ABN 13 009 125 651
Appendix 4E
Preliminary Final Report
For the year ended 30 June 2014
Results for announcement to market
in accordance with ASX Listing Rule 4.3A
CORPORATE DIRECTORY
Directors and Officers Country of Incorporation
Paul D'SYLVA Australia
(Interim Executive Chairman) Registered Office
Peter LANDAU Ground Floor
(Interim Executive Director) 1 Havelock Street
Lars SCHERNIKAU WEST PERTH WA 6005
(Non-Executive Director) Telephone: +61 8 9488 5220
Connie MOLUSI Facsimile: +61 8 9324 2400
(Non-Executive Director) Principal Place of Business
Company Secretary 9th Floor Fredman Towers
Jane FLEGG 13 Fredman Drive
Share Registry SANDTON SOUTH AFRICA 2196
Computershare Ltd Telephone: +27 11 881 1420
Level 2, Reserve Bank Building Facsimile: +27 11 881 1423
45 St Georges Terrace Home Exchange
PERTH WA 6000 Australian Securities Exchange
Telephone: +61 8 9323 2000 Level 40, Central Park
Facsimile: +61 8 9323 2033 152-158 St George's Terrace
Auditors Perth WA 6000
BDO Audit (WA) Pty Ltd Telephone: +61 8 9224 0000
38 Station Street Facsimile: +61 8 9381 1322
SUBIACO WA 6008 ASX Code: CCC
Telephone: +61 8 6382 4600 AIM Code: COOL
Facsimile: + 61 8 6382 4601 Email: admin@conticoal.com
Website: www.conticoal.com
Results for announcement to the market
2013 2014 Variance
$'000 $'000 %
Revenue from ordinary up from 62,230 to 68,715 (10%)
activities
Loss from continuing down from (34,573) to (24,818) (28%)
operationsafter
tax attributable to
members
Net loss attributable to down from (35,720) to (24,818) (28%)
members
Dividends
Dividends/distributions Amount per security Franked amount per
security
Final dividend - -
Interim dividend - -
The directors recommend that no dividend be paid for the year ended 30 June
2014 nor have any amounts been paid or declared by way of dividend since the
end of the previous financial year.
Audit
This report is based on financial statements which are in the process of
being audited.
Other significant information needed by an investor to make an informed
assessment of the Group's Financial Performance and Financial Position
See attached preliminary final report.
Commentary on results for the period
A commentary on the results for the period is contained within the financial
statements that accompany this announcement.
This information should be read in conjunction with Continental Coal's attached
preliminary final report.
Forward Looking Statement
This document includes certain statements that may be deemed "forward-looking
statements" and information. All statements in this document, other than
statements of historical facts, that address future production, reserve
potential, exploration drilling, exploitation activities and events or
developments that the Company expects to take place in the future are
forward-looking statements and information. Although the Company believes the
expectations expressed in such forward-looking statements and information are
based on reasonable assumptions, such statements are not guarantees of future
performance and actual results or developments may differ materially from those
in the forward-looking statements and information. Factors that could cause
actual results to differ materially from those in forward-looking statements
include market prices, exploitation and exploration successes, drilling and
development results, production rates and operating costs, continued
availability of capital and financing and general economic, market or business
conditions. Investors are cautioned that any such statements are not guarantees
of future performance and actual results or developments may differ materially
from those stated.
Review of Operations
Principal Activities
The principal activity of the Group during the year ended 30 June 2014 was the
acquisition, exploration, development and operation of thermal coal mines and
properties in South Africa. There were no significant changes in the nature of
the activities of the Group during the financial year.
Overview
During the year ended 30 June 2014 the Group continued its program of
establishing itself as a successful thermal coal mining, production,
exploration and development Group in Southern Africa focusing on the ramp up of
its flagship Penumbra Coal Mine and advancing the De Wittekrans coal project
with the granting of its mining right in September 2013.
Reserve and Resource Statement
The Group's Coal Resource and Reserve Statements are as follows:
Group Resources Statement - July 2014
PROJECT RESOURCE PROJECT GROSS TOTAL PROJECT CONTINENTAL'S
CATEGORY TONNES TONNES ATTRIBUTABLE
IN SITU IN SITU INTEREST
(GTIS) (t) (TTIS) (t)
Vlakvarkfontein Measured 8,703,480 6,803,316 44%
Penumbra 8,421,911 7,134,875 74%
De Wittekrans 52,330,387 47,097,100 74%
Wesselton II 4,201,199 3,570,800 74%
Leiden 4,309,133 3,862,500 74%
Total Measured 77,966,110 68,468,591
Vlakplaats Indicated 38,176,346 34,258,000 37%
Project X 2,969,951 2,672,000 56%
Penumbra 6,725,373 6,052,000 74%
De Wittekrans 73,733,941 66,358,000 74%
Vaalbank 8,809,511 7,928,000 52%
Wesselton II 5,112,340 4,344,000 74%
Leiden 1,996,754 179,500 74%
Total Indicated 137,524,216 121,791,500
Vlakplaats Inferred 16,276,680 12,190,000 37%
Wolvenfontein 36,725,119 31,200,000 74%
Project X 11,687,034 10,517,000 56%
De Wittekrans 66,618,671 59,940,000 74%
Knapdaar 42,064,528 35,750,000 74%
Vaalbank 13,937,555 12,540,000 52%
Wesselton II 8,648,522 7,330,000 74%
Mooifontein 3,092,970 2,620,000 74%
Leiden 12,057,828 10,851,400 74%
Kweneng (1) 2,159,000 2,051,050 100%
Total Inferred 213,267,907 184,989,450
GRAND TOTAL RESOURCES 428,758,233 375,249,541
Notes:
1. JORC compliant.
These coal resources and coal reserves (excluding Kweneng) have been defined in
accordance with the 2007 South African Code for Reporting of Mineral Resources
and Mineral Reserves Code (SAMREC Code). The SAMREC Code requires the use of
the South African National Standard : South African Guide to the Systematic
Evaluation of Coal Resources and Coal Reserves (SANS10320:2004) when
classifying and reporting coal resources and reserves. SANS10320:2004 uses the
principle of relative distances from boreholes with quality data for the
classification of coal resources. This standard was utilised by the Company's
consultants in calculating the project resources.
The above coal resource and coal reserve estimates are also in compliance with
and to the extent required by the 2012 Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves published by the Joint
Ore Reserves Committee of The Australasian Institute of Mining, Metallurgy,
Australian Institute of Geoscientists and Minerals Council of Australia (JORC
Code). Similarly to the SAMREC Code, the JORC Code uses the principle of
relative distances from boreholes with quality data for the classification of
coal resources. The SAMREC Code distances are narrower than those required by
the JORC Code, and hence, by reporting to SAMREC, the requirements of the JORC
Code have also been met
Coal Mine and Processing Operations
Health and Safety
The Group maintains a strong health and safety culture across all of its coal
mining and processing operations and continues to improve its health and safety
initiatives and policies across all of its operations. During the financial
year, eleven Dressing Station Case ("DSC") accidents were reported at the
Company's mining and processing operations - ten DSC accidents were reported at
the Penumbra Underground Mine and one at the Vlakvarkfontein Open Cast Mine and
one Medical Treatment Incident (MTI) was reported at the Penumbra Underground
Mine. All the accidents were relatively minor with no material impacts and
their causes have been addressed.
