Final Results

30th Sep 2009 09:40



Coal of Africa Limited

(previously "GVM Metals Limited")

(Incorporated and registered in Australia)

(Registration number ABN 008 905 388)

ISIN AU000000CZA6

JSE/ASX share code: CZA

(`CoAL` or `the Company`)

Audited Final Results for the Year Ended 30 June 2009

Coal of Africa Limited the AIM/ASX/JSE listed coal development company operating in South Africa, is pleased to announce its audited final results for the year ended 30 June 2009. 

Despite the global financial crisis, the year ended 30 June 2009 followed on from the successes of the previous year as the Company progressed from an explorer and developer, to a mining company. The considerable cash resources raised in the previous year allowed the Company to focus on the development of the Mooiplaats thermal coal project in the Mpumalanga Province, South Africa ("Mooiplaats Project") and bring a greenfield project into production under budget and in less than a year.

Highlights included:

Upgrade of resources at the Makhado coking coal project in the Limpopo Province, South Africa ("Makhado Project") to 1.33 billion tonnes (400 million "measured") and at the Vele coking coal project, also in the Limpopo Province ("Vele Project") to 721 million tonnes (158 million "measured" and 324 million "indicated");

 

Production of first coal at the Mooiplaats Project in November 2008;

 

Rail allocation secured from Transnet Freight Rail;

 

Agreement reached with Grindrod Limited ("Grindrod") to secure port capacity at the Matola terminal in Maputo, Mozambique ("Matola Terminal"), initially 3 million tonnes per annum ("mtpa") and ultimately 13 mtpa;

 

Selection of MCC Contracts, a division of Equestra Holdings, as preferred partner for the Vele Project's opencast mining operations;

 

Mooiplaats Project coal handling and preparation plant ("CHPP") commissioned in May 2009; and

 

ELB Engineering Services contracted to build the first CHPP at Vele.

The full Annual Report will be posted to shareholders and is available on the Company`s website www.coalofafrica.com 

For more information contact:

Simon Farrell, Managing Director GVM 

+61 417 985 383 or +61 8 9322 6776

 

Operational review

During the year, the operations of the Company included:

Mooiplaats Project, based in the Mpumalanga Province;

 

Vele Project, based in the Limpopo Province;

 

Makhado Project, based in the Limpopo Province; 

 

Polokwane CoaL Laboratory, based in the Limpopo Province; and

 

Holfontein thermal coal project, based in the Mpumalanga Province ("Holfontein Project").

The mining technical team was restructured at the start of the financial year to improve role clarity and accountability. Key skills were also added, ensuring in-house capacity in all key areas of operation.

Mooiplaats Thermal Coal Project (100%)

The Mooiplaats Project was developed from a site consisting of only farmland and an abandoned box-cut at the start of the year under review, to an operational mine by the end of the year. Surface facilities commissioned included a fully functional coal handling and preparation plant.

Safety management of the site was exemplary, with in excess of 400 000 lost time incident free man-hours achieved during the high-risk construction phase up to the end of March 2009, with more than 500 contractors' staff present on site during this period. Sadly, in July 2009, two contractor employees were fatally injured in an accident resulting from the unlawful access to and use of a vehicle by an unlicensed contractor. Immediately following the accident, operations were halted for three days whilst investigations were conducted by inspectors and mine officials of the South African Department of Mineral Resources ("DMR"). Reassuringly, the results of the official inquiry indicated no substantial breaches by the Company, but suggested legal prosecution of the driver and several contractors' officials.

Following the successful dewatering, de-silting and deepening of the box-cut to the floor of coal, the first continuous miner began cutting coal in November 2008. The inclined conveyor infrastructure was completed whilst mining portals were being established, thereby enabling mining development to continue whilst the CHPP was being constructed.

Although the region experienced above average rainfall during the summer, causing delays to civil construction, the project management team and contracting firms were able to minimise delays to the overall schedule, and the plant was successfully commissioned in May 2009. The second module of the plant is currently under construction, with commissioning expected by November 2009. This will increase capacity from 110,000 to 220,000 run of mine ("ROM") tonnes per month. 

