounts is as $A'000 $A'000follows.5.1 Cash on hand and at bank 3,612 2,3935.2 Deposits at call 61,107 118,3575.3 Bank overdraft (1,787) (3,782)5.4 Other (provide details) - - Total: cash at end of quarter (item 1.22) 62,932 116,968 Changes in interests in mining tenements Tenement reference Nature of Interest at Interest at interest beginning of end of (note (2)) quarter quarter 6.1 Interests in mining tenements relinquished, reduced or lapsed 6.2 Interests in mining Tenement reference Nature of Interest at Interest at tenements acquired or interest beginning of end of increased (note (2)) quarter quarter - - - - Issued and quoted securities at end of current quarter Description includes rate of interest and any redemption or conversion rightstogether with prices and dates. Total number Number quoted Issue price per Amount paid up per security (see note security (see note 3) 3) (cents) (cents)7.1 Preference +securities (description)7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs, redemptions7.3 +Ordinary 301,873,917 301,873,917 securities7.4 Changes during quarter (a) Increases through issues 4,444,445 4,444,445 30 pence 30 pence (b) Decreases through returns of capital, buy-backs7.5 +Convertible debt securities (description)7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted7.7 Options Exercise price Expiry date (description and conversion 23,252,263 23,252,263 See Note 6 See Note 6 factor)7.8 Issued during Nil Nil Exercise price Expiry date quarter See Note 6 See Note 67.9 Exercised during Nil Nil Nil Nil quarter7.10 Expired during Nil Nil quarter7.11 Debentures (totals only)7.12 Unsecured notes (totals only) Compliance statement 1 This statement has been prepared under accounting policies whichcomply with accounting standards as defined in the Corporations Act or otherstandards acceptable to ASX (see note 4). 2 This statement does give a true and fair view of the mattersdisclosed. Sign here: ...............................................Date: 29 April 2008 (Director) Print name: Simon Farrell Notes 1 The quarterly report provides a basis for informing the market howthe entity's activities have been financed for the past quarter and the effecton its cash position. An entity wanting to disclose additional information isencouraged to do so, in a note or notes attached to this report. 2 The "Nature of interest" (items 6.1 and 6.2) includes options inrespect of interests in mining tenements acquired, exercised or lapsed duringthe reporting period. If the entity is involved in a joint venture agreementand there are conditions precedent which will change its percentage interest ina mining tenement, it should disclose the change of percentage interest andconditions precedent in the list required for items 6.1 and 6.2. 3 Issued and quoted securities: The issue price and amount paid upis not required in items 7.1 and 7.3 for fully paid securities. 4 The definitions in, and provisions of, AASB 1022: Accounting forExtractive Industries and AASB 1026: Statement of Cash Flows apply to thisreport. 5 Accounting Standards ASX will accept, for example, the use ofInternational Accounting Standards for foreign entities. If the standards useddo not address a topic, the Australian standard on that topic (if any) must becomplied with. 6 Issued and Quoted Securities as at 31 March 2008: Number Issued Number Quoted Exercise Price Expiry Date Lapsed Since End of quarter 13,500,000 - A$0.50 30 September 2011 - 555,575 - GBP0.54 31 May 2009 - 196,688 - GBP0.34 17 May 2009 - 7,000,000 - A$1.25 30 September 2012 - 1,625,000 - GBP0.65 30 November 2009 - 375,000 - A$1.50 30 November 2009 - This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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