Wescoal

Wescoal concludes R180 million deal with Xstrata

admin — Tue, 31 Jul 2012 09:29:52 +0000

Wescoal is pleased to announce a four step transaction which will in the medium term increase its life of mine by 15 years.

Wescoal currently has a mining right over Vlaklaagte in partnership with Proudafrique. Wescoal will acquire the remaining share (40%) of the prospecting right from Proudafrique. And will sell its Vlaklaagte mining right to Xstrata for R82 million; the rationale for the sale of Vlaklaagte to Xstrata is that Vlaklaagte is currently surrounded by Xstrata operations. The Vlaklaagte mining right is an underground resource that would require extensive capital expenditure to bring to full production, while Wescoal’s focus is predominantly open cast mining.

The next step in the process is to acquire the Elandspruit asset from Xstrata coal, which has an existing mining right with a resource of over 30 million tons.

Andre Boje, CEO of Wescoal, said the company has made several considerations that will help in bulking up operations across Wescoal’s mining division. “The acquisition of the Elandspruit mining right from Xstrata is valued at R94 million, and is in line with Wescoal’s goal of securing high quality coal assets that can be mined opencast to increase productivity and sustainability. Wescoal will strive to commence mining by late 2013 or early 2014.

Similarly Elandspruit is better situated for Wescoal; it’s in proximity to other Wescoal operations of Khanyisa and Intibane and is an open cast resource.

The final leg of transactions is to acquire the Duiker properties, from Xstrata, which holds the bulk of the surface rights needed to conduct mining operations on the Elandspruit resource. The agreed purchase price is R3.4 million.

“This isa positive milestone of achievement for Wescoal which further cements our goal of additional products, extended life of mine and improved margin for the Wescoal group. We aim to produce 4 million tons of coal per annum by 2016; this acquisition is another step towards that goal and adds a vast new dimension to the group” said Boje

Issued on behalf of: Contact: Tel:	Wescoal Holdings Limited Andre Boje, CEO +27 11 954 2721

Compiled and released by: Contact: Tel: Email:	Fleishman-Hillard Dumezulu Maphophe + 27 82 333 4659 dumezulu.maphophe@fleishman.co.za

Issue date: JSE code: Website:	16 July 2012 WSL www.wescoal.co.za

WESCOAL FIRED UP BY SOUND FULL YEAR RESULTS

admin — Thu, 21 Jun 2012 07:44:48 +0000

•	Revenue up 13,1% to R630,8 million for the full year
•	Operating profit of R26 million, up from negative R21,4 million
•	HEPS: 11.4 cents ( 2011: - 8.1 cents)
•	Cash reserves: R 20 million

Johannesburg, 20 June 2012 – Wescoal Holdings Limited (JSE: WSL) today delivered a sound set of full year results to investors. Overall the Group increased its revenue by 13,1% to R630,8 million with EBITDA increasing from a loss of R6,2 million to a profit of R45,2 million, for year ending 31 March 2012, reinforcing the Group’s turnaround performance in the midst of challenging market conditions.

Speaking at the results presentation in Johannesburg, Andre Boje, CEO of Wescoal Holdings Limited said, “Wescoal Management is pleased with this improved set of results which demonstrates we have worked hard to turnaround the loss position reported on in March 2011.”

Operating costs increased by 10.45% to R38.9 million mainly due to inflationary factors, expansion in the mining division and legal, professional and consulting fees incurred. Despite this the positive EBITDA position was driven by cost savings in the mining division, lower cost per stripping ratio achievements and increased selling prices in the trading environment.

“Management is confident of strong growth going forward and are focused on maximizing profitability of the divisions,” said Boje.

Headline earnings per share was a pleasing 11.4 cents compared to a loss of 8.1 cents in the comparative period from continuing operations.

Cash and cash equivalents reduced by R11 million to R20 million but it must be noted that trade receivables increased by R36 million without a corresponding increase in trade payables. Cash flow was further impacted by R 7.7 million spent on accelerated mine rehabilitation.

According to Boje, the goal for the mining division is to continue to focus on supplying Eskom with quality product. “This positioning has certainly proven to be a successful one for Wescoal,” added Bojé. Deliveries to Eskom continue unabated however negotiations are at an advanced stage to secure a three-year contract to include the Vlakvarkfontein resource.

Mining activities at Khanyisa were stabilised towards the end of the previous financial year and this division managed to generate revenues of R291 million. While revenues in the division are down by 7,5% due to the disposals, when excluding the non-recurring write off R29,3 million, EBITDA has increased by 73%. In addition to the ongoing rehabilitation program, R7,7 million was spent in the period November 2011 to March 2012 to accelerate the rehabilitation of two mined out areas at Khanyisa.

