Wescoal buys another coal reserve to boost run of mine
Wescoal, the listed coal mining company involved in the mining and trading of coal, has purchased from South African Mining Management (Pty) Limited, the shares and loan accounts of its wholly owned subsidiary Nungu Trading 341 (Pty) Limited (“Nungu”) for a purchase consideration of R45 million. The company funded the acquisition through a R25 million cash portion and R20 million in shares.
Nungu owns specified assets and prospecting rights situated on Portions 4 and 23 Elandspruit 291 JS (“Elandspruit reserve”) (“the proposed acquisition”).
Elandspruit 291 JS, portions 4 & 23, are situated approximately 5 kilometres southwest of Middelburg, Mpumalanga adjacent to the Shanduka Townlands coal mine and bordered by the R555 Witbank/Middelburg Road. It is a Greenfields project with an indicated resource of 11,6 million tons of thermal coal, the bulk of which can be mined by the opencast method.
This reserve comprises of 4.3 million tons of metallurgical type coal, 4.1 million tons thermal coal suitable for the inland and/or export markets with the remainder meeting the ESKOM standard.
Andre Bojé, CEO of Wescoal said that, “The acquisition of this reserve fits perfectly with our strategy to develop the coal mining segment of Wescoal’s business model and provides us with greater life of mine, extending to a minimum 6 year life of mine at the Elandspruit property.”
Following on the success of its Khanyisa Mine acquisition and the bullish long term view on the coal industry, Wescoal has outlined its primary objective as to ensure sustainability of the mining activities and the results produced. In addition Wescoal seeks to increase beneficiated product available to the trading division and the inland or export market and increase product available to Eskom.
In line with similar mining practises in place at Wescoal’s Khanyisa operation, Wescoal will appoint professionals to run the mine as well as mining contractors to extract and process the coal.
“It is our intention to mine 200 000 tons per month at Elandspruit, together with the current volume of 100 000 tons per month being mined at Khanyisa, puts us in a stronger position than we were in, in the past.. It is our firm intention to ultimately mine 4 million tons run of mine per annum.” said Bojé
The company continues to be an opportunistic acquirer of coal assets and is confident that it has the necessary expertise and marketing ability to sell the coal in the local market.
10 August 2010
| For further information, please contact: | |
| Andre Bojé (CEO), Wescoal Holdings | (011) 954-2721 or 082-894-5832 |
| Released by: | |
| Keyter Rech Investor Solutions | |
| Vanessa Rech | (011) 447-8656 or 083-307-5600 |
| Sheri Cohen | (011) 447-7903 or 071-683-1888 |
| Release date: | 10 August 2010 |
| Website: | www.wescoal.com |
Year end results
Overall the group suffered a decline in revenue of R184 million (32,3%) due to significantly reduced pricing structures and volume reduction to the manufacturing sector.
These factors resulted in a reduction in gross profit of R19,7 million (35,0%) and together with impairments, a reduction inoperating profit of R16,4 million (65,0%). On the positive side, overheads reduced by R3,5 million (10,7%) due to increased focus on this area.
Investment revenue reduced R 1.9m (56.7%) due to the investment in Khanyisa mine during October 2009. During the previous financial year management identified the possibility of releasing the debt linked to the purchase of a coal reserve with the repurchase of Wescoal shares. This exercise realized an after tax profit of R 2.6m which is not reflected as headline earnings but contribute a significant amount to the group earnings.
Trading update
Shareholders are advised that Wescoal is currently finalising its results for
the year ended 31 March 2010 and are advised that its earnings per share for the
year is expected to be between 4.6 and 5.4 cents per share and headline earnings
per share for the year is expected to be between 4.0 and 4.6 cents per share.
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Wescoal walks away from SACMH takeover
Wescoal’s firm intention offer to acquire South African Coal Mining Holdings has lapsed and it no longer intends to proceed with the offer.
Wescoal had proposed acquiring all the issued shares of SACMH in exchange for the issue of 11.11 Wescoal shares for every 100 SACMH ordinary shares held.
