Company announcements

Quarterly Activities Report for the Period to 31 December 2012

31 January 2013

Firestone Energy Limited (ASX/JSE: FSE) (the “Company” or “ FSE”) is pleased to provide shareholders with its Quarterly Activities Report for the 3 month period ended 31 December 2012.

Technical Activities: the Waterberg Coal Project

During the quarter, the technical team of the Waterberg Joint Venture continued to progress the Bankable Feasibility Study for the proposed coal mine to supply 10 million tones of thermal coal to Eskom per annum.

Eskom and Sekoko Resources agreed to extend the completion date of the Bankable Feasibility Study to 31 March 2013. This extension allows additional time for the joint venture to complete additional drilling and technical components required to support the Bankable Feasibility Study.

Drilling to delineate the faults on Smitspan and Stage 1 drilling to upgrade the resource of Smitspan and Massenberg was completed during the quarter. Laboratory analysis of the results are expected during the first quarter of 2013.

The various specialist studies required for the completion of the Bankable Feasibility Study, namely environmental, rail, infrastructure, geo-technical and hydrology studies, commenced during the quarter, and are currently well underway. The environmental consultants have commenced with the Public Involvement Process required in order to amend the Existing Environmental Right Management Programme.

An extensive drilling programme on Massenberg has now commenced, in order to upgrade the resource status of the property. The Waterberg Joint Venture technical team continue to actively engage with all stakeholders including Eskom, Transnet Freight Rail, and all relevant Regulatory Authorities.

Corporate Activities

Transactions with Ariona Company SA (“Ariona”)

During the quarter, the Company held a General Meeting for the suite of transactions with Ariona. The shareholders of FSE approved the transactions between the Company and Ariona, and the parties have advanced toward closing the transactions designed to improve the financial position of the Company.

On 17 December 2012, the Company announced that it had revised the Investment Agreement to allow for changes to the proposed settlement terms with Ariona. As part of the changes to those terms, the Company received A$600,000 of working capital from Ariona which will form part of the total investment amount of A$39.645 million to be provided as per the Investment Agreement. The first stage of financial settlement is now scheduled to take place on 31 January 2013.

The Company has also retained access to the balance of the A$2.2 million working capital facility which was announced on 22 March 2012.

The funding provided into the Company has allowed the Company to focus on its core activities on completing the Bankable Feasibility Study for the Waterberg Coal Project, in conjunction with its joint venture partner, Sekoko Resources (Pty) Ltd.

Take-over Proposal

On 17 December 2012, Range River Gold Limited (RNG.AU)(“Range River”) announced to the ASX an unsolicited, conditional proposal to acquire all of the ordinary shares in FSE by way of an off-market takeover offer (“Range River Offer”)

After the quarter, on 30 January 2013, Range River announced the Bidders’ Statement for FSE.

The Board is unanimous in its view that FSE shareholders should take no action and not make any decision in relation to their shareholding in the Company until the Board has had the opportunity to consider the Bidders’ Statement provided by Range River. Following careful consideration of the Range River Offer, the Board will determine and advise FSE shareholders of its recommendation.

Quarterly Activities Report for the Period to 31 December 2012 and Appendix 5B

David Knox
Chief Executive Officer
Tel: Australia (+61 08 9287 4600)
South Africa (+27 11 706 3548)


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