“On an EBITDA level the mining division contributes over 80% to the Group and this strong drive in earnings and margin we want to harness and maintain”, said Bojé. “It is important to note that executive management at Wescoal Mining has been strengthened by the appointment of an executive director, Wiseman Khumalo, for group development and a project manager, Ettienne Strydom, who will focus on development and the various prospects outlined in the resource statement. These two appointments will ensure that the operational management is separated from group development and projects,” he said.

Market conditions in the trading environment continued to improve. The trading division delivered positive results with revenue ending on R359 million up by 13,2% and EBITDA at R7,0 million, an increase of 67% on the results to March 2011.

Transnet Freight Rail (TFR) railings to Richards Bay Coal Terminal (RBCT) for the calendar year to April 2012 totaled 23,8 million tons, an annualized rate of 71,5 million tons. The increase on the 2011 calendar year of 5,8 million tons is primarily being taken from domestic coal supply resulting in shortages of sized coal for the domestic market.

Moving forward, management remains focused on increasing the sustainability of the Group by utilizing current coal resources and the acquisition of additional coal assets.

“While the market will remain competitive in the coming months, will continue to look for long-term opportunities and we believe that Wescoal is well positioned to deliver on strategic imperatives and planned results,” concluded Boje.

Issued on behalf of: Contact: Tel:	Wescoal Holdings Limited Andre Boje, CEO +27 11 954 2721

Compiled and released by: Contact: Tel: Email:	Fleishman-Hillard Dumezulu Maphophe + 27 82 333 4659 dumezulu.maphophe@fleishman.co.za

Issue date: JSE code: Website:	20 June 2012 WSL www.wescoal.co.za

Wescoal hosts a successful golf day coupled with a stunning charity angle

admin — Fri, 11 May 2012 08:38:03 +0000

On 9 March 2012 Wescoal hosted a golf day at the Middleburg Golf Club in which 20 group clients participated. The day was filled with golf, fun and a massive drive towards charity. Flowing from a number of generous donations Wescoal has committed to donate R40 000 to Balmoral Primary School which looks after under privilege children who cannot afford school fees and a further R40 000 to Imbalenhle Primary School at Khanyisa Mine – an initiative supported directly by Wescoal.

In addition to this, through Good Morning Angels on Radio Jacaranda, R50 000 will be donated to the Elkana Educational Centre and a further R50 000 to Kabod House in Witbank.

Wescoal makes significant donation to Kabod House in Witbank through Good Morning Angels on Jacaranda 94.2

Wescoal receives water licenses

admin — Sun, 18 Mar 2012 16:27:44 +0000

Wescoal is pleased to announce the granting, by the Department of Water Affairs (“DWA”) of a water use licence at Khanyisa Colliery in respect of:

•	Taking water from a water resource;
•	Storing water;
•	Disposing of water; and
•	Removing, discharging and disposing of water found underground.

The licence is governed by strict adherence and compliance measures set out by DWA, which include a series of specific management guidelines, measurement guidelines, internal audits and submissions to DWA on a yearly basis.

This licence is important to Wescoal as the registration of water use is required in terms of section 26 (1)(c) and 34(2) of the National Water Act (Act 36 of 1998). There are a number of reasons why water users are required to register their water use with the Department and these include:

•	the management and control of water resources for planning and development purposes;
•	the protection of water resources against over-use, damage and impacts; and
•	to ensure fair allocation of water among users.

The registration of water rights and usages is to the benefit of the country as a whole, and not only to water users. According to a leading expert, Dr Rudy Boer, South Africa is one of the most water-scarce countries in the world - on the brink of being defined as a country “under water stress.” Estimates are that all freshwater resources will be fully allocated in about 20-30 years from now, depending on economic growth scenarios.

In the mining process Wescoal makes use of a large volume of water. This license entitle Wescoal to extract 36 000 m 3 of potable water per annum from a borehole. This will certainly assist in the reduction of current water costs at Khanyisa colliery.

The licenses are valid for two years on the mining sites of Khanyisa, which is the approximate amount of time left at the Khanyisa site.

Wescoal acquires Pegasus Project

admin — Mon, 28 Nov 2011 07:06:26 +0000

Johannesburg, 28 November 2011 – Wescoal Holdings Limited (JSE: WSL) today announced an offer to acquire from HSTI 17 Proprietary Limited (“HSTI”), 51% of the issued ordinary share capital of EZIM and 51% of EZIM’s liabilities, which as has been accepted by HSTI.