Operational Performance
Year ended 30 June Year ended 30 June
2014 2013
Run of Mine (ROM)Production
Vlakvarkfontein 1,382,487 1,526,469
Ferreira 247,129 559,107
Penumbra 498,176 143,299
Total ROM Production 2,127,792 2,228,875
Feed to Plant
Ferreira 269,670 627,329
Penumbra 491,424 143,299
Total Plant Feed 761,094 770,628
Export Yields
Ferreira 72% 70.4%
Penumbra 57.2% 36.8%
Domestic Sales 1,401,080 1,315,701
Export Sales 523,906 453,582
Total Coal Sales 1,924,986 1,769,283
Total ROM coal production for the year ended 30 June 2014 of 2,127,792t was
achieved with a full 12 months production at the Vlakvarkfontein Coal Mine, 6
months production at the Ferreira Coal Mine until end of life and ramp up
production from the Penumbra Coal Mine.
Feed to the Delta Processing Operations for the year ended 30 June 2014 was
761,094t. The feed from the Penumbra Coal Mine has steadily increased during
the year and is line with the ramp up of the Penumbra Coal Mine.
Export yields at the Penumbra Coal Mine have shown a steady increase during the
past 12 months with the average yield of 57.2% recorded for the ended 30 June
2014.
Domestic sales from the Vlakvarfontein Coal Mine have increased on a year-end
basis comparable to year ended 30 June 2013.
1. Vlakvarkfontein Coal Mine
Vlakvarkfontein Coal Mine produced 1,382,487t ROM for the year ended 30 June
2014, achieving its target production at a cost of ZAR 90.00/t (US$8.50/t) the
year ended 30 June 2014.
An average strip ratio of 2.22:1 was achieved for the year ended 30 June 2014.
Total thermal coal sales for the year ended 30 June 2014 were 1,149,216t to
Eskom and 251,861t non-select.
2. Ferreira Coal Mine
Ferreira Coal Mine produced 247,129t ROM for the year ended June 2014, before
its end of life in December 2013, with export yields averaging 72%.
Inventory clean-up at the Ferreira Coal Mine was completed in the first Quarter
of 2014. The rehabilitation work will commence upon finalisation of the closure
plan and appointing contractors.
3. Penumbra Coal Mine
The Penumbra Coal Mine delivered 498,176t ROM for the year ended 30 June 2014
comparable to the revised forecast of 500,000t at a FOB cost of ZAR 841.13
(US$79.40) per sales tonne.
During the initial ramp up stage the Company encountered stone rolls that are
displacing the coal seam in the current mining area and this is impacting on
the production rate and the delivered yield due to added contamination.
Management, in conjunction with mining consultants, have been reviewing the
planned production lay-out in order to mitigate the impact of the stone rolls
on the production rate of the continuous miners. As procedures are implemented
the ROM and yield are increasing with the month of June 2014 producing 58,013t
which is on track to the targeted 70,000t per month. Additional exploration
drilling is currently being carried out to ascertain the extent of the stone
rolls with the view to revising the production plan.
Export yields at the Penumbra Coal Mine averaged 57.2% for the year ended 30
June 2014. The yield is expected to improve to the planned 62% with the
increase in production and the mitigation of the additional contamination
caused by the stone rolls.
For the year ended 30 June 2014 ROM mining costs averaged ZAR 165.95/t
(US$15.50/t) and FOB export sales tonnes costs averaged ZAR 748.24/t (US$70.35/
t). Total FOB costs will reduce in the coming months given the forecast
increase in production.
The Company received ZAR 10.1 million revenue for the year ended 30 June 2014
from the ABSA forward hedging contract at the Penumbra Coal Mine.
2. DEVELOPMENT PROJECT
3.
1. De Wittekrans Coal Project
The De Wittekrans Development Project (De Wittekrans) is a potential
underground export and domestic thermal coal mining project at a
pre-development stage. Optimisation work on previous feasibility studies has
identified the opportunity to develop De Wittekrans into a major mining
operation with the potential to produce ~3.6Mtpa of ROM over the LOM.
A mining right was granted in September 2013 and the Integrated Water Use
License (IWUL) application was submitted, the Company awaits approval.
With mining right successfully executed in May 2014, the Company now has 12
months to commence mining operations, however should the IWUL not be received
within this 12 month period the mining right can be delayed.
During the last quarter of the year ended 30 June 2014 two sites were selected
for mining and these are now being evaluated as to which site will be selected
for the first phase of mining.
3. EXPLORATION PROJECTS
4.
1. Botswana Coal Projects
The Company is in advanced discussions in respect of the two remaining
Prospecting licenses (PL 340/2008 and PL 341/2008). PL341 has been transferred
and the transfer documents for PL340 have been submitted to the Botswana
Ministry of Minerals, Energy.
2. Vlakplaats
Vlakplaats is a 50:13:36 joint venture between the Company, Big Match Trading
34 (Pty) Ltd and Korea Resources Corporation. Therefore the Company only has an
effective interest of 37% in the project. A Prospecting Right has been granted
for this project.
Vlakplaats is considered a non-core asset and the Company will retain the
Prospecting Right in good standing while it evaluates divestment opportunities.
3. Other non-core assets
Project X, Vaalbank, Leiden.Knapdaar, Wolvenfontein, Wesselton II,Mooifontein
have all been considered as non-core assets which the Company will keep in good
standing order while it evaluates divestment opportunities
4. CORPORATE
5.
1. Bridge Finance and Recapitalisation
In February 2014 the Group executed a binding term sheet with UK corporate
advisory firm Empire Equity Limited ("Empire Equity") to provide $5 million
bridge funding and undertake a broader recapitalisation and restructure of the
Group and its financial arrangements.
The Group received the $5 million bridge funding from Empire Equity and made
key payments to current creditors and negotiated a 3 month standstill period to
recapitalize the Group. The standstill period was subsequently extended to 15
October 2014.
Empire Equity and/or its nominees (the "Investors") have invested in 7.5
million unsecured convertible promissory notes ("Notes") with a face value of
A$1.00 at a discounted issue price of A$0.6667 per Note and with a maturity
date of 4 months redeemable upon successful completion of the Groups
recapitalization. The Investors will receive a 6% fee on the Investment Amount
as well as 70 million options, subject to shareholder approval, for providing
the $5 million.
A condition to providing the funding was the restructure of the Board which
occurred on 13 February 2014.
The Investors also undertook to assist the Group in undertaking a rights issue
with the proceeds to be used to settle amounts owed by the Group to various
existing convertible note holders , loans and royalty holders, repay bridging
finance, reduce the Group's other borrowings, provide funds towards the
development of the Company's advanced coal mining projects and provide working
capital.