The scheme consideration would have entailed that more than 50.2 million Wescoal shares be issued at an issue price of 90c per share, for a total purchase consideration of R45.2m.
The firm intention contained, among other things, a condition precedent that the firm intention had to be accepted by SACMH’s board by no later than the end of April 2010.
This condition was not fulfilled and therefore the firm intention has lapsed. Wescoal does not intend to proceed with an offer.
Wescoal will actively continue seeking new growth opportunities in the future.
Wescoal lists on main board
WESCOAL ’s move tomorrow to the JSE’s main board will not affect its cautious attitude to growth, CEO Andre Bojé said yesterday, as the AltX-listed coal trader refocuses to make production its primary revenue generator.
“We will now be compared to our peers (in the coal mining sector); we’ll have better access to capital and a broader base of investors will look at us, which should improve liquidity,” said Bojé.
Wescoal, which listed on AltX in July 2005, had originally intended to list on the main exchange last year.
“We decided to delay it due to the economic situation. But earlier this year we decided this is the right time — investor appetite is back, and there are opportunities for expansion on the horizon. This is a natural progression. The AltX is like going to school to learn the ropes — corporate governance, fundraising and so on.”
Wescoal last month announced its intention to buy South African Coal Mining Holdings in a share deal worth R45m, which would give it ownership of mines including the Umlabu colliery in Mpumalanga. It hoped to complete at least one acquisition this year, Bojé said.
“But any acquisitions will be strictly in SA. To go elsewhere you need a lot of money and experience, and your risk profile goes up.”
Despite its desire to present itself to investors alongside major coal producers such as BHP Billiton and Xstrata, Wescoal would “never be near them” in scale, said Bojé. “We see ourselves remaining in the junior mining sector — our long- term goal for annual production is 4-million to 5-million tons a year, which the bigger companies produce in a month.”
Download press coverage of main board listing
Announcement of firm intention by Wescoal to acquire the entire issued share capital of South African Coal Mining Holdings Limited
Shareholders of Wescoal and shareholders of SACMH are advised that Wescoal has submitted to the board of directors of SACMH written notice of its firm intention to make an offer to acquire all the ordinary shares making up the entire issued ordinary share capital of SACMH.
This offer, which if concluded, will be an affected transaction as defined by the Securities Regulation Code and Rules (“SRP Code”) of the Securities Regulation Panel (“SRP”).
The Transaction would significantly accelerate Wescoal`s growth as a junior
miner and remove current entry barriers to the export market.
The SACMH reserve statement includes the Vlakfontein mining asset with 35
million total tons in situ that, following extraction and beneficiation, would
make 13 million saleable tons available to Wescoal for the export and local
markets.
The Quattro Allocation currently allows SACMH an export allocation of 207 000
tons per annum that will be increased to 500 000 tons on completion of the
Richards Bay Coal Terminal Phase V expansion project. Coupled with this, the
SACMH owned Voorslag siding will give Wescoal immediate access to the
strengthening export markets that would otherwise be reliant on Spoornet owned
sidings and the remote possibility of the company securing its own export allocation through one of the ports.
This Transaction would give Wescoal the critical mass and sustainability
required to be a recognised player in the expanding coal mining industry.
Transfer from the Altx to the Main Board of the JSE
Following the Group`s successful expansion into mining the board of directors has decided to apply to the JSE for the transfer of Wescoal`s listing to the main board of the JSE.
The move to the main board will position Wescoal alongside comparable coal mining companies.
Details of the transfer will be announced once JSE approval has been obtained.
Reviewed Interim Results For The Six Months Ended 30 September 2009
- Revenue down 27%
- Operating profit down 69%
- Headline earnings down 62%
Gross margin reduced to 8.7% from 11.3% in the comparative period mainly due to the competitiveness experienced in the pricing explained above. The group has adopted a retention of volumes policy and margins will therefore remain under pressure for the next twelve months. This policy will however ensure a strong customer base when pricing and volumes turn in the soon expected upturn in the domestic coal market.