EZIM owns the prospecting right in relation to Mineral Area 2 (a portion of Mineral Area 1) of the farm Geluk 276, Registration Division JS, Mpumalanga Province, measuring 919.0666 hectares; and the surface rights in relation to portion 2 of the farm Geluk 276, Registration Division JS, Mpumalanga Province, measuring 250 hectares, registered under Deed of transfer number T80810/89) (“Pegasus project”).

The Pegasus project was previously owned by BHP Billiton Energy Coal South Africa. The project is an undeveloped metallurgical and export quality thermal coal deposit with a measured resource of approximately 15 million tons and is situated 10 km from Witbank contiguous to the ExxaroInyanda colliery.Pegasus is a shallow coal deposit with an average strip ratio of 1,46, comprising the number 2 upper, number 2 lower and number 1 coal seams of the Witbank coalfields.

“The acquisition of 51% of the Pegasus project is in line with Wescoal’s stated goals of securing high quality coal resources that can be mined by the opencast method to increase production and sustainability,” said Andre Boje, CEO of Wescoal Holdings Limited.

It is anticipated that Pegasus will come on stream during 2014 and will continue for 8 to 10 years thereafter. The main product of the project will be a low-phosphorus coal that will be sold into the metallurgical industry thereby commanding a price premium and the coal not meeting the required specifications will be sold into the export market. The ultra low stripping ratio will result in low cost opencast mining and will ensure the project is at the low end of the cost curve.

“There was intense competition from local and international mining companies to secure the Pegasus project as the reserve is known industry wide as the last great coal resource available in the Witbank and Middelburg coalfields,” said Boje.

An independent high-level valuation of the Pegasus project commissioned by Wescoal and conducted by Mineral Corporation Consultancy (Pty) Ltd. (“Mincorp”), based on the Monte Carlo simulation indicates a current value range of R593 million to R946 million. The valuation further indicates that, with additional capital investment to bring the project into full production, the valuation as an operating concern could be significantly increased. The transaction is a related party transaction, as Mr R Ramaite and Mr W Khumalo, who hold the position of Chairman and non-executive director of Wescoal respectively, have a financial interest in HSTI.

Jointly Wescoal and HTSI are engaging local and international companies who have expressed interest in acquiring the balance of 49% of the project and who will bring the necessary financial support to develop the project.

“We are excited about this project,” said Boje. “As Pegasus will contribute to the long term sustainability of Wescoal as we drive the business model of higher margins forward.”

“We are assessing various other opportunities for which we remain under cautionary, however we remain driven by our focus to supply ESKOM and elevate overall margins within Wescoal to a higher level,” concluded Boje.

Issued on behalf of: Contact: Tel:	Wescoal Holdings Limited Andre Boje, CEO +27 11 954 2721

Compiled and released by: Contact: Tel: Email:	Fleishman-Hillard Vanessa Baard + 27 82 331 8158 vanessa.baard@fleishman.co.za

Issue date: JSE code: Website:	28 November 2011 WSL www.wescoal.co.za

Wescoal fuelled by solid interim results

admin — Thu, 24 Nov 2011 12:20:00 +0000

•	Revenue up 1% to R337,1 million for the half year
•	Operating profits up by 2%
•	Cash reserves up by 57% to R31.5 million

Johannesburg, 24 November 2011 – Despite challenging market conditions and operating in a highly competitive landscape, Wescoal Holdings Limited (JSE: WSL) today delivered a sound set of interim results for the six months ended 30 September 2011.

Speaking at the results presentation in Johannesburg, Andre Boje, CEO of Wescoal Holdings Limited said, “Wescoal Management is pleased with this improved set of results, despite the operating numbers being in line with the comparative period last year.”

Following the losses incurred during the previous reporting period, defined operational goals and strategies were implemented and these are clearly paying off.

Overall the Group achieved a revenue increase of 1% to R337,1 million and gross profit increased 5,9% to R45,4 million from continuing operations. EBITDA however remained flat due to an increase in overheads of R3,7 million (24%) owing to the establishment of a regional office in Witbank during the latter half of the previous financial year and legal fees attributable to the legal disputes detailed below.

“A headline earnings per share of 7,3 cents was achieved compared with the 7,9 cents for the comparative period. Management is however confident that this positive result will continue or be improved upon through the second half of the financial year,” said Boje.

Cash flow from investing activities includes R6.2 million proceeds from the sale of the Blesboklaagte coal beneficiation plant. The outstanding balance of the proceeds from the sale of the plant of R6 million will be settled through coal purchases.

Importantly, the Group’s cash reserves are up by 57% to R31.5 million for the six month ended 30 September 2011.