Subsequent to year ended 30 June 2014 the Group announced a fully underwritten
non-renounceable rights issue prospectus to raise approximately A$35.1m by way
of the issue of up to 7,035,234,408 new shares at an offer price of $0.005 per
new share.
2. Proposed listing on the Johannesburg Stock Exchange
The proposed listing has been postponed until such time as the recapitalisation
of the Company has been completed.
3. ASX and Aim share trading suspension
As at the date of this report Continental's securities on both the ASX and AIM
markets continue to be suspended. In line with the timetable disclosed in the
fully underwritten non-renounceable rights issue prospectus the Group
anticipates lifting of the suspension of Continentals securities on ASX and AIM
at completion of the Rights Issue on or about 2 October 2014.
Competent Persons Statement
The information in this report that relates to Coal Resources on
Vlakvarkfontein, Vlakplaats and Wolvenfontein is based on resource estimates
completed by Dr. Philip John Hancox. Dr. Hancox is a member in good standing of
the South African Council for Natural Scientific Professions (SACNASP No.
400224/04) as well as a Member and Fellow of the Geological Society of South
Africa. He is also a member of the Fossil Fuel Foundation, the Geostatistical
Association of South Africa, the Society of Economic Geologists, and a Core
Member of the Prospectors and Developer Association of Canada. Dr. Hancox has
more than 12 years' experience in the South African Coal and Minerals
industries and holds a Ph.D from the University of the Witwatersrand (South
Africa).
The information in this report that relates to Coal Resources on Penumbra, De
Wittekrans, Knapdaar, Leiden and Wesselton II is based on coal resource
estimates completed by Mr. Nico Denner, a full time employee of Gemecs (Pty)
Ltd. Mr. Denner is a member in good standing of the South African Council for
Natural Scientific Professions (SACNASP No. 400060/98) as well as a Member and
Fellow of the Geological Society of South Africa. He has more than 15 years'
experience in the South African Coal and Minerals industries.
The information in this report that relates to Coal Resources on Project X and
Vaalbank is based on coal resource estimates completed by Mr. Coenraad van
Niekerk, a full time employee of Gemecs (Pty) Ltd. Mr. van Niekerk is a member
in good standing of the South African Council for Natural Scientific
Professions (SACNASP No. 400066/98) as well as a Member and Fellow of the
Geological Society of South Africa. He has more than 38 years' experience in
the South African Coal and Minerals industries.
The information in this report that relates to Coal Resources on Mooifontein is
based on coal resource estimates completed by Mr. Dawie van Wyk, a full time
employee of Geocoal services (Pty) Ltd. Mr. van Wyk is a member in good
standing of the South African Council for Natural Scientific Professions
(SACNASP No. 401964/83) as well as a Member and Fellow of the Geological
Society of South Africa. He has more than 30 years' experience in the South
African Coal and Minerals industries.
The Coal Reserves on Vlakvarkfontein, and is based on reserve estimates
completed by Eugène de Villiers. Mr. de Villiers is a graduated mining engineer
(B.Eng) Mining from the University of Pretoria and is professionally registered
with the Engineering Council of South Africa (Pr.eng no - 20080066). He is also
a member of the South African Institute of Mining and Metallurgy (SAIMM
Membership no. 700348) and the South African Coal Managers Association (SACMA
Membership no. 1742). Mr. de Villiers has been working in the coal industry
since 1993 and has a vast amount of production and mine management as well as
project related experience.
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 30 JUNE 2014
Note Consolidated
2014 2013
$'000 $'000
Operating sales revenue 2 68,715 62,230
Operating expenses (58,714) (55,181)
Depreciation & amortisation (7,022) (4,190)
Cost of sales 3 (65,736) (59,371)
Gross profit 2,979 2,859
Other income 2 1,962 4,130
Administration expenses 3 (7,629) (11,533)
Finance expenses 3 (27,215) (13,888)
Impairment expenses 3 (2,208) (28,126)
Marketing expenses (225) (266)
Other expenses 3 (1,339) (2,618)
Loss before income tax (33,676) (49,442)
Income tax benefit 356 1,101
Loss after income tax from continuing (33,320) (48,341)
operations
Loss from discontinued operation - (1,147)
Loss for the year (33,320) (49,488)
Net profit/(loss) is attributable to:
Owners of Continental Coal Limited (24,818) (35,720)
Non-controlling interests (8,502) (13,768)
(33,320) (49,488)
Loss per share for loss from continuing
operations
attributable to the ordinary equity
holders of the Company:
Basic loss per share 4 (0.004) (6.56)
(cents per share)
Diluted loss per share 4 (0.004) (6.56)
(cents per share)
The above Consolidated Income Statement should be read in conjunction with the
Notes to the Financial Statements.
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2014
Note Consolidated
2014 2013
$'000 $'000
Loss for the year (33,320) (49,488)
Other Comprehensive Income/(Loss)
Items that may be reclassified to profit
or loss
Exchange differences on translation of (1,932) (6,052)
foreign operations
Changes in the fair value of cashflow - 3,087
hedges, net of tax
Other comprehensive loss for the year, - (2,965)
net of tax
Total comprehensive loss for the year (35,252) (52,453)
Total comprehensive income/(loss) is
attributable to:
Owners of Continental Coal Limited (25,926) (38,177)
Non-controlling interests (9,326) (14,276)
(35,252) (52,453)
Total comprehensive loss for the period
attributable to
owners of Continental Coal Limited arises
from:
Continuing operations (25,926) (37,030)
Discontinued operations - (1,147)
(25,926) (38,177)
The above Consolidated Statement of Other Comprehensive Income should be read
in conjunction with the Notes to the Financial Statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2014
Note Consolidated
2014 2013
$'000 $'000
ASSETS
CURRENT ASSETS
Cash and cash equivalents 5 2,989 4,496
Trade and other receivables 6 4,681 7,744
Inventories 7 1,167 4,862
17,102
Non-current assets classified as held for -
sale
TOTAL CURRENT ASSETS 8,837 17,102
NON-CURRENT ASSETS
Trade and other receivables 6 2,473 2,981
Other assets 2,472 1,658
Derivative financial instruments 7,050 2,400
Exploration expenditure 10 47,417 54,363
Development expenditure 11 65,105 76,344
Property, plant and equipment 12 12,628 11,933
Deferred tax assets 13 4,081 3,022
TOTAL NON-CURRENT ASSETS 141,226 152,701
TOTAL ASSETS 150,063 169,803
CURRENT LIABILITIES
Trade and other payables 14 7,451 12,459
Deferred revenue 15 - 5,859
Income tax payable 451 1,115
Provisions 4,601 296
Borrowings 16 68,902 18,531
Derivative financial instruments 80 228
Other financial liabilities 17 4,419 3,633
Provision for rehabilitation 19 3,173 3,759
TOTAL CURRENT LIABILITIES 89,077 45,880
NON-CURRENT LIABILITIES
Deferred revenue 15 - 5,467
Borrowings 16 22,865 52,141
Other financial liabilities 17 6,633 6,984
Deferred tax liability 18 19,511 23,009
Provision for rehabilitation 19 8,787 9,594
TOTAL NON-CURRENT LIABILITIES 57,796 97,195
TOTAL LIABILITIES 146,873 143,075
NET ASSETS 3,190 26,728
EQUITY
Issued capital 20 246,533 236,032
Reserves (1,905) (2,838)
Accumulated losses (234,239) (198,987)
