24th January 2018, Johannesburg -- Wescoal, Holdings Limited, the junior coal miner, trader and supplier today issued a voluntary strategic update on the integration of Keaton Energy assets, operational and financial matters pertaining to the enlarged organisation and key changes to the management and Board.
Keaton Acquisition and Integration Update
Wescoal acquired certain Keaton assets mid-way through 2017 to further diversify the Group’s asset base, realise economies of scale and synergies, expand optionality in contracts and off-take negotiations, as well as strengthen the balance sheet and free cash generation.
The enlarged business now has coal resources well in excess of 300 million tonnes, four operating mines, three processing plants and significant interests in coal supply chain infrastructure. This translates into additional revenue certainty and diversification through production of a range of coal qualities, mining and washing/processing options, customer and sales strategies across domestic and export markets, as well as optionality in contracts and off-take negotiations.
The integration programme is at an advanced stage and progressing according to plan. Identified personnel redeployments and overhead reductions are complete. Immediate operational cost-savings and efficiencies identified during the acquisition due diligence have been implemented with the combined effect of savings in excess of R40m per annum.
Additionally, mining operations at Vanggatfontein, formerly Keaton’s flagship mine, are progressing well and integration into Wescoal is at an advanced stage and key mining and technical skills have been successfully retained.
Waheed Sulaiman, Wescoal's Chief Executive said: “We are pleased with the progress of the integration programme. After several improvement and efficiency projects were identified early on, these have been implemented in a measured fashion. For example, systems integration with the aim of common reporting and resource management across the Wescoal Group is well underway. These projects represent low risk value enhancement opportunities which support the Group’s philosophy around standardisation and scalability.”
Management
The transition of Thivha Tshithavhane into head of the Mining Division, as of 1 April 2017, is complete and is a resounding success. His predecessor, Dutch Botes, formally left the Company’s employ at the end of December 2017. Dutch was instrumental in growing the Wescoal business to where it is today and continues to assist in a consultant capacity on new projects.
The internal appointment of Izak van der Walt into the Group Chief Financial Officer role, during August 2017, is a further reflection of the quality of personnel embedded in the Group.
Staff acquired through the Keaton acquisition coupled with a forward-looking people resourcing model ensures that Wescoal continues to have the internal expertise and experience required for a profitable, sustainable business.
Board and governance
During November 2017, Wescoal announced the appointment of Cecil Maswanganyi and Eric Mzimela to the Wescoal Board. It is the intention of the Wescoal Board to further augment the Board skill set and independence in the coming months. These changes will ensure that the Company continues to be well positioned to take advantage of value enhancing opportunities in a sustainable manner. Wescoal continues to adopt best-practice governance principles at all levels of the organisation.
Wescoal leadership’s top strategic priorities remain to grow the business, to strive for safe production and solid and predictable operational and financial performances. Planning and executing projects in a conservative, risk-based manner is how Wescoal will continue to manage and realise value from its sustainable growth plans.
Production and performance update from the combined operations
The enhanced flexibility of the enlarged resource base and associated mine infrastructure has facilitated increased ROM production and product variations to service the market as and when required.
Total run of mine (“ROM”) production attributable to Wescoal has doubled to 4.8 million tonnes up until end December 2017. This is double the amount achieved during the prior comparable period. The Group is well on its way to achieve its announced 8 million tonnes ROM production target.
Production at Elandspruit was ramped up to take advantage of spot sale opportunities and the mine is on track to comfortably exceed its annual target of 2.5 million tonnes. During October 2017, a new mining contractor was introduced at Elandspruit. The transition was carefully planned and well executed – it was concluded safely and without impacting negatively on production rates.
ROM production from Vanggatfontein totalled 1.5 million tonnes during the second and third quarters of the financial year. This is equivalent to 3 million tonnes per annum ROM on an annualised basis. Recently secured surface rights will enable the multiple mini-pits at Vanggatfontein to be developed in an optimal, cost efficient manner.
Combined output from Intibane and Wescoal’s share of the Khanyisa complex is approximately 1.5 million tonnes on an annualised basis.
Sulaiman added; “The combined Group is now better positioned to meet increased demand, both from Eskom as well as other domestic and export customers, which have grown noticeably as a contributor segment. This also reduces our concentration and dependency risk to a greater extent.”
Growth options
The Moabsvelden resource, which is adjacent to Vanggatfontein, represents a significant organic growth option for the Group. Study work on the Moabsvelden project remains on track to be completed in the coming weeks. Preliminary results confirm that Moabsvelden represents a significant value enhancing opportunity.
“We expect to produce between 1.5 million and 2 million tonnes per annum of additional ROM from the Moabsvelden project. This will result in us comfortably exceeding our 8 million tonnes per annum overall production objective,” concluded Sulaiman.