While good progress was made in the mining of initial underground coal access, progressively more adverse geological conditions were experienced, leading to an extensive reassessment of the geological structure and its potential effect on the mining layout. Additional surface drilling and wireline logging, supported by underground horizontal drilling, led to a better understanding of detailed geological structure and subsequent adjustment of the mining layout. Mining development continues through lean coal areas in two mining areas, one utilising a Sandvik road header to progress through a faulted and steeply dipping area and associated stone layers, and the other utilising a JOY continuous miner. By the end of June 2009, approximately 3,400 metres had been cut, yielding close to 50,000 tonnes of coal. The current lean coal mining rate averages 30,000 tonnes per month, which can be increased to 80,000 tonnes per month if required by the market. The intensified geological drilling program has also proven closer proximity to the bituminous coal zone in one area, which is anticipated to be reached by end of the calendar year. The Company has meanwhile taken delivery of three full sets of mining equipment, which will allow rapid build up of production as soon as the bituminous coal zone is reached.

The mid-volatile coal product currently produced by the CHPP is transported to the nearby Umlabo siding, which CoAL has negotiated access to from SA Coal Mining Holdings Limited, and several train loads have been railed to the Matola Terminal, in preparation for shipment to a customer by Q4 2009. Development of the Overvaal siding, which is situated some 8km from the Mooiplaats Project along the CoalLink railway line to Richard's Bay and will form the long term rail loading point, is expected to commence in 2010.

An application to amend the current New Order Mining Right ("NOMR") as well as the supporting environmental management plan ("EMP") to include the farms Klipbank and Adrianople, has been lodged with the DMR in Mpumalanga. This will allow the development of the south decline in order to increase the life of the mine. Meanwhile, the Company has also entered into negotiations with parties holding rights to areas contiguous to the Mooiplaats North area, which will lead to the extension of mining life in that area.

Mooiplaats is well on its way to building up production to 1.7 million ROM tonnes in 2010 and approximately 3 mtpa in 2011.

Vele Coking Coal Project (74%, Signed Purchase Agreements for 26%)

Significant progress was made on the Vele Project during the year, and the Company is expecting the NOMR to be granted by the DMR by the end of September 2009. The Company plans to implement the Project in two phases. Phase 1 will comprise the establishment of a modular coal treatment plant with capacity to deliver approximately 1 million saleable tonnes of blend coking coal per annum, with ROM coal planned to be sourced from opencast mining. Because of the modular nature of this plant, capacity may be doubled, dependant on market conditions. Phase 2 will require the construction of the full-scale coal treatment plant (the design of which has been completed by Dowding Reynard & Associates) to deliver 5 million tonnes of blend coking coal per annum, at which point the underground operation will be established. 

The NOMR application, consisting of a mine works program ("MWP") and social and labour plan ("SLP"), was submitted to the DMR in Limpopo in November 2008, followed by the environmental impact assessment ("EIA") scoping report in December 2008. Following this period, extensive consultation was conducted with interested and affected parties ("IAP's") whilst the EIA was being carried out by a group of specialist consultants, each covering their respective areas of expertise as required by the scoping report. The process culminated in a widely publicised open day, held at a site near the Project area in April 2009, which was attended by more than 170 persons representing various interest groups. The comments received during this session, as well as from the IAP consultation process, were taken into account in preparation of the EMP, which was then submitted to the DMR in mid-May with the EIA documents, together comprising more than 2,200 pages. 

Some environmental groups have stated their opposition to the Vele Project due to the sensitive nature of the area and the proximity of the Project to the Mapungubwe World Heritage Site and National Park. The Company is confident, however, that it has addressed concerns and designed sufficient mitigation into the mining layout and processes to ensure co-existence with eco-tourism and agriculture in the area. The Project will introduce much needed investment, employment and economic growth into one of the poorest regions of South Africa. The dual benefits of reduced imports by ArcelorMittal, as well as potential exports from the Project to the national balance of payments, also cannot be underestimated.

Capital expenditure to date consists mainly of land purchases to access surface mining areas and accommodate critical infrastructure, as well as investment in the development of a modular coal wash plant. The latter has been designed by ELB Engineering in conjunction with PBA Projects, based on designs used in the marine diamond mining industry, and will have the capacity to generate 1 million blend coking coal saleable tonnes per annum. As discussed earlier, plant capacity can be rapidly doubled, dependent on market demand. Built and pre-commissioned off-site before being transported for assembly at the mine site, the plant can be deployed and commissioned within three months after access to site is made possible, in this case by the granting of a mining licence. Phase 1 capital requirement is estimated at ZAR350 million, whilst the establishment of the full-scale mine is expected to cost in the region of ZAR3 billion.