Capital and reserves attributable to 10,389 34,207
owners of
Continental Coal Limited
Amounts attributable to non-controlling (7,198) (7,479)
interests
TOTAL EQUITY 3,190 26,728
The above Consolidated Statement of Financial Position should be read in
conjunction with the notes to the Financial Statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2014
Share Accumulated Foreign Other Hedging Option Share Shares Total Non- Total
Capital losses Currency Reserve Reserve Reserve Based and Controlling
Ordinary Translation Payment Options Interest
Reserve Reserve to
be
Issued
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Balance at 1 220,015 (164,739) (19,190) (9,944) (508) - 30,798 - 56,433 8,089 64,522
July 2012
Loss for the - (35,720) - - - - - - (35,720) (13,768) (49,488)
year
Exchange - - (4,741) - - - - - (4,741) (1,311) (6,052)
differences on
translation of
foreign
operations
Cashflow - - - - 2,284 - - - 2,284 803 3,087
hedges, net of
tax
Total - (35,720) (4,741) - 2,284 - - - (38,177) (14,276) (52,453)
comprehensive
loss for the
year
Transactions
with owners in
their capacity
as owners:
Shares issued 16,117 - - - - - - - 16,117 - 16,117
during the year
Transaction (100) - - - - - - - (100) - (100)
costs
Options issued - - - - - - 701 - 701 - 701
Transfers - 1,472 - (1,472) - - - - - - -
Transactions - - - (766) - - - - (766) (1,026) (1,792)
with
non-controlling
interests
Dividends paid - - - - - - - - - (266) (266)
Balance at 30 236,032 (198,987) (23,931) (12,182) 1,776 - 31,499 - 34,207 (7,479) 26,728
June 2013
Loss for the - (35,252) - - - - - - (24,818) (8,502) (33,320)
year
Exchange - - (3,716) - - - - - (3,716) (824) (4,540)
differences on
translation of
foreign
operations
Cashflow - - - - 4,650 - - - 4,650 - 4,650
hedges, net of
tax
Total - (35,252)) (3,716) - 4,650 - - - (25,926) (9,326) (35,252)
comprehensive
loss for the
year
Transactions
with owners in
their capacity
as owners:
Shares issued 10,501 - - - - - - - 10,501 - 10,501
during the year
Transaction - - - - - - - - - - -
costs
Options issued - - - - - - - - - - -
Transfers - - - - - - - - - - -
Transactions - - - - - - - - - 2,128 2,128
with
non-controlling
interests
Dividends paid - - - - - - - - - - -
Balance at 30 246,533 (234,239) (27,647) (12,182) 6,426 - 34,499 - 10,389 (7,198) 3,190
June 2014
The above Consolidated Statement of Changes in Equity should be read in
conjunction with the notes to the Financial Statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2014
Consolidated
2014 2013
$'000 $'000
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 64,836 58,505
Payments to suppliers and employees (60,864) (70,488)
Interest received 676 249
Other income 121 2,196
Proceeds on settlement of commodity hedges 1,018 336
Income tax paid (1,126) (1,080)
Net cash (used in)/provided by operating 2,127 (10,282)
activities
CASH FLOWS FROM INVESTING ACTIVITIES
Payment for additional ownership interest in - (8,839)
subsidiary
Exploration expenditure (326) (660)
Development costs (5,190) (20,393)
Purchase of property, plant and equipment (2,036) (6,675)
Proceeds on disposal of property, plant and - 1,092
equipment
Payments in relation to SIOC transaction - (331)
Proceeds from sale of Vanmag - 8,696
Payments for purchase of other assets (6) (642)
Net cash (used in) investing activities (7,558) (27,752)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares, net of - 8,597
transaction costs
Interest and borrowing costs (117) (1,227)
Proceeds from borrowings 5,908 26,890
Repayment of borrowings (1,886) (3,537)
Payment to fund Penumbra standby facility - (1,930)
Payment of finance related royalty - (533)
Dividends paid - (266)
Net cash provided by financing activities 3,924 27,994
Net (decrease)/increase in cash held (1,507) (10,040)
Effect of the exchange rate changes on the (1,042)
balance of cash held in
foreign currencies at the beginning of the
financial year
Cash at beginning of financial year 4,496 14,595
Cash at end of financial year 2,989 3,513
The above Consolidated Statement of Cash Flows should be read in conjunction
with the Notes to the Financial Statements.
Note 1: Basis of the Preparation of the Preliminary Final Report
The preliminary final report has been prepared in accordance with the ASX
Listing rule 4.3A and the disclosure requirements of ASX Appendix 4E.
This report has been prepared in accordance with Australian Accounting
Standards, Urgent Issues Group Interpretations, other authoritative
pronouncements of the Australian Accounting Standards Board and the
Corporations Act 2001.
As such this preliminary final report does not include all the notes of the
type included in an annual financial report and accordingly, should be read in
conjunction with the annual report for the year ended 30 June 2013, and with
any public announcements made by Continental Coal Limited during the reporting
period in accordance with the disclosure requirements of the Corporations Act
2001.
The accounting policies have been consistently applied, unless otherwise
stated.
The preliminary report has been prepared on the going concern basis, which
contemplates continuity of normal business activities and the realisation of
assets and the settlement of liabilities in the ordinary course of business
Note 2: Revenue and other income
Consolidated
2014 2013
$'000 $'000
Revenue from continuing operations
* Export coal sales 38,735 35,508
* Eskom coal sales 26,673 25,941
* Other coal sales 3,307 781
Total revenue from continuing operations 68,715 62,230
Other income
* Foreign exchange gain 64 200
* Recovery of costs 27 2,196
* Interest received 676 502
* Net gain on fair values of derivative 147 777
financial instruments (note 13e)
* Realised gains on commodity hedges 1,018 336
* Gain on debt settlement - 119
* Miscellaneous income 30 -
Total other income 1,962 4,130
Note 3: Expenses
(a) Loss before income tax includes the following
specific expenses:
Cost of sales
* Mining 26,836 35,221
* Export costs 8,541 6,405
* Processing 4,773 5,265
* Materials handling 4,395 3,813
* Indirect costs 3,727 3,324
* Administration costs 3,024 2,641
* Stock on hand movement 3,571 -
* Mining royalties 873 1,153
* Depreciation & amortisation 7,022 4,190
* Bought in coal 2,974 -
Total cost of sales 65,736 59,371
Finance costs
- Interest and borrowing costs 8,436 4,546
- Share based payments 100 -
- Royalty expense 745 3,639
- Convertible note interest accretion 870 2,047
- EDF interest 13,451 623
- Other borrowing costs 3,613 3,033
Total finance costs 27,215 13,888
Impairment
- Impairment of exploration expenditure (ii) 2,208 26,661
- Impairment of property, plant, and equipment - 1,465
(iii)
Total impairment 2,208 28,126
Administration & Other Expenses
- Employee related costs 2,994 3,769
- Key management personnel 688 1,543
- Pre feasibility costs in relation to other 214 62
projects
- Consultants 942 2,083
- Share based payments 100 429
- Loss on debt settlement - 626
- Legal fees 671 582
- Occupancy 183 276
- Foreign exchange loss 1,932 1,122
- Depreciation & amortisation 349 216
i. The impairment charge of $2,208,000 recognised in the year ended 30 June
2014 relates to the carrying values of Vaalbank. The impairment charge of
$26,661,000 recognised in the year ended 30 June 2013 relates to the
carrying values of Project X, Vlakplaats, and Wesselton 2.