24th January 2018, Johannesburg -- Wescoal, Holdings Limited, the junior coal miner, trader and supplier today issued a voluntary strategic update on the integration of Keaton Energy assets, operational and financial matters pertaining to the enlarged organisation and key changes to the management and Board.
Keaton Acquisition and Integration Update
Wescoal acquired certain Keaton assets mid-way through 2017 to further diversify the Group’s asset base, realise economies of scale and synergies, expand optionality in contracts and off-take negotiations, as well as strengthen the balance sheet and free cash generation.
The enlarged business now has coal resources well in excess of 300 million tonnes, four operating mines, three processing plants and significant interests in coal supply chain infrastructure. This translates into additional revenue certainty and diversification through production of a range of coal qualities, mining and washing/processing options, customer and sales strategies across domestic and export markets, as well as optionality in contracts and off-take negotiations.
The integration programme is at an advanced stage and progressing according to plan. Identified personnel redeployments and overhead reductions are complete. Immediate operational cost-savings and efficiencies identified during the acquisition due diligence have been implemented with the combined effect of savings in excess of R40m per annum.
Additionally, mining operations at Vanggatfontein, formerly Keaton’s flagship mine, are progressing well and integration into Wescoal is at an advanced stage and key mining and technical skills have been successfully retained.
Waheed Sulaiman, Wescoal's Chief Executive said: “We are pleased with the progress of the integration programme. After several improvement and efficiency projects were identified early on, these have been implemented in a measured fashion. For example, systems integration with the aim of common reporting and resource management across the Wescoal Group is well underway. These projects represent low risk value enhancement opportunities which support the Group’s philosophy around standardisation and scalability.”
Management
The transition of Thivha Tshithavhane into head of the Mining Division, as of 1 April 2017, is complete and is a resounding success. His predecessor, Dutch Botes, formally left the Company’s employ at the end of December 2017. Dutch was instrumental in growing the Wescoal business to where it is today and continues to assist in a consultant capacity on new projects.
The internal appointment of Izak van der Walt into the Group Chief Financial Officer role, during August 2017, is a further reflection of the quality of personnel embedded in the Group.
Staff acquired through the Keaton acquisition coupled with a forward-looking people resourcing model ensures that Wescoal continues to have the internal expertise and experience required for a profitable, sustainable business.
Board and governance
During November 2017, Wescoal announced the appointment of Cecil Maswanganyi and Eric Mzimela to the Wescoal Board. It is the intention of the Wescoal Board to further augment the Board skill set and independence in the coming months. These changes will ensure that the Company continues to be well positioned to take advantage of value enhancing opportunities in a sustainable manner. Wescoal continues to adopt best-practice governance principles at all levels of the organisation.
Wescoal leadership’s top strategic priorities remain to grow the business, to strive for safe production and solid and predictable operational and financial performances. Planning and executing projects in a conservative, risk-based manner is how Wescoal will continue to manage and realise value from its sustainable growth plans.
Production and performance update from the combined operations
The enhanced flexibility of the enlarged resource base and associated mine infrastructure has facilitated increased ROM production and product variations to service the market as and when required.
Total run of mine (“ROM”) production attributable to Wescoal has doubled to 4.8 million tonnes up until end December 2017. This is double the amount achieved during the prior comparable period. The Group is well on its way to achieve its announced 8 million tonnes ROM production target.
Production at Elandspruit was ramped up to take advantage of spot sale opportunities and the mine is on track to comfortably exceed its annual target of 2.5 million tonnes. During October 2017, a new mining contractor was introduced at Elandspruit. The transition was carefully planned and well executed – it was concluded safely and without impacting negatively on production rates.
ROM production from Vanggatfontein totalled 1.5 million tonnes during the second and third quarters of the financial year. This is equivalent to 3 million tonnes per annum ROM on an annualised basis. Recently secured surface rights will enable the multiple mini-pits at Vanggatfontein to be developed in an optimal, cost efficient manner.
Combined output from Intibane and Wescoal’s share of the Khanyisa complex is approximately 1.5 million tonnes on an annualised basis.
Sulaiman added; “The combined Group is now better positioned to meet increased demand, both from Eskom as well as other domestic and export customers, which have grown noticeably as a contributor segment. This also reduces our concentration and dependency risk to a greater extent.”
Growth options
The Moabsvelden resource, which is adjacent to Vanggatfontein, represents a significant organic growth option for the Group. Study work on the Moabsvelden project remains on track to be completed in the coming weeks. Preliminary results confirm that Moabsvelden represents a significant value enhancing opportunity.
“We expect to produce between 1.5 million and 2 million tonnes per annum of additional ROM from the Moabsvelden project. This will result in us comfortably exceeding our 8 million tonnes per annum overall production objective,” concluded Sulaiman.
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