Geological drilling continued to improve confidence in the structure and quality of the mineable resources at Vele, supported by the completion of 3 large diameter drilling sites, aeromagnetic interpretation and geotechnical assessment. Coal resources are currently indicated at some 721 million tonnes, of which approximately 158 million tonnes has been proven to measured status.

A project feasibility report has recently been completed by GRD Minproc. An exercise was concluded early in 2009 to select a preferred opencast mining contractor, leading to the appointment of MCC Contracts ("MCC") in this capacity. MCC is one of the largest mining contractors in South Africa, with a significant mining equipment fleet available for rapid deployment and expansion as required, releasing the Company from the burden of acquiring mining equipment and reducing the capital requirements of the Project. 

The Company has recently concluded agreements to acquire the remaining 26% of the Vele Project to bring its ownership to 100%.

Makhado Coking Coal Project (100%)

During the year, the Company continued with its planning of the Makhado Project, underpinned by extensive geological exploration and modelling. Coal samples are currently being assessed at the Company's newly commissioned laboratory in Polokwane.

This Project will comprise an opencast mine, planned to deliver 5 million tonnes of hard coking coal product per annum at full output. A similar phased approach to that of Vele, utilising a modular coal processing plant, may also be applied at Makhado. Current indications are that a modular plant first phase with a capacity of 1 million tonnes of hard coking coal product per annum, will require investment in the order of ZAR500 million, compared to some ZAR2.7 billion required for the full-scale project. 

Geological exploration drilling increased the measured resource base to some 400 million tonnes of the total resource, indicated at 1.3 billion tonnes. Surface rights were obtained for the farm Tanga, and the mining exploration camp relocated to Tanga from Fripp. Drilling of the first large diameter bulk sampling site was completed on the farm Tanga, which is also the site for which application for the mining of a coal bulk sample has been made to the Limpopo office of the DMR. This is expected to yield 1,000 tonnes of coking coal for analysis by ArcelorMittal in their coking ovens. Exploration drilling also confirmed the presence of other coal horizons in the overburden of the deeper coal to the North of the proposed open cut and a substantial resource upgrade is anticipated in 2010.

NOMR application documents are currently being finalised and prepared for submission to the DMR, which will be done as soon as section 11 approvals have been received for the transfer of prospecting rights between CoAL and Rio Tinto in terms of the agreed prospecting rights swap.

Polokwane CoAL Laboratory (100%)

Following the Company securing access to an unused abattoir site, the construction of a world class analytical coal laboratory in Polokwane commenced in April 2009. The facility is being managed by the international laboratory group, Inspectorate, ensuring cost effective operation and required accreditation. Most of the planned facilities have been commissioned, and exploration drilling core samples for Vele and Makhado started being processed in August 2009. ArcelorMittal has also recently indicated its desire to be a 50% partner in the laboratory.

Holfontein Thermal Coal Project (100%)

During the year, the Company received section 11 approval for Motjoli Resources (Pty) Ltd to transfer 51% of the Holfontein Project to CoAL, whilst discussions regarding the granting of the NOMR continued with the DMR. The Company remains confident that the NOMR will be granted in the near future. 

The Holfontein Project continues to be classified as an asset available for sale.

IPP Submissions Pre-Qualified by Eskom

CoAL's independent base load generation tenders for the Vele and Makhado Projects, submitted jointly with Independent Power Producers ("IPP"), whereby the IPP will supply Eskom with base load power, have been unconditionally pre-qualified by Eskom. 

The submission to supply coal to the proposed IPP located close to the Vele Project was made jointly with Mulilo Energy (Pty) Ltd and China Railway Construction Corporation, and with AES Energy Developments for an IPP in proximity of the Makhado Project. In both cases, the coal supplied would be a "middlings" product, a lower quality coal produced additional to the coking coal. The economics of the Vele and Makhado Projects are not reliant on the sale of the middlings fraction but, if successful, such sales would provide substantial upside to these Projects.

