CoAL reports updates during 2Q15

CoAL reports updates on the Makhado project, the Mooiplaats colliery, the Vele colliery and the Greater Soutpansberg project. The company also provides financial updates for 2Q15.

Makhado project

CoAL has reported that during 2Q15 it has been granted a New Order Mining Right by the Department of Mineral Resources for the Makhado hard coking coal and thermal project as well as Section 11 approval transferring the project from CoAL to its subsidiary, Baobab Mining & Exploration Ltd.

During 2Q15, the Makhado project recorded no lost-time injuries (LTIs).

Makhado’s 26 month construction phase is expected to begin in H2 CY2016 with a further four month ramp-up phase resulting in the production of 5.5 million tpa of saleable product. Consultations with potential customers to secure off-take agreements for Makhado’s hard coking and thermal coal products and with potential project funders continued during 2Q15.

An interim court interdict seeking to halt any mining or construction activity was issued against the Makhado Project during Q2 FY2015. The company is preparing to have the interim interdict set aside. It does not anticipate that the process will affect the Makhado Project construction timetable.

Mooiplaats colliery

The Mooiplaats thermal coal colliery was placed on care and maintenance during 3Q13 and recorded no LTIs during the 2Q15.

During 4Q14 the company signed a share purchase agreement (SPA) with Blackspear Capital Proprietary Limited for the disposal of the Mooiplaats Colliery for R250 million (US$20.3 million). Blackpear was unable to agree terms with a financial and operational partner to fund its acquisition resulting in the SPA lapsing. The company is continuing discussions with other potential purchasers including Blackspear.

Vele colliery

The Vele metallurgical and thermal coal colliery recorded no LTIs during 2Q15.

The company previously submitted applications to amend and renew Vele’s IWUL and expects these to be granted during 2H15. CoAL does not anticipate any delays as a result of the appeal lodged against the colliery’s amended and updated EA.

The current Vele colliery IWUL is valid until March 2016 and the company has delayed the commencement of the plant modification construction pending the approval of the amended IWUL and approved Water Use Licence for the planned stream diversions, as well as an assessment of global coal prices.

Greater Soutpansberg project

The MbeuYashu project also recorded no LTIs during 2Q15.

Financial updates for 2Q15

CoAL’s available cash at the end of 2Q15 was US$17.8 million and restricted cash of US$1.3 million.

During2Q15, the company issued 144 million shares at £0.55 each, raising US$13.8 million completing the US$65 million (before charges and foreign currency movements) three stage shareholder approved equity raise process.

CoAL has reached an agreement for the liability owing to Rio Tinto with the balance to be paid in monthly instalments of at least US$100 000 plus interest and the obligation settled by June 2017.

During 2Q15, the company paid the interest accrued from May 2014 of US$1.2 million and US$2.7 million in capital and the balance remaining at the end of the period was US$19.8 million.

The company is continuing to move forward with the application for the Makhado project Integrated Water Use Licece (IWUL) and projects it will be granted in 3Q15.

Edited from press release by Harleigh Hobbs

Read the article online at: https://www.worldcoal.com/coal/28072015/coal-reports-updates-to-mining-project-up-to-2q15-2642/