“We believe the restructuring of Wescoal Mining is starting to yield good results. The strategic imperative for the Mining divisions is to focus on supplying Eskom with quality product and dispose of all other associated operations. In line with this decision, during the financial year ended March 2011, the assets of Wescoal Mineral Recoveries (Pty) Ltd. were disposed of and in August 2011, the Blesboklaagte washing plant was sold,” said Boje.

Furthermore, Khanyisa Colliery returned to full production during April 2011 and as a result, the mining division achieved revenues of R147.5 million and operating profits of R28.3 million from a total sales tonnage of 702,713 of coal.

Should exceptional rainfall occur during the coming summer months, it should not overly affect production as measures are in place to limit flooding and production disruptions and management is confident of achieving the stated sales target of 1,4 million tons for the financial year to March 2012.

Wescoal’s Trading division also delivered a solid set of results with revenue up 8% and profits from operations at R5.2 million roughly in line with the previous comparable period.

Transnet Freight Rail (TFR) railings to Richards Bay Coal Terminal (RBCT) increased during the period under review that resulted in constrained sized coal supply on the inland market. API#4 export prices have softened to current levels of US$106.00, however at current exchange rates of R8,20 to the US$, this is a significant premium for inland coal prices. Producers have advised of further price increases going forward.

“While we have had to deal with recent litigation issues surrounding the mining division, Management remains focused on the day to day operations of the Group and these legal matters will continue to be opposed and dealt with by our legal team,” said Boje.

Going forward, current earnings should remain steady or improved upon and the expected issue of the Vlakvarkfontein 213 IR mining right during the first half of 2012 will extend the current duration of mining division’s activity. In addition, mining rights have been applied for on the Vlaklaagte 330 JS, Silverbank 611 IR and Verblyden 387 IS resources with a combined total of 90 million tons of coal in situ.

“The market will remain competitive as we enter 2012, but we believe that Wescoal is well positioned to deliver on strategic imperatives and planned results,” concluded Boje.

Issued on behalf of: Contact: Tel:	Wescoal Holdings Limited Andre Boje, CEO +27 11 954 2721

Compiled and released by: Contact: Tel: Email:	Fleishman-Hillard Vanessa Baard + 27 82 331 8158 vanessa.baard@fleishman.co.za

Issue date: JSE code: Website:	24 November 2011 WSL www.wescoal.co.za

Court papers – BSM Mining:

admin — Fri, 04 Nov 2011 06:30:59 +0000


Notice of motion – PDF 48 KB

Affidavit – PDF 458 KB

Annexes – PDF 2.89 MB

Sutha abandons action against Wescoal

admin — Wed, 03 Aug 2011 16:52:40 +0000

Wescoal Holdings Limited (“Wescoal”), the listed coal mining company involved in the mining and trading of coal, announced today that the North Gauteng High Court in Pretoria yesterday granted the application by Wescoal to set aside the Sutha Civils (Pty) Ltd (“Sutha”), application for the liquidation of the Wescoal subsidiary, Wescoal Mining (Pty) Ltd.

Andre Bojé, Chief Executive Officer of Wescoal, said that, “it is incredulous that after serving notice to oppose and the months of intimidation and malicious attempts by Sutha to extricate money from Wescoal, in the process destroying substantial value, they simply fail to have any form of representation at court effectively abandoning their actions”, said Bojé, after no Sutha representatives or legal counsel were present at the hearing.

“The punitive costs order is a clear indication that the court has a dim view of their approach and reinforces the judgment handed down in the South Gauteng High Court last week that the Sutha actions were malicious, groundless, unsubstantiated and devoid of truth,” said Bojé.

Bojé went on to explain that this legal matter has taken up management time and resources and Wescoal is eager to return the full attention of the executive team onto the effective management of the business.

“These court orders bring to an end the madness of the Sutha matter and Wescoal will be pursuing a substantial damages claim against Sutha, Nico Swart and Wimpie Badenhorst for their destruction of value and the harm they have brought on Wescoal and its shareholders,” said Bojé.

“It is not inconceivable that independent shareholders, who have suffered financial harm, will institute action against the three respondents,” concluded Bojé.

Background to the matter:

In March 2011 Wescoal announced that a dispute had arisen with Sutha, one of the contractors engaged to mine at Khanyisa Colliery. Within five months of Wescoal appointing Sutha to mining the West Pit at Khanyisa Colliery, Wescoal management launched their first investigation into irregularities within the Sutha activities. No meaningful explanations were forthcoming from Sutha and the situation was exacerbated, until December 2010 when Wescoal removed Sutha from the Khanysia property and operation in entirety. Amongst a number of unsubstantiated claims, Sutha accused Wescoal of fraud by overstating tonnages mined at Khanyisa. Wescoal opposed the action and matters proceeded to the point at which Wescoal was granted an interim interdict against Sutha for making any unsubstantiated claims against Wescoal or it operations.