Port Allocation

The Company secured long term port allocation for the export of coal mined at the Mooiplaats Project through the Richard's Bay dry bulk terminal ("Richard's Bay Terminal"), operated by Grindrod. The throughput agreement provides CoAL with an allocation of 900,000 tonnes of coal per annum, commencing in 2009, and includes the potential to increase its export capacity to 3 mtpa once the terminal expansion is complete. In return, CoAL will participate in the funding of the expansion. 

Furthermore, CoAL has secured long term port allocation through the Matola Terminal in Maputo, Mozambique and expects that the export of metallurgical coal mined at its Makhado and Vele Projects will take place via this terminal. The agreement with Terminal De Carvao Da Matola Limitada and Grindrod provides for an allocation of 1 mtpa through the Matola Terminal, commencing in 2009, and CoAL has secured the rights to up to 100% of any increased capacity at the Matola Terminal in return for the Company participating in the funding of the expansion. The first phase of Grindrod's intended two phase expansion of the terminal will increase CoAL's export capacity to 3 mtpa and on completion of the second phase of expansion, CoAL will have a total capacity of 13 mtpa of the terminal's annual 16 mtpa capacity.

During February 2009, the Company agreed to loan the required US$20 million for the proposed 2 mtpa expansion at the Matola Terminal, which will increase CoAL's export allocation at the port to 3 mtpa. The increased port capacity is expected to be effective from 1 August 2010 and discussions with TFR to secure an additional 2 mtpa rail capacity are ongoing. 

Rail Allocation Secured for Coking Coal Projects

Agreement was reached with Transnet Freight Rail ("TFR"), a division of Transnet, the South African Government owned rail and freight organisation, for the rail allocation of 1 mtpa to the Matola Terminal. This rail allocation matches the Company's current port allocation of 1 mtpa through the Matola Terminal. 

Negotiations with TFR for rail services for the transport of coal to the Richard's Bay Terminal were completed and the Company secured a five year rail agreement for the movement of coal from its Mooiplaats Project to the Terminal. TFR has allocated CoAL the current empty wagons returning from ArcelorMittal's Vanderbijl Park steel works, ensuring the Company will be able to satisfy its initial 900,000 tonne dry bulk terminal port allocation at the Richard's Bay Terminal.

The Company successfully railed over 38,000 tonnes of third party coal to the Matola Terminal during the year. Of the coal railed, over 22,000 tonnes were shipped from the Terminal during the period, ensuring the viability of this export route as an alternative to the Richard's Bay Terminal.

Imaloto Coal Project in Madagascar (50%)

During the year, the Company acquired 50% of the interest in the Imaloto Project located in the Massabi Basin in Madagascar. The interest comprises 25 blocks of 6.5km2 each. Exploration on the Project commenced during the period and by year end, Phase 1 of the exploration programme on the North portion of the Project, comprising over 2,522m, had been drilled and yielded bright to intermediate coal seams. Coal samples have been sent for analysis and results are expected shortly.

NiMag Group ("NiMag") (100%)

NiMag is engaged principally in the manufacture and distribution of nickel magnesium alloys, ferro silicon magnesium alloys and metal fibres, having begun producing alloys in 1962, and currently manufactures specialised master alloys of nickel and magnesium for the specialised foundry industry including aerospace, aeronautical, motor, steel mill roll and associated industries. 

Ductile iron (also called spheroidal graphite iron or nodular cast iron) was discovered in the 1940's. The introduction of magnesium into the melt results in nodular rather than flaky graphite in the resultant cast iron, giving the cast iron properties approaching those of steel, while maintaining the advantages of the casting process. The magnesium is usually added as a nickel alloy, making it easier to add and contribute to product quality. NiMag supplies the ductile iron market as a specialist supplier with a world market share of about 35% in its core product line. 95% of sales are exported through 35 distributors world wide. Demand for NiMag's alloys is proportional with world demand for ductile iron, principally for automotive parts and industrial machinery. Demand for NiMag products has grown gradually to meet current capacity of 287 tonnes per month (all products). Potential for expansion of the core nickel-magnesium alloy product is presently limited by the size of end markets. NiMag is increasing the penetration of a variety of other products developed for alternative markets. NiMag produces cast and slit fibres which are used in reinforced concrete by domestic mining and tunnelling operations.

NiMag's competitive advantages include low electricity and labour costs. The main input cost is locally sourced nickel raw material, which is matched with sales to minimise nickel price exposure.

