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Keaton Energy Holdings Limited announced operational results for its Vanggatfontein Project near Delmas for the six months ended 31 March 2011, ahead of the release of the company’s year-end financial results in late May 2011.
Key highlights for the six-month period include: 1.Excellent safety performance, no lost time injuries 2.Sales started in December 2010 with good customer product acceptance 3.Electricity supply in place to support commissioning of the No. 4 & No. 2 Seam plant in April 2011 4.Eskom contract extended 5.Project financing completed Keaton Energy Managing Director, Paul Miller, commented, ‘The Vanggatfontein Project is moving into top gear. We have the infrastructure and funding in place to meet our customer’s needs. Our product has been well received by the market, the extension to our Eskom contract reflects belief in our long-term business strategy. The next six months will cement the progress made as production ramps-up to full capacity.” Safety Safety performance at Vanggatfontein has been excellent, with 651 645 hours worked and no lost time injuries during the period. At the end of March 2011, there were 239 mining staff and contractors and 330 construction contractors on site. Operations Since mobilisation of the mining contractor in July 2010, 3.2 million m³ of waste have been removed and some 145 107 metric tonnes of 5-Seam run-of-mine (ROM) coal have been produced. The 5-Seam plant was handed over to the processing contractor at the beginning of December 2010 and sales started immediately. After a slow start in December 2010 some 48 397 metric tonnes of 5-Seam nuts, peas and duff have been sold. The product has performed well in testing, resulting in good customer acceptance. The No. 4-Seam coal has been exposed and coaling has begun to support the completion and commissioning of the No. 4& No. 2-Seam plant, on schedule, during April 2011. The 11kV Eskom overhead transmission line went live at the mine on 5April 2011, which was a critical milestone for the successful commissioning of the No. 4 & No. 2 Seam plant and will also mean that the use of a generator to power the No. 5 Seam plant can be discontinued. First deliveries of coal to Eskom are planned for the second half of May 2011. Eskom Contract Extended The final Eskom contract terms have changed from those announced on 20 July 2010. The quality specification has changed with a concomitant price adjustment, but importantly so has the contract period. Initially some 16.5 million metric tonnes were to be supplied over seven years; now, some 20.8 million metric tonnes will be supplied over 10 years. Eskom has requested slightly better quality coal which will mean that, while much the same ROM volume will be mined on a monthly basis, it will be washed to a higher specification with 175 000 metric tonnes of washed coal being delivered to Eskom every month. Vanggatfontein’s coal washing capability means that coal can be produced according to varying customer requirements. Production ramp-up will begin at 50 000 tonnes per month in May, rising to 175 000 tonnes per month four months later. Nedbank Capital Project Financing Completed The offer of the R255 million project financing from Nedbank Capital announced on 6 December 2010 has reached financial close in record time following an intensive due diligence of the Project and completion of the legal documentation. The first draw-down of R138.5 million took place on 01 April 2011. |