In July 2011 Sutha launched legal action against Wescoal Mining (Pty) Limited (“Wescoal Mining”), a wholly owned subsidiary of Wescoal, filing for its liquidation. The legal team representing Wescoal Mining were instructed to oppose the application based on the premise that the application is malicious, unfounded and has no prospect of success and Wescoal was of the opinion that Sutha have not followed due processes in the matter.

On 28 July 2011, judgment was handed down in the South Gauteng High Court granting the interdict and inter alia finding that Sutha’s actions and statements were unsubstantiated, made with malice, had no grounds, statements held no truth and that the unlawful conduct of Chris Broodryk clearly indicated that all Sutha wanted to do was extricate payment from Wescoal. This judgment vindicates Wescoal’s stance on the matter and most importantly finds that there were no grounds for the claims made by Sutha. The judgment directs Wescoal to seek final relief and institute a damages claim within 30 days against Sutha, Nico Swart and Wimpie Badenhorst jointly and severally.

For further information, please contact: Andre Bojé (CEO), Wescoal Holdings	082-894-5832

Released by: Keyter Rech Investor Solutions Vanessa Rech	(011) 447-8656 or 083-307-5600

Release date:	3 August 2011

Website:	www.wescoal.com

Download the Sutha abandons action against Wescoal – PDF 231KB

Dispute with Sutha Civils (Pty) Ltd (“Sutha”) – Court action (CEO’s comments)

admin — Thu, 28 Jul 2011 16:50:56 +0000

To:Date:

All Shareholders and Interested Parties28 July 2011

I refer you to the SENS announcement dated 14 March 2011 and the various articles that appeared in the media over this period of time. On 15 March 2011 Wescoal launched an urgent application with the Johannesburg High Court to interdict Sutha from making further derogatory and unfounded statements to the media and others.Judgment was handed down today, Thursday 28 July 2011 granting the interdict and inter alia finding that Sutha’s actions and statements were;

•	Unsubstantiated
•	Made with malice
•	Had no grounds
•	Statements had no truth
•	The unlawful conduct of Chris Broodryk clearly indicated that all Sutha wanted to do was extricate payment from Wescoal.

This judgment vindicates our stance on the matter and most importantly finds that there were no grounds for the claims that Sutha made. Sutha were being malicious and attempted to extricate monies from Wescoal (for which we denied liability) and without following due process.With reference to the SENS announcement dated 20 July 2011 whereby Wescoal has applied to the Pretoria High Court to have the liquidation application against it’s subsidiary, Wescoal Mining (Pty) Ltd. set aside, Sutha served a notice to oppose and the due date for their papers on this matter was Friday 22 July 2011 with the court date set down as Tuesday 2 August 2011.

As of today no papers have been served due to, what I believe, they have no grounds or locus standi to oppose our application. The matter will nevertheless be argued on 2 August 2011 and we expect a similar judgment as received today indicating lack of grounds and malice.

Sutha have in the process seriously damaged the reputation of Wescoal, it’s board of directors and company’s standing as a listed entity on the Johannesburg Securities Exchange.

The judgment handed down today directs Wescoal to seek final relief and institute a damages claim within 30 days. This we certainly will do, it will be substantial and directed at all 3 respondents, Sutha, Nico Swart and Wimpie Badenhorst jointly and severally. Due to the fact that ABSA Bank has exercised their rights under a Sutha cession of debtors, it is highly unlikely that any damages will be forthcoming from the company however, we believe both Swart and Badenhorst have substantial assets to compensate for a portion of the damages, should they be awarded.

Sutha should have, from the outset, approached the courts to prove their claims and not have embarked on these underhand and coercive tactics, they must now “put up, or shut up”

The Wescoal group and it’s subsidiaries are and will continue to be a profitable, solvent and vibrant organization and I invite you all to participate in the future growth and profitability of Wescoal.

Thank you all for your continued support.

Yours truly,

Andre Boje
Chief Executive Officer

Download the Dispute with Sutha Civils (PTY) LTD (“Sutha”) – Court action – PDF 87.3KB

Download the urgent application to set aside application to liquidate a subsidiary

admin — Wed, 20 Jul 2011 08:39:52 +0000

Download the urgent application to set aside application to liquidate a subsidiary – PDF 649KB