Significant depreciation of global nickel prices in the 2009 financial year reduced NiMag's margins as well as volumes, resulting in the Company generating lower operational cash flows than those recorded in the previous year. NiMag recorded a loss of $2.6 million for the year, primarily due to a $1.7 million loss as a result of the revaluation of nickel inventory.

Events Subsequent to Balance Sheet Date

Mooiplaats Project Update

CoAL confirmed in early July that a revised mining layout had been finalised following an extensive reassessment of the mine plan and geological conditions at Mooiplaats. Depending on the rate of development, export quality thermal coal is now expected to be reached in November 2009 at the earliest. There has been no material amendments to the anticipated tonnage schedules of the Project's Life of Mine. Forecast ROM production for the next five years is as follows:

Calendar year	2010	2011	2012	2013	2014
ROM Production	1.7m	2.7m	3.1m	3.4m	3.2m

Operations at the Mooiplaats Project are currently producing 30,000 ROM tonnes per month of a mid volatile "lean" coal. In the event of an off-take agreement for this coal being finalised, production can be ramped up to over 80,000 tonnes per month. The Company has already reached agreement on terms and conditions for the off-take of the export quality thermal coal to be produced at the Mooiplaats Project.

Vele Project Update

In early July 2009, CoAL confirmed that it will develop its Vele Project in two phases:

Phase 1 - the establishment of a modular coal treatment plant with the ability to deliver approximately 1 million saleable tonnes (yield dependant) of coking coal per annum. The capacity of the modular plant can be doubled should ArcelorMittal wish to increase its off-take from the Vele Project, as indicated in the letter of intent signed in April 2008.

Phase 2 - this phase will deliver the planned full capacity of 5 million tonnes of saleable coking coal per annum from the Vele Project and the implementation thereof will be dictated by market conditions.

Phase 1 will be launched on approval of the NOMR Application submitted to the DMR in November 2008. 

First Train Loaded at Mooiplaats

In mid-September, the Company successfully completed its first sale and loaded its first train of mid volatile "lean" coal mined at the Mooiplaats Project. The coal was trucked from the mine to the Umlabo siding, from where it was railed to the Matola Terminal in Maputo, Mozambique. Further trains will continue to be loaded to utilize the maximum stockpile of approximately 80,000 tonnes at the Matola Terminal. Shipping is expected to commence in Q4 2009. 

Makhado Project Update

In July 2009, CoAL announced that it is progressing with the planning of its Makhado Project. The full scale production plan is based on the production of 5 mtpa of coking coal and a phased modular approach, similar to that used at the Vele Project, may be applied at the Makhado Project. A phased approach will lower initial capital requirements, enabling CoAL to self-fund the build up into a full capacity mine. The phased approach or full scale development of the mine will be determined by market conditions and the Company has prepared the documentation required for the NOMR Application to be submitted to the DMR. This application will be submitted once the Section 11 approval for the swap of NOPR with Rio Tinto has been granted by the DMR.

Acquisition of 26% Interest in Limpopo Coal

During July 2009, CoAL executed two binding agreements to collectively secure the remaining 26% interest in Limpopo Coal Company (Pty) Ltd, the subsidiary company that owns the Vele Project. Satisfaction of the suspensive conditions pertaining to the agreements will take CoAL's interest in the Vele Project to 100%. The consideration payable for acquisition of the 20% interest is 5,625,750 fully paid ordinary shares while 1,990,000 fully paid ordinary will secure the remaining 6% interest.

Black Empowerment Transaction

On 13 June 2008, CoAL entered into an agreement with Coal Investments Limited ("CIL"), pursuant to which CIL subscribed for shares and was granted an option which, if exercised, would result in African Global Capital I, L.P. ("AGC") and their affiliates holding in excess of 26% of the Company, ensuring full compliance with South African legislative requirements for broad based black empowered ("BBBEE") groups to have at least a 26% interest in mining companies by 2014. 

On 30 September 2009, the Company announced that it had entered into a further agreement that replaced the abovementioned agreement with CIL. Pursuant to the new agreement, CoAL has agreed to issue a total of 50 million options exercisable at 60 pence each, expiring five years from the date of issue to Firefly Investments 163 (Pty) Ltd ("Firefly") which is wholly owned and controlled by historically disadvantaged South Africans. The options will be issued to Firefly, subject to Firefly not being able to exercise the options for a period of 12 months from the issue thereof. In addition, the issue of the options will be subject to certain regulatory approvals, including consent of the Australian Foreign Investment Review Board. The "in the money" options will represent approximately 10.85% of CoAL's issued capital upon being converted into ordinary shares. Firefly will also have the right to nominate two persons to the CoAL Board.

