Coal of Africa Limited (CZA.L)
Significant progress has been made in the identification of possible cash generating assets. Management is in discussions with current shareholders and potential investors to ensure any possible acquisition can be appropriately funded. Net cash for quarter ended September 30th, 2016 was US$11.9m.
David Brown the CEO commented: “The increase in thermal and hard coking coal prices over the last quarter leaves the coal industry with a positive outlook and we are committed to the maximise the benefit of this market for our shareholders.”
Makhado Coking Coal project – Soutpansberg Coalfield (74% owned post BBBEE transaction).
When regulatory approvals are granted the 26-month construction phase will commence. Approvals are expected during CY2017. Ramp-up is expected to take a further four months, post construction and will result in the production of 5.5 million tonnes per annum (MTPA) of saleable product. The previously approved 20 year Integrated Water Use Licence (IWUL) remains suspended following an appeal by the Vhembe Mineral Resources Forum. Discussions with the Minister of Water and Sanitation are on-going.
A five year extension of the validity period of the Environmental Authorisation (EA) has been granted by the Department of Mineral Resources (DMR) and Limpopo Department of Economic Development, Environment and Tourism (LEDET); as well as a transfer of the EA from CoAL to Baobab (the legal operating entity of the Makhado project).
Mooiplaats Colliery – Ermelo Coalfield (74% owned).
Placed on care and maintenance Q1, 2014. In discussions with potential purchasers, interested parties are in various stages of the due diligence process.
Vele Colliery – Limpopo (Tuli) Coalfield (100% owned).
The IWUL has been renewed for a further 20 years and has also been amended to comply with the requirements of the Plant Modification Project (PMP) at the Colliery. A decision for the regulatory approval relating to a non-perennial stream diversion is anticipated in H2 2016. Upon approval. the final decision to proceed with the PMP will be placed before the board and will include an assessment of forecast global coal prices.
Estimated cash outflows for the next quarter are US$2.8m. Current YBI loan facility for US$10k, bears no interest and can be converted to equity post 31 December 2016.