Note 4: Loss per Share (EPS)
Consolidated
2014 2013
$'000 $'000
(a) Basic loss per share
From continuing operations attributable to (0.004) (6.56)
owners of
Continental Coal Limited
From discontinued operation attributable to - (0.22)
owners of
Continental Coal Limited
(0.004) (6.78)
(b) Reconciliation of loss used in calculating loss
per share
Loss for the year from continuing operations (24,818) (34,573)
attributable to owners of
Continental Coal Limited
From discontinued operation attributable to - (1,147)
owners of
Continental Coal Limited
Loss used to calculate basic EPS (24,818) (35,720)
Loss used in the calculation of dilutive EPS (24,818) (35,720)
No. No.
(c) Weighted average number of shares used as the
denominator
Weighted average number of ordinary shares 697,009,056 526,964,473
outstanding during the year
used in calculating basic EPS
Weighted average number of ordinary shares 697,009,056 526,964,473
outstanding during the year
used in calculating dilutive EPS
(d) Diluted earnings per share
The Group's potential ordinary shares were not
considered dilutive, and as
a result, diluted EPS is the same as basic EPS.
(e) Potential ordinary shares that could dilute EPS
in the future
Weighted average number of ordinary shares 697,009,056 526,964,473
(basic)
Effect of share options on issue 126,130,027 162,130,027
Effect of conversion of debt to equity shares 36,000,000 -
issued post year end
Weighted average number of ordinary shares 859,139,083 689,094,500
(diluted) at 30 June
Note 5: Cash and Cash Equivalents
Consolidated
2014 2013
$'000 $'000
Cash at bank and in hand 2,989 4,496
2,989 4,496
Reconciliation of cash
Cash at the end of the financial year as shown in the
Consolidated Statement of
Cash Flows is reconciled to items in the Consolidated
Statement of Financial Position
as follows:
Cash and cash equivalents 2,989 4,496
Bank overdrafts - (983)
2,989 3,513
Note 6: Trade and Other Receivables
Consolidated
2014 2013
$'000 $'000
CURRENT
Trade receivables (a) 2,547 4,588
Other receivables (b) 1,304 1,012
Prepayments 830 151
Restricted cash (c) - 1,993
Total current receivables 4,681 7,744
NON-CURRENT
Other receivables (d) 2,473 2,981
Total non-current receivables 2,473 2,981
2014
a. The Group's trade receivables are generally settled within 30 days. No
interest is charged on outstanding balances.
b. The majority of other receivables relates to VAT recoverable by the South
African subsidiary and deposits.
2013
c. The majority of the restricted cash balance relates to the Penumbra equity
standby facility of ZAR 17,500,000 ($1,930,000) funded by the Group.
d. As part of the transaction to secure SIOC as the Group's Black Economic
Empowerment (BEE) partner during the 2012 year, the Group transferred ZAR
75,000,000 (approximately $9,180,000) of its intercompany loan balance to
the new BEE partner. The effect of this transfer was to increase the
Group's external receivables and borrowings by the same amount. The
receivable balance at year end is inclusive of principal and accrued
interest at 3% per annum. It is denominated in South African Rand, and its
fair value has been determined using a 16.5% discount rate and a repayment
date of 30 June 2022 (2012: 16.6% discount rate and repayment date of 30
June 2017). An increase in the discount of $838,000 (2012: unwinding of
discount of $162,000) has been recognised within transactions with
non-controlling interests within equity and not in the Consolidated Income
Statement.
Note 7: Inventories
Consolidated
2014 2013
$'000 $'000
CURRENT
Coal stockpiles 1,167 4,862
Total coal stockpiles 1,167 4,862
Note 8: Other Assets
NON-CURRENT
Mining rehabilitation fund 2,472 1,658
2,472 1,658
As approved by the Department of Mineral Resources in South Africa, the Group
makes monthly contributions to a Liberty investment product to fund future
environmental rehabilitation work at the Group's Vlakvarkfontein and Penumbra
Mines.
The Liberty investment products consist primarily of money market accounts.
These investments are not available for general purposes of the Group and are
classified as restricted funds. All income earned on these funds is re-invested
Note 9: Controlled Entities
Controlled Entities Consolidated Country of Percentage Owned (%)*
Incorporation
30 June 30 June
2014 2013
Subsidiaries of Continental Coal
Limited ("CCC"):
Continental Coal Ltd ("CCL SA") South Africa 74 74
Subsidiaries of Continental Coal Ltd
Tsimpilo Trading 45 (Pty) Limited South Africa 100 100
Ayoba Taboo Trading 137 (Pty) Ltd South Africa 100 100
Idada Trading 310 (Pty) Ltd South Africa 70 70
Kebragen (Pty) Ltd South Africa 75 75
City Square Trading 437 (Pty) Ltd South Africa 100 100
Ntshovelo Mining Resources (Pty) Ltd South Africa 50 50
(i)
Ultimatum Challenge Trading (Pty) Ltd South Africa 50 50
(ii)
Mashala Resources (Pty) Ltd South Africa 100 100
Subsidiaries of Mashala Resources
(Pty) Ltd
Namib Drilling (Pty) Ltd South Africa 100 100
Wessleton Opencast (Pty) Ltd South Africa 100 100
BW Mining (Pty) Ltd South Africa 100 100
Copper Sunset Trading 148 (Pty) Ltd South Africa 100 100
Mandla Coal Resources (Pty) Ltd South Africa 100 100
Penumbra Coal Mining (Pty) Ltd South Africa 100 100
Mashala Hendrina Coal Pty Ltd (Pty) South Africa 100 100
Ltd)
Weldon Investments (Pty) Ltd Botswana 100 100
* Percentage of voting power is in proportion to
ownership
Ntshovelo - 60% economic interest even though 50% equity interest.
Ultimatum Challenge Trading - 63% economic interest even though 50% equity
interest.