Appointment of a Non-Executive Director

At the end of August 2009, the Company announced the appointment of Mr Hendrik ("Kobus") Verster as ArcelorMittal's nominee non-executive Director to the CoAL Board. Mr Verster replaced Mr Pierre Leonard, who stepped down from the Board as non-executive Director.

INCOME STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

	Consolidated Entity		Parent Entity
	2009	2008	2009	2008
	$	$	$	$
REVENUE	35,764,074	53,774,119	20,979,810	6,030,020
Raw materials and consumables used	(20,767,481)	(37,846,682)	-	-
Consulting expenses	(2,077,698)	(1,216,068)	(696,644)	(720,823)
Employee expenses	(8,015,315)	(7,830,254)	(1,867,059)	(4,992,443)
Borrowing costs	(127,427)	(146,174)	-	-
Depreciation & Amortisation expenses	(3,982,844)	(202,372)	(5,352)	(27,430)
Office rental , outgoings and parking	(1,313,820)	(477,272)	(553,734)	(112,104)
Decrease/(increase) diminution in value of investments	(2,332,074)	-	(1,502,382)	-
Loss on investments disposed of	(68,385)	-	-	(7,919)
Bad debt expense	(11,181)	-	(11,180)	-
Provision for non-recoverability of loans/ debtors	(392,078)	-	-	-
Impairment in value of control entities/ goodwill	(1,125,000)	-	-	-
Foreign exchange profit/(loss)	1,702,260	(10,503,875)	3,468,801	(10,503,875)
Other expenses from ordinary activities	(7,511,128)	(5,875,381)	(1,968,813)	(555,355)
Take or Pay obligations	(3,945,804)	-	(3,945,804)	-
Profit/(Loss) before income tax (expense)/benefit	(14,203,901)	(10,323,959)	13,897,643	(10,889,929)
Income tax (expense) / benefit	(316,075)	(919,604)	(318,284)	-
Profit/(Loss) after tax	(14,519,976)	(11,243,563)	13,579,359	(10,889,929)
Outside equity interest	-	-	-	-
Net profit/(loss) attributable to members of the parent entity	(14,519,976)	(11,243,563)	13,579,359	(10,889,929)
Basic earnings/(loss) per share (in cents)	(3.55)	(4.08)
Headline earnings/(loss) per share (in cents)	(2.76)	(4.12)

BALANCE SHEETS AS AT 30 JUNE 2009

	Consolidated Entity		Parent Entity
	2009	2008	2009	2008
	$	$	$	$
CURRENT ASSETS
Cash assets	87,032,875	252,004,859	85,471,992	251,347,737
Receivables	21,525,145	11,751,597	6,547,986	1,288,245
Inventory	8,614,773	4,885,106	-	-
Other current assets	4,423,964	-	26,259	20,572
TOTAL CURRENT ASSETS	121,596,757	268,641,562	92,046,237	252,656,554
NON CURRENT ASSETS
Receivables	-	-	156,083,855	53,152,477
Assets held for sale	25,540,957	25,207,997	23,529,228	23,649,738
Intangibles	3,706,781	3,169,660	-	-
Other financial assets	23,598,640	8,099,845	232,940,524	173,019,725
Property, plant and equipment	98,894,360	3,075,970	13,614	10,964
Development Expenditure	19,432,007	-	-	-
Deferred tax assets	53,526	187,475	-	-
Mining assets	186,120,103	174,932,316	-	-
Logistics assets	43,184,441	-	43,184,441	-
Exploration expenditure	15,540,310	18,203,831	3,752,291	8,992,517
TOTAL NON CURRENT ASSETS	416,071,125	232,877,094	459,503,953	258,825,421
TOTAL ASSETS	537,667,882	501,518,656	551,550,190	511,481,975
CURRENT LIABILITIES
Payables	11,031,549	6,179,806	4,257,337	308,946
Provisions	262,081	111,738	10,395	2,734
Current tax liability	350,416	581,338	318,284	-
TOTAL CURRENT LIABILITIES	11,644,046	6,872,882	4,586,016	311,680
NON CURRENT LIABILITIES
Payables	-	-	5,670,417	19,022,676
Interest bearing liabilities	-	187,626	-	-
Provisions	2,383,801	-	-	-
TOTAL NON CURRENT LIABILITIES	2,383,801	187,626	5,670,417	19,022,676
TOTAL LIABILITIES	14,027,847	7,060,508	10,256,433	19,334,356
NET ASSETS	523,640,035	494,458,148	541,293,757	492,147,619
EQUITY
Contributed equity	569,267,119	533,053,005	569,267,119	533,053,006
Reserves	7,189,525	4,270,160	9,013,216	9,660,550
Accumulated losses	(60,456,243)	(45,936,267)	(36,986,578)	(50,565,937)
TOTAL PARENT EQUITY INTEREST	516,000,401	491,386,898	541,293,757	492,147,619
OUTSIDE EQUITY INTEREST	7,639,634	3,071,250	-	-
TOTAL EQUITY	523,640,035	494,458,148	541,293,757	492,147,619

