Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  News  >  Companies  >  All News

News : Companies

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance ProfessionalsCalendarSectors

Wescoal acquire Pegasus Project

share with twitter share with LinkedIn share with facebook
share via e-mail
0
11/29/2011 | 08:49am CET
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
[email protected]
share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news "Companies"
06:47a CARBIOS : wins EuropaBio’s 2017 Most Innovative EU Biotech SME Award
06:43a TOYOTA MOTOR : launches new Lexus luxury sedan in Thailand
06:41a Brokers in Kazakhstan maybe allowed currency trading
06:37a WAL MART STORES : The Countdown to Cyber Monday Has Begun
06:37a WAL MART STORES : Walmart Helps Customers Rock Black Friday
06:37a SGS : NABL Furniture Accreditation for Manesar
06:32a BIRIMIAN : Appendix 3B, Prospectus and Listing Rule 7.1A Disclosure
06:31a CLARIANT : announces plan to update its strategy to further enhance growth and value creation
06:27a PACIFIC ENERGY : Results of 2017 AGM
06:27a AWE : Appendix 3Z - Bruce Phillips
Latest news "Companies"
Advertisement