Note 10: Exploration Expenditure
Consolidated
2014 2013
$'000 $'000
NON-CURRENT
Exploration expenditure capitalised
- Exploration and evaluation phases - direct 40,893 45,957
- Exploration and evaluation phases - indirect 6,524 8,406
Total exploration expenditure 47,417 54,363
Mineral rights held by South African subsidiary
Project name Prospecting Current holder of Holder of right once Date
or mining mining or transaction is Granted
right prospecting right completed
reference
Vlakvarkfontein MP 300 MR Ntshovelo Mining Ntshovelo Mining 2 February
Resources (Pty) Ltd Resources (Pty) Ltd 2010
Vaalbank MP 1689 PR Misty Sea Trading Kebragen (Pty) Ltd 16 April
262 (Pty) Ltd 2008
Project X MP 1640 PR Misty Sea Trading Idada Trading 310 16 April
262 (Pty) Ltd (Pty) Ltd 2008
Vlakplaats MP 1520 PR Ultimatum Challenge Ultimatum Challenge 15 July
Trading (Pty) Ltd Trading (Pty) Ltd 2008
Wolvenfontein Ultimatum Challenge Ultimatum Challenge 15 July
Trading (Pty) Ltd Trading (Pty) Ltd 2008
Ferreira MP 345 MR Mashala Resources Mashala Resources 19 May 2010
(Pty) Ltd (Pty) Ltd
Knapdaar MP 1494 PR Mashala Resources Mashala Resources 5 February
(Pty) Ltd (Pty) Ltd 2008
Leiden MP 401 PR Mashala Resources Mashala Resources 17 October
(Pty) Ltd (Pty) Ltd 2006
Mooifontein MP 713 PR Mashala Resources Mashala Resources 17 October
Ptn 13 & 16 (Pty) Ltd (Pty) Ltd 2009
Wesselton II MP 231 MR Mashala Resources Mashala Resources 19 February
(Pty) Ltd (Pty) Ltd 2009
Penumbra MP 247 MR Penumbra Coal Mining Penumbra Coal Mining 19 May 2010
(Pty) Ltd (Pty) Ltd
De Wittekrans MP 97 PR Mashala Hendrina Mashala Hendrina 26 April
Coal (Pty) Ltd Coal (Pty) Ltd 2006
MP 365 MR
Botswana Weldon Investments Weldon Investments 1 April
(Pty) Ltd (Pty) Ltd 2009
Note 11: Development Expenditure
Consolidated
2014 2013
$'000 $'000
NON-CURRENT
- Development expenditure at cost 85,932 89,903
- Accumulated depreciation (20,827) (13,559)
Total development expenditure 65,105 76,344
The Development expenditure relates mainly to the mining infrastructure assets
and the environmental assets for closure costs in relation to the Penumbra,
Vlakvarkfontein, and Ferreira mines.
Recoverability of the carrying amount of development assets is dependent on the
successful development and commercial exploration or sale of the respective
mining permits.
Note 12: Property, Plant & Equipment
Consolidated
2014 2013
$'000 $'000
PLANT AND EQUIPMENT
Plant and equipment at cost 15,162 14,251
Accumulated depreciation (2,534) (2,318)
Net book amount 12,628 11,933
Note 13: Deferred Tax Assets
Deferred tax asset
Tax losses available for set off against 4,081 2,045
future taxable income
Other - 977
4,081 3,022
Note 14: Trade and Other Payables
CURRENT
Unsecured liabilities
Trade payables 6,477 8,997
Sundry payables and accrued expenses 974 2,670
Accrued interest - 792
7,451 12,459
Note 15: Deferred Revenue
In previous financial years the Group received USD $20m sales proceeds in
advance of the delivery of coal in accordance with the coal prepayment facility
with EDF Trading. The prepayment facility was secured over all assets of the
Group's South African mining interests apart from Penumbra.
During the year ended 30 June 2014 the EDF coal prepayment facility was
restructured into a financial loan repayable through 24 monthly instalments
commencing in July 2014. EDF has retained its security over the Group's South
African mining interests.
During the year ended 30 June 2014, approximately $2,5m (2013: $5m) of the
deferred revenue balance was earned and recognised on the delivery of coal to
EDF Trading prior to the restructure.
Consolidated
2014 2013
$'000 $'000
Deferred revenue - current - 5,859
Deferred revenue - non-current - 5,467
Total deferred revenue - 11,326
Note 16: Borrowings
Consolidated
2014 2013
$'000 $'000
CURRENT
Bank overdraft - secured - 983
Convertible Note - unsecured (a) 1,114 932
Convertible Note - unsecured (b) 106 100
Convertible Note - unsecured (c) 5,309 4,510
Convertible Note - unsecured (d) 11,190 9,589
Convertible Note - unsecured (e) 3,800 2,000
Other loans - unsecured (f) 847 160
Related party working capital facility (g) - 257
Bank debt - secured (h) 26,000 -
EDF loan (i) 15,536 -
Bridge funding (k) 5,000 -
68,902 18,531
NON-CURRENT
Bank debt - secured (h) - 25,034
Related party loans - unsecured (j) 22,698 26,856
Other facilities 167 251
22,865 52,141
a. The parent entity issued $1,000,000 of convertible notes on 5 November
2010. The notes are convertible at the option of the holder based upon the
share price at the time of conversion. At inception, the conversion rate
was $0.80. On 5 November 2011 the conversion rate was reset to the higher
of $0.60 or the 15 day VWAP prior to the first anniversary date. On 5
November 2012 the conversion rate was reset to the higher of $0.55 or the
15 day VWAP prior to the first anniversary date. On 5 November 2013 the
conversion rate was reset to the higher of $0.55 or the 15 day VWAP prior
to first anniversary date. Interest is payable bi-annually at a rate of 10%
per annum either in cash or in shares at a 5% discount to the 30 day VWAP
at the option of the holder. All stated conversion rates have been adjusted
for the 10:1 equity consolidation that occurred on 26 August 2011. The
convertible notes matured on 5 November 2013. Refer to details of
standstill arrangements below.
b. The parent entity issued $100,000 of convertible notes on 26 November 2010.
The notes are convertible at the option of the holder based upon the share
price at the time of conversion. Interest is payable bi-annually at a rate
of 10% per annum. The convertible notes matured on 26 November 2013. Refer
to details of standstill arrangements below.
c. The parent entity issued $4,900,000 of convertible notes on 26 November
2010. At inception, the conversion rate was $0.80. On 26 November 2011 the
conversion rate was reset to the higher of $0.60 or the 15 day VWAP prior
to the first anniversary date. On 26 November 2012 the conversion rate was
reset to the higher of $0.55 or the 15 day VWAP prior to the first
anniversary date. On 26 November 2013 the conversion rate was reset to the
higher of $0.55 or the 15 day VWAP prior to first anniversary date.
Interest is payable bi-annually at a rate of 10% per annum either in cash
or in shares at a 5% discount to the 30 day VWAP at the option of the
holder. The notes are convertible at the option of the holder based upon
the share price at the time of conversion. Interest is payable annually at
a rate of 10% per annum either in cash or in shares at a 5% discount to the
30 day VWAP at the option of the holder. All stated conversion rates have
been adjusted for the 10:1 equity consolidation that occurred on 26 August
2011. The convertible notes matured on 26 November 2013. Refer to details
of standstill arrangements below.