CASH FLOW STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

	Consolidated Entity		Parent Entity
	2009	2008	2009	2008
	$	$	$	$
Cash flows from operating activities
Interest received	13,653,573	4,502,639	12,732,776	3,971,998
Cash receipts in the course of operations	20,400,464	49,252,248	-	-
Interest paid	(127,427)	(146,174)	-	-
Payments to suppliers and employees	(44,717,527)	(56,618,474)	(4,661,447)	(2,212,535)
Net cash generated by /(used in) operating activities	(10,790,917)	(3,009,761)	8,071,329	1,759,461
Cash flows from investing activities
Payments for property, plant and equipment	(83,262,594)	(1,951,879)	(8,002)	(9,260)
Proceeds from the sale of property, plant and equipment	434,979	-	-	-
Payments for Development Assets	(9,173,789)	-	-	-
Payments for Surface Rights	(16,487,811)	-	-	-
Mineral assets acquired	(7,743,534)	(85,341,442)	(7,743,534)	(85,341,442)
Proceeds from sale of associate	-	501,634	-	501,634
Sundry deposits paid	(4,423,964)	-	-	-
Payments for equity investments	(11,704,052)	(9,427,131)	(6,163,552)	(2,836,444)
Payments made for logistics assets	(43,184,441)	-	(43,184,441)	-
Loans (made to)/from other entities	(6,214,809)	-	(6,214,809)	-
Exploration costs	(7,594,698)	(18,491,719)	-	(3,752,291)
Net cash generated by / (used in) investing activities	(189,354,713)	(114,710,537)	(63,314,338)	(91,437,803)
Cash flows from financing activities
Proceeds from issue of shares	37,469,162	331,294,448	37,469,162	331,294,448
Transaction costs from issue of shares	(3,466,112)	(9,134,738)	(3,466,112)	(9,134,738)
Loans to controlled entities	-	-	(144,647,951)	(27,703,497)
Loans repaid to other entities	-	(318,636)	-	-
Other loans repaid	(187,626)	(1,375,608)	-	-
Net cash generated by financing activities	33,815,424	320,465,466	(110,644,901)	294,456,213
Net increase/(decrease) in cash held	(166,330,206)	202,745,168	(165,887,910)	204,777,871
Effect of exchange rates of cash holdings in foreign currencies	1,358,222	(12,270,799)	12,165	(6,339,304)
Cash at beginning of financial year	252,004,859	61,530,490	251,347,737	52,909,170
Cash at end of financial year	87,032,875	252,004,859	85,471,992	251,347,737

