Member access

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesHot NewsMost Read NewsRecomm.Business LeadersVideosCalendar 

Wescoal acquire Pegasus Project

11/29/2011 | 02:49am US/Eastern
Recommend:
0
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
Recommend :
0
React to this article
Latest news
Date Title
<1m ago ALCOA : Termination of a Material Definitive Agreement, Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant, Other Events, Financial Statements and Exhibits (form 8-K)
<1m ago OPHTHOTECH : Change in Directors or Principal Officers (form 8-K)
<1m ago TRANSOCEAN LTD. : Shareholders Elect Merrill A. "Pete" Miller, Jr. As Director
<1m ago FITCH : Municipal Ratings Tied to U.S. Sovereign Affirmed at 'AAA'; Outlook Stable
<1m ago CLEAR CHANNEL OUTDOOR : iHeartCommunications, Inc. : Announces Pricing of Offering of 9.0% Priority Guarantee Notes due 2022
<1m ago Exagen Diagnostics Announces Changes to Its Board of Directors
<1m ago MONSTER ARTS INC : CEO Wayne Irving II Discusses Monster Arts With The Stock Radio In Recent September 18, 2014 Interview
1m ago ASCENA RETAIL : Results of Operations and Financial Condition, Financial Statements and Exhibits (form 8-K)
1m ago SOLAR POWER : Change in Directors or Principal Officers (form 8-K)
2m ago JETBLUE AIRWAYS : Puts New Innovations on the Map
Latest news
Advertisement
Hot News 
DIXONS CARPHONE : EE In Talks For Phones 4U Stores - FT (PRESS)
MOPOWERED : Share Price Halves On Heavily Discounted Share Placing
SPRUE AEGIS : To Pay Maiden Interim Dividend As Profits Rise Strongly
MECOM : Form 8.5 (EPT/RI)-Mecom Group Plc
CHINANET ONLINE : Recognized at CECA's 2014 Chinese E-Commerce Industry Gateway Conference
Most Read News
1d ago BEST BUY : The Best Backpacking Sleeping Bag Awards Announced By OutdoorGearLab
1d ago FERRO : Enters into Agreement to Acquire Italian Tile Coatings Manufacturer Vetriceramici
12h ago SIEMENS : to sell stake in household appliances JV for 3 billion euro
2h ago Siemens splurges $7.6 billion on Dresser-Rand in U.S. shale market bet
10h ago Ultrasonic CEO resurfaces in China, denies taking off with cash
Most recommended articles
4d ago Main Italian lenders took 23 billion euros of cheap ECB cheap
2m agoDJBOND REPORT : Treasurys Climb As Investors Fret Over China
6m ago Siemens splurges $7.6 billion on Dresser-Rand in U.S. shale market bet
8m ago TSX hits six-week low on China worries
11m agoDJMARKET SNAPSHOT : China Growth Concerns Weigh On U.S. Stocks
Dynamic quotes  
ON
| OFF