Note 16: Borrowings (cont'd)
d. The parent entity issued $10,000,000 of convertible notes on 25 February
2011. The notes are convertible at a fixed rate of $0.80 at the option of
the holder. Interest is payable annually at a rate of 10% per annum either
in cash or in shares at a 5% discount to the 30 day VWAP at the option of
the holder. The maturity date of the convertible note is 25 February 2014.
Refer to details of standstill arrangements below.
e. The parent entity issued $3,800,000 of convertible notes in March 2013. The
notes are convertible at the option of the holder based upon the share
price at the time of conversion. The conversion rate is the lesser of 80%
of the VWAP over the 10 days prior to conversion or 125% of the VWAP over
the 10 days prior to note execution date. The convertible notes matured in
September 2013 and are secured over all assets of the Australian parent
company Continental Coal Ltd. Refer to details of standstill arrangements
below.
f. Loans are interest bearing at 10% per annum and were due to be repaid on or
before 30 June 2013. Refer to details of standstill arrangements below.
g. The working capital facility has been provided by Stonebridge Trading 36
Pty Ltd, a Group with a non-controlling interest in the Group. The facility
is interest free with no set term of repayment.
h. The Group's initial drawdown of the ABSA Capital project finance facility
occurred 12 December 2012, providing the Group with funding to meet
outstanding capital development costs and underground mine equipment costs
in relation to Penumbra. During the year ended 30 June 2014 the facility of
the ZAR 253,000,000 was fully drawn down. The facility is denominated in
South African Rand and is repayable in escalating amounts during the second
month of each quarter commencing August 2014 and concluding November 2019.
The percentage of the facility to be repaid each calendar year is as
follows: 2014 - 2%; 2015 - 11.28%; 2016 - 15.64%; 2017 - 21.32%; 2018 -
24.88%; and 2019 - 24.88%. The facility is secured over all assets of
Penumbra Coal Mining (Pty) Ltd ("Penumbra"), including project bank
accounts, trade and other debtors, property and equipment, contractual
rights to licences/permits, and Witbank farms. The facility is guaranteed
by Continental Coal Ltd ("CCC"), the Group's South African subsidiary
Continental Coal Ltd ("CCL"), and Mashala Resources (Pty) Ltd.
Additionally, Mashala has provided its shareholding in Penumbra and its
inter-company loan receivable from Penumbra as security for the facility.
Half of the drawdown bears interest at JIBAR at drawdown date; the
remaining half is fixed with interest rate swaps.
The Group received notice from ABSA that a default event had occurred in March
2014. The directors are working with ABSA to rectify the default as part of the
recapitalisation process.
i. During the year ended 30 June 2014, the EDF coal prepayment facility was
restructured into a financial loan repayable through 24 monthly instalments
commencing in July 2014. The loan bears interest at 10% per annum and
interest will be capitalised until June 2014. Executing binding legal
agreements for this restructure are dependent on the recapitalisation of
the Group and EDF being provided a second ranking security over the
Penumbra underground coal mine and its assets. EDF has retained its
security over the Group's South African mining interests (apart from
Penumbra).
j. Related party borrowings of $22,698,000 relate to ZAR 140,000,000 received
from SIOC-cdt, the Group's South African BEE partner during the 2012
financial year, and ZAR 75,000,000 transferred from the Group's inter-Group
loan to SIOC-cdt during the 2012. The loan is repayable (pro-rata with the
inter-company loan payable to the parent entity) as and when the Group has
the necessary cash available having regard to the foreseeable cash flow
requirements of the Group with reference to its budgeted expenditure
requirements. In effect, the SIOC financing (26%) can not be paid until pro
rata distributions are also repaid to the parent entity (74%).
Note 16: Borrowings (cont'd)
k. On 14 February 2014, the Group executed a binding term sheet with UK
corporate advisory firm Empire Equity Limited ("Empire Equity") to provide
$5 million bridge funding and undertake a broader recapitalisation and
restructure of the Group and its financial arrangements. The Group received
the $5 million bridge funding from Empire Equity and made key payments to
current creditors. Empire Equity and/or its nominees (the "Investors") have
invested in 7.5 million unsecured convertible promissory notes ("Notes")
with a face value of A$1.00 at a discounted issue price of A$0.6667 per
Note and with a maturity date of 4 months redeemable upon successful
completion of the Groups recapitalization. The Investors will receive a 6%
fee on the Investment Amount as well as 70 million options, subject to
shareholder approval, for providing the $5 million. Refer to details of
standstill arrangements below.
Standstill arrangements
On 10 February 2014 the Company negotiated a 90 day standstill period,
subsequently extended to 15 October 2014, with these parties and certain trade
and other creditors of the Company. The Company must meet the specified
recapitalisation milestones to ensure the standstill arrangements are in place
during the standstill term.
Note 17: Other Financial Liabilities
During a previous financial year, the Group recorded a royalty liability in
relation to a USD $1 per tonne royalty payable on all coal produced by the
Group's South African mining operations, capped at 15,000,000 tonnes.
The royalty is payable based on coal produced attributable to the parent
company, therefore the royalty is only payable on 74% of total coal produced
based on the parent company's shareholding in Continental Coal Ltd South
Africa.
The royalty arises from a financing arrangement entered into in a prior
financial year. Accordingly, the expense in relation to the royalty of
$4,419,458 (2013: $3,639,000) is considered to be a financing cost and is
included within financing expenses in the Consolidated Income Statement.
Consolidated
2014 2013
$'000 $'000
Current
Royalty liability 4,419 3,633
4,419 3,633
Non-current
Royalty liability 6,633 6,984
6,633 6,984
Note 18: Deferred Tax Liability
Consolidated
2014 2013
$'000
$'000
Non-current
Deferred tax arising on business 19,511 23,009
combinations
19,511 23,009
The deferred tax liability arises in relation to the difference between the
carrying amount of exploration and development expenditure for accounting
purposes and the cost base of the assets for tax purpose in accordance with the
requirements of Australian Accounting Standard AASB 112 Income Taxes.
The Group does not have a tax payable in relation to the deferred tax liability
at 30 June 2014 or 30 June 2013 and as anticipated the deferred tax liability
has reduced as the development expenditure is amortised.