STATEMENT OF CHANGES IN EQUITY AS AT 30 JUNE 2009

	Ordinary share capital	Capital profits reserve	Foreign currency translation reserve	Share options reserve
	$	$	$	$
Consolidated Entity
Balance at 1 July 2008	533,053,006	136,445	(5,390,389)	9,524,104
Shares issued during the year	37,469,164	-	-	-
Capital raising costs incurred	(3,466,112)	-	-	-
Adjustments from translation of foreign controlled entities	-	-	3,566,699	-
Transfer from Option Reserve	921,061	-	-	(921,061)
Options issued during the year	-	-	-	273,728
Share based payments	1,290,000	-	-	-
Minority Interests in Investments	-	-	-	-
Loss attributable to members of parent entity	-	-	-	-
Balance at 30 June 2009	569,267,119	136,445	(1,823,690)	8,876,771
Parent Entity
Balance at 1 July 2008	533,053,006	136,445	-	9,524,104
Shares issued during the year	37,469,164	-	-	-
Transaction costs	(3,466,112)	-	-	-
Transfer from Option Reserve	921,061	-	-	(921,061)
Options issued during the year	-	-	-	273,728
Share based payments	1,290,000	-	-
Profit/ (Loss) attributable to members of parent entity	-	-	-	-
Balance at 30 June 2009	569,267,119	136,445	-	8,876,771

STATEMENT OF CHANGES IN EQUITY AS AT 30 JUNE 2009 (CONT)

	Accumulated losses	Total	Outside Equity interests
	$	$	$
Consolidated Entity
Balance at 1 July 2008	(45,936,267)	491,386,898	3,071,251
Shares issued during the year	-	37,469,164	-
Capital raising costs incurred	-	(3,466,112)	-
Adjustments from translation of foreign controlled entities	-	3,566,699	-
Transfer from Option Reserve	-	-	-
Options issued during the year	-	273,728	-
Share based payments	-	1,290,000	-
Minority Interests in Investments	-	-	4,568,383
Loss attributable to members of parent entity	(14,519,976)	(14,519,976)	-
Balance at 30 June 2009	(60,456,243)	516,000,401	7,639,634
Parent Entity
Balance at 1 July 2008	(50,565,937)	492,147,618	-
Shares issued during the year	-	37,469,164	-
Transaction costs	-	(3,466,112)	-
Transfer from Option Reserve	-	-	-
Options issued during the year	-	273,728	-
Share based payments	-	1,290,000	-
Profit/ (Loss) attributable to members of parent entity	13,579,359	13,579,359	-
Balance at 30 June 2009	(36,986,578)	541,293,757	-

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, including Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

The financial report covers the economic entity of Coal of Africa Limited and controlled entities, and Coal of Africa Limited as an individual parent entity. Coal of Africa Limited is a listed public company, incorporated and domiciled in Australia.

The financial report of Coal of Africa Limited and controlled entities, and Coal of Africa Limited as an individual parent entity comply with all Australian equivalents to International Financial Reporting Standards (AIFRS) in their entirety.

The following is a summary of the material accounting policies adopted by the economic entity in the preparation of the financial report. The accounting policies have been consistently applied, unless otherwise stated.

	Consolidated Entity
	2009	2008
	$	$
2. (LOSS) / EARNINGS PER SHARE
Basic (loss) / profit per share
(cents per share)	(3.55)	(4.08)
Headline (loss)/earnings per share (cents per share)	(2.76)	(4.12)
Weighted average number of ordinary shares used as the denominator	409,137,218	275,781,951

As at 30 June 2009, there were 20,336,544 (2008: 19,921,688) options outstanding over unissued capital exercisable at amounts ranging between $0.50 and $3.25 (2008: $0.50 and $2.05). Diluted EPS was not calculated for 2009 as the Consolidated Entity incurred a loss per share.

Audit Report

The annual financial statements for the year ended 30 June 2009 have been audited by MooresStephens. Their unqualified audit report is available for inspection at the Company`s registered office.

Directors Richard Linnell - Chairman Simon Farrell - Managing Director Blair Sergeant - Finance Director Alfred Nevhutanda -Executive Director Steve Bywater - Non-Executive Director Peter Cordin - Non-Executive Director Pierre Leonard - Non-Executive Director (resigned 27 August 2009) Hendrik Verster (appointed 27 August 2009)
Company Secretary Shannon Coates

Principal & Registered Office

Level 1, 173 Mounts Bay Road

Perth Western Australia 6000

Telephone: +61 8 9322 6776

Facsimile: +61 8 9322 6778

Email: [email protected]

South African Office

CoAL House

Pinewood Office Park

33 Riley Road

Woodmead 2191

Telephone: +27 11 785 4518

Facsimile: +27 11 803 6654

Email: [email protected]

Auditors

MooreStephens

30 September 2009

Sponsor

Macquarie First South Advisers (Pty) Ltd

ENDFR URUWRKWRKORR

---

Related Shares:

MCM.L