In anticipation of the coal price decrease and the lower demand from industry the group started a cost reduction strategy. As a result operating costs are 7.8% down on prior year and this campaign will be intensified during the second half of the financial year. Additional cost saving items have been identified and will be maximised as soon as possible.
During the previous financial year management identified the possibility of releasing the debt linked to the purchase of a coal reserve with the repurchase of Wescoal shares. This exercise realised a pre tax profit of R3.6m which is not reflected as headline earnings but contribute a significant amount to group earnings.
Wescoal Holdings Limited - Trading Statement
In terms of the Listings Requirements of the JSE Limited, companies are required to publish a trading statement as soon as they are satisfied that a reasonable degree of certainty exists that the financial results for the period to be reported on will differ by at least 20% or more from the financial results for the previous corresponding period.
Shareholders are advised that Wescoal is currently finalising its results for the six months ended 30 September 2009. Wescoal’s earnings per share and headline earnings per share for the six month period are expected to be lower than that of the corresponding period:
earnings per share are expected to decrease between 40% and 55%; headline earnings per share are expected to decrease between 60% and 75%. Trading conditions have remained depressed during the six month period despite the general bullish view on coal for the long term. Volumes are down in line with the national decline in manufacturing activity and increased competition from producers who traditionally favoured exports over local sales. Although inland pricing levels decreased, these decreases were not as severe as the reduced free on mine prices experienced by the export market.
No improvement in trading conditions are expected until the later half of 2010. However the mining division will be boosted by the Khanyisa mine acquisition. The financial information on which this trading statement is based has not been reviewed or reported on by the company’s auditors. The company’s results for the six months ended 30 September 2009 are expected to be published on SENS by early December 2009.
Wescoal wraps up Khanyisa acquisition
JSE-listed Wescoal has completed the acquisition of the Khanyisa mine in South Africa’s Mpumalanga province, the company reported on Wednesday.
Wescoal announced in June that it had bought the mine from Nucoal Mining to build its asset base.
Khanyisa mine stretched over three portions of the farm Heuwelfontein 215 IR and had a remaining measured coal reserve of 4,5-million tons and further indicated resources of 0,5-million tons, it said previously.
Restructuring of bee shareholding in Wescoal
Waterberg Portion Property (Pty) Limited ("WPP"), a BEE company which holds a 31.36% shareholding in Wescoal has restructured its shareholding in Wescoal through the transfer of 1 000 000 Wescoal shares at 78 cents per share to Mr R Ramaite, a shareholder of WPP and director of Wescoal and 2 000 000 Wescoal shares at 78 cents per share to another shareholder of WPP, Mr E Mzimela.
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Wescoal appoints former Subaru Southern Africa MD to board
Teresita van Gaalen has been appointed as an independent non-exeuctive director of mining company Wescoal.
Results for the year-ended 31 March 2009
HIGHLIGHTS
- Revenue up 51.7%
- Operating profits up 40.1%
- Headline earnings up 47.1%
- Operating cash flow up 273.0%
- Net Asset Value up 164.7%
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Wescoal acquires Khanyisa mine
Khanyisa Mine is an operating opencast mine situated near Kendal in Mpumalanga with remaining measured in situ coal reserves totalling 4, 5 million tons and further indicated resources of 0, 5 million tons. The mine has 2 operational opencast pits currently extracting 100,000 tons per month with the necessary infrastructure such as offices and access roads but does not process coal on site.
Read the rest of this entry »Trading update
Shareholders are advised that Wescoal is currently finalising its results for the year ended 31 March 2009 and are advised that its earnings per share and headline earnings per share for the year is expected to be between 15% to 30% over that of the corresponding period.
Read the rest of this entry »Renewal of cautionary announcement
Wescoal issue a further cautionary announcement.
Read the rest of this entry »Cautionary announcement
Wescoal issue a cautionary announcement to shareholders.
Read the rest of this entry »Repurchase of securities reaches 6% mark
On Monday, Wescoal announced that the repurchase of its own shares on the open market has reached the 6% mark.
