Company announcements

Quarterly Activities Report for the period to 30 September 2012

31 October 2012

The Board of Firestone Energy Limited (ASX/JSE: FSE) (“Firestone” or the “Company”) is pleased to provide shareholders with its Quarterly Activities Report for the 3 month period ended 30 September 2012.

During the quarter the Company issued a notice of General Meeting together with an explanatory memorandum to shareholders which outlined, inter alia, a suite of transactions which, if approved and implemented, would significantly improve Firestone’s financial position and greatly assist in positioning the Company to become a major producer of coal in Southern Africa through its participation in the development of the Waterberg Coal project with its joint venture partner, Sekoko Resources (Pty) Ltd.

Subsequent to the quarter end, on 5 October 2012 shareholders in a general meeting approved resolutions, the subject of the notice of meeting. The most salient and commercially important of these resolutions related to the acquisition of a 25.7% interest in Firestone by Ariona Company SA (and its associates) from Sekoko Resources Pty Ltd; and the approval to issue new convertible notes to Ariona in an amount up to $40.7 million. The result of the proposed issue of the new convertible notes to Ariona is that it provides Firestone with a greatly enhanced balance sheet and significant funding and much needed working capital enabling Firestone to continue to meet its obligations under the Waterberg Joint Venture, including funding the completion of the Bankable Feasibility Study (“BFS”) which is due for completion in late December 2012. In addition to funding the BFS and related activities, it is forecast that Firestone will have sufficient cash reserves through to project start-up which is estimated for Q3, 2013. The outcome of these resolutions is that Ariona will emerge as the Company’s major shareholder, on terms as set out in the explanatory memorandum.

As at the date of writing this quarterly report, the Company and Ariona are working through the completion process. As soon as completion has occurred, the market will be advised accordingly.

The Waterberg Coal Project: Technical Update

During the quarter, the Waterberg Joint Venture Partners continued the BFS process for the proposed development of an opencast mining operation, providing 10 million tonnes of coal (product) per annum to Eskom for an initial term of 30 years. The formal Bankable Feasibility Study is being undertaken by SRK consultants. During the period, various specialist study groups were appointed to incorporate environmental work, rail studies, infrastructure and hydrology studies into the BFS. Furthermore a drilling contractor has been appointed, and the Waterberg Joint Venture partners have commenced a program to delineate the faults on Smitspan, and to upgrade the resource status on Smitspan and Massenberg. The drilling to delineate the fault-line on Smitspan is expected to be completed by the end of Nov 2012.

Currently the Waterberg Joint Venture have two geologists on site, overseen by an experienced coal exploration consulting geologist. Pursuant to the MOU with Eskom Holdings, the technical team have regular update meetings with Eskom and are also working closely with Transnet Freight Rail towards an integrated rail plan for the Waterberg. The study team are also engaging with the Department of Water Affairs for the supply of water to the project on a timely basis.

Yours sincerely,
David Knox
Chief Executive Officer
www.firestoneenergy.com.au
Tel: Australia (+61 08 9287 4600)
South Africa (+27 11 706 3548)

About Sekoko Resources

Sekoko Resources (Pty) Ltd is a South African-based black-owned energy and minerals company developing the coal, magnetite iron ore and PGMs Projects in the Limpopo Province of South Africa. This includes a significant exploration program and development of the Waterberg Coal Joint Venture Project based on significant Coal Zone Resources.

About Firestone Energy

Firestone Energy Limited is an independent, Australian exploration and development company listed on the Australian Stock Exchange Ltd (ASX) and the Johannesburg Stock Exchange (JSE). Firestone Energy has entered into a Joint Venture with Sekoko Resources (Pty) Ltd through which Firestone Energy has acquired the right to 60% participation interests in the Waterberg Coal Project located in Lephalale area, Limpopo Province, South Africa.

The first stage of the project is to develop the Smitspan mine which has a substantial measured thermal coal resource and to develop the Vetleegte mine which is a substantial metallurgical coal deposit.

Firestone Energy is committed to becoming a profitable independent coal and energy producer at its projects in South Africa, thereby making a substantial contribution to the social and economic development of the Lephalale area and South Africa.

Corporate Details

ASX: FSE
JSE: FSE

Issued Capital: 3,114 million ordinary shares

Major Shareholders:
Sekoko Resources (Pty) Ltd
Linc Energy Ltd
BBY Nominees Pty Ltd
Bell Potter Nominees Ltd

Directors and Officers

Non Executive Directors:
Mr Tim Tebeila (Chairman)
David Perkins (Deputy Chairman)
Dr Pius Kasolo
Ben Mphahlele
Kobus Terblanche

Officers:
Mr David Knox CEO
Ms Amanda Matthee CFO
Mr Jerry Monzu Company Secretary

Contact:
Suite B9, 431 Roberts Road
Subiaco, Western Australia 6008
Tel: +61 (08) 9287 4600
Web: www.firestoneenergy.com.au

REGISTER FOR ALERTS

^ Jump to the top

© 2013 Firestone Energy