Note 19: Provision for Rehabilitation
The Group's provision for rehabilitation relates to environmental liability for
Vlakvarkfontein, Ferreira, and Penumbra. South African mining companies are
required by law to undertake rehabilitation work as part of their ongoing
operations. The expected timing of the cash outflows in respect of the
provision is on the closure of the mining operations. Management has assessed
that no environmental liability exists for the other projects as only
exploration activities have been performed and rehabilitation has taken place
as damages were incurred
Consolidated
2014 2013
$'000 $'000
Current
Mining rehabilitation fund 3,173 3,759
3,173 3,759
Non-current
Mining rehabilitation fund 8,787 9,594
8,787 9,594
Note 20: Issued capital
Consolidated
2014 2013
$'000 $'000
781,692,712 (2013: 684,104,446) fully paid 246,533 236,032
ordinary shares
246,533 236,032
a. Movement 2014 No. $'000
Balance at 1 July 2013 684,104,446 236,032
16/10/13 - Convertible note interest settled in 5,000,000 155
shares
28/11/13 - To director in accordance with 1,000,000 20
employment contract
06/12/13 - Convertible note interest and extension 15,588,266 326
fee
30/06/14 - Collateral shares in relation to 76,000,000 1,520
bridging loan
Balance at 30 June 2013 781,692,712 246,533
b. Movement 2013 No. $'000
Balance at 1 July 2012 430,742,398 220,015
02/07/12 - Conversion of debt to equity 6,038,647 398
09/07/12 - Conversion of debt to equity 9,113,001 963
03/09/12 - Conversion of debt to equity 10,000,000 309
20/09/12 - Conversion of debt to equity 8,370,540 335
05/10/12 - Conversion of debt to equity 7,259,390 360
18/10/12 - To convertible note holder as upfront 1,537,796 60
coupon payment in relation to
new convertible note provided to the Group
02/11/12 - Conversion of debt to equity 6,830,602 335
02/11/12 - To convertible note holder as upfront 409,837 20
coupon payment in relation to
new convertible note provided to the Group
22/11/12 - Conversion of debt to equity 9,213,762 335
22/11/12 - To convertible note holder as upfront 552,826 20
coupon payment in relation to
new convertible note provided to the Group
30/11/12 - To consultants as consideration for 1,000,000 45
corporate advisory services
provided to the Group
06/12/12 - To consultants as consideration for 273,771 22
corporate advisory services
provided to the Group
06/12/12 - To lender as consideration for new 2,000,000 88
borrowings facility provided to
the Group
06/12/12 - To the investor as consideration for 6,741,573 297
finance facility provided to the
Group
07/12/12 - Conversion of debt to equity 8,581,237 335
07/12/12 - To consultants as consideration for 514,875 20
capital raising services
provided to the Group
07/12/12 - To consultants as consideration for 1,000,000 43
corporate advisory services
provided to the Group
18/12/12 - To convertible note holder as upfront 939,346 35
coupon payment in relation to
new convertible note provided to the Group
10/01/13 - To convertible note holder as 939,346 35
consideration for convertible note
facility provided to the Group
10/01/13 - Conversion of debt to equity 8,575,006 557
24/01/13 - Placement 7,500,000 440
Note 20: Issued capital (cont'd)
b. Movement 2013 No. $'000
22/02/13 - Conversion of debt to equity 10,000,000 570
01/03/13 - Conversion of debt to equity 5,000,000 250
06/03/13 - Placement 10,000,000 486
15/03/13 - Royalty settlement 5,603,666 288
21/03/13 - Conversion of debt to equity 5,681,818 250
25/03/13 - To consultants as consideration for 2,000,000 130
corporate advisory services
provided to the Group
09/04/13 - Placement 5,000,000 233
15/04/13 - Royalty settlement 6,199,228 265
29/04/13 - Conversion of outstanding directors' 5,485,781 548
fees to equity
01/05/13 - To director in accordance with 1,000,000 45
employment contract
08/05/13 - Placement 100,000,000 8,000
Share issue costs including valuation of - (100)
derivatives
Balance at 30 June 2013 684,104,446 236,032
c. Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds
on winding up of the Group in proportion to the number of and amounts paid on
the shares held.
On a show of hands every holder of ordinary shares present at a meeting of the
Group, in person or by proxy, is entitled to one vote, and upon a poll each
share is entitled to one vote.
d. Options
Information relating to share options outstanding at the end of the financial
year is as follows:
Grant Date Date of Expiry Exercise Price Number of Options
24/06/2013 30/06/2015 $0.50 65,679,1341
16/05/2012 15/05/2015 $0.2216 12,500,000
15/03/2013 15/05/2016 $0.06 15,000,000
16/05/2012 16/07/2016 $0.20 8,000,000
18/11/2011 23/08/2016 $0.368 13,950,893
06/12/2012 06/12/2017 $0.057 6,000,000
18/12/2012 18/12/2017 $0.05382 5,000,000
126,130,027
1 Listed Options
Note 21: Segment Reporting
a. Description of segments
Management has determined that the operating segments are based on the reports
reviewed by the Board of Directors that are used to make strategic decisions.
The Board of Directors are as disclosed in the Directors' Report.
The Board of Directors considers the business from both a commodity type and
geographical perspective and has identified three reportable segments.
b. Segment information provided to the Board of Directors
The segment information provided to the Board of Directors for the reportable
segments is as follows:
2014 Coal SA Coal Corporate Consolidated
Botswana Costs
$'000 $'000 $'000 $'000
Total segment revenue and 70,204 - 473 70,677
other income
Segment gross profit 2,979 - - 2,979
Adjusted EBITDA 3,822 - (3,812) 9,904
Depreciation 7,371 - - 7,372
Impairment 2,208 - - 2,208
Total segment assets at 30 145,484 1,147 3,432 150,063
June 2014
Total segment liabilities 105,581 - 41,292 146,873
at 30 June 2014
2013 Coal SA Coal Corporate Consolidated
Botswana Costs
$'000 $'000 $'000 $'000
Total segment revenue and 65,010 - 1,350 66,360
other income
Segment gross profit 2,859 - - 2,859
Adjusted EBITDA 2,320 - (5,844) (3,524)
Depreciation 4,406 - - 4,406
Impairment 28,126 - - 28,126
Total segment assets at 30 163,828 1,200 4,775 169,803
June 2013
Total segment liabilities 106,448 - 36,627 143,075
at 30 June 2013
Accounting Policies
Segment revenues and expenses are those directly attributable to the segments
and include any joint revenue and expenses where a reasonable basis of
allocation exists. Segment assets include all assets used by a segment and
consist principally of cash, receivables, plant and equipment and exploration
and development expenditure. While most such assets can be directly attributed
to individual segments, the carrying amount of certain assets used jointly by
two or more segments is allocated to the segments on a reasonable basis.
Segment liabilities consist principally of payables, employee benefits, accrued
expenses, provisions and borrowings. Segment assets and liabilities do not
include deferred income taxes.
Intersegment Transfers
Segment revenues, expenses and results include transfers between segments. The
prices charged on intersegment transactions are the same as those charged for
similar goods to parties outside of the economic entity at an arms' length.
These transfers are eliminated on consolidation.
Compliance Statement:
1. This report is based on the financial statements to which one of the
following applies:
The financial statements have The financial statements have
been audited. been supplied to review.
The financial statements are The financial statements have
X in the process of being not yet been audited or
audited or subject to review. reviewed.
2. The entity has a formally constituted audit committee.
____________________________
PETER LANDAU
Executive Director
Date: 31 August 2014