Read the rest of this entry »Repurchase of securities
On Monday Wescoal announced that it has repurchased 3% of its own shares on the open market.
Read the rest of this entry »Reviewed interim results for the year ended 30 September 2008
Wescoal Holdings has issued the reviewed interim results for the six months ended 30 September 2008.
Read the rest of this entry »Mining operations at Schoongezicht reserve resume
Wescoal Holdings has entered into a joint venture agreement with Kubra Mining to mine the Schoongezicht reserve.
Read the rest of this entry »Restated results for the year ended 31 March
RESTATED RESULTS FOR THE YEAR ENDED 31 MARCH 2008 AND NOTICE OF ANNUAL GENERAL MEETING
Shareholders are referred to the annual results for the year ended 31 March 2008 announced on SENS on 11 June 2008.
Read the rest of this entry »Wescoal’s Blesboklaagte returns to full output after strike ends
The strike affecting Wescoal’s Blesboklaagte plant, near Witbank, has been resolved and the coal-mining plant has returned to full production.
Read the rest of this entry »Wescoal to seek out production assets
Wescoal will spend the R80m it raised in a rights issue on growing briquette output, exploring and developing assets and potentially buying producing mines in the next three months.
The firm currently buys run-of-mine coal from companies that don’t have washing plants and has a washing plant, with a capacity of some 40 000 tonnes, to produce saleable coal.
"We will talk to ESKOM, but in all probability it will be sold to customers with existing contracts," CEO Andre Boje said, adding the sale of coal to power utility ESKOM was not the company’s focus.
The acquisitions, which will be production assets, could be made within the next three months, he said.
Results for the year ended 31 March 2008
The group posted excellent results for the financial year ended 31 March 2008, proving that strategies implemented have continued to pay dividends throughout the year under review.
Read the rest of this entry »Trading statement - June 2008
Shareholders are advised that Wescoal is currently finalising its results for the year ended 31 March 2008 and are advised that its earnings per share for the year is expected to be between 10.9 and 11.4 cents per share compared to earnings per share of 2.3 cents for the twelve months ended 31 March 2007.
Read the rest of this entry »Wescoal’s mining unit acquires 60% of newly formed company to transfer new order prospecting rights.
Wescoal Mining paid an initial share capital of R60 for the stake in the new company, meant to transfer the prospecting rights granted by the Department of Minerals and Energy from Proudafrique and other individual owners.
Read the rest of this entry »Wescoal hopes for own output in 2 years
Wescoal intends to start to mine coal within a couple of years and has a number of possible prospects in Mpumalanga, KwaZulu-Natal and the Waterberg. "We are applying for prospecting rights. We should come up with good news in the next year, at least getting some prospecting rights," said chief financial officer Petrus Janse van Rensburg.
Read the rest of this entry »Cautionary announcement
Shareholders are advised that Wescoal has entered into negotiations, which if successfully concluded, may have a material effect on the price of the company’s securities. Accordingly, shareholders are advised to exercise caution when dealing in the company’s securities until a full announcement is made.
Wescoal sells stake to black investors
The sale of shares and issue of new shares in Wescoal to its new BEE investors will result in a BEE shareholding of 32.5 percent. Wescoal said in a statement that its main shareholders, including its directors, had agreed to sell 33- million shares to Waterberg Portion Property Investments (WPP) for R35.5-million.
Read the rest of this entry »Wescoal buys into logistics
WESCOAL has bought ATLANTIS COAL ESTATE and EXPRESS TECHNOLOGY, as well as the properties that the two firms operate from. The deal cost R27m and the firms were bought from private shareholders.
Interim results for the six months ended 30 September 2007
The results for the reporting period show that strategies implemented during the latter part of the previous financial year have paid dividends.
Read the rest of this entry »Wescoal seeks new BEE partners
Wescoal has announced that chairwoman Thuthukile Skweyiya, and non-executive directors Thembeka Tulwana and his alternate Johannes Nieman have left the board with immediate effect.
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