Universal Coal currently has two collieries, both operating at a steady state of production with a third in acquisition. Both collieries have proven consistent in meeting the required offtake agreement tonnages both from ESKOM and Export, allowing the company the confidence of continued delivery on the success from FY18, with the significant increase in production and therefore earnings in FY19.
Universal Coal is in the process of acquiring the North Block Complex from Exxaro Coal Mpumalanga Proprietary Limited and Exxaro Coal Proprietary Limited (together ‘Exxaro’). Following recent developments on making the deal unconditional, the company expects the North Block Complex assets to transfer during 2Q19 FY. The company has prudently included only the current rate of production from the North Block Complex for the period January to June 2019. The timeframe from transfer to the end of June 2019 will allow the company to commence the transformation of the colliery into a ‘Universal Coal Business Model’, whilst increasing production back to historical levels. The Paardeplaats Extension will be included into the production pipeline once all regulatory approvals have been received in 2019.
The current forecast does not include any production from the Brakfontein/Ubuntu project, as Universal is still in the process of finalising feasible offtake agreements and production options, and due to the uncertainty of timing on this matter, the project has been excluded from current guidance. The company will update the once these are achieved and if the project commences development.
View the full announcement here.
Read the article online at: https://www.worldcoal.com/coal/10102018/universal-coal-forecasts-2019-ebitda-increase-to-aus93-million/