Disclaimer SOUTH AFRICA S NEWEST COAL MINER

Transcription

1 SOUTH AFRICA S NEWEST COAL MINER Paul Miller Managing Director Nedsec Mid-Cap Conference 11 September Disclaimer All statements in this presentation, other than historical facts, that address exploration activities and mining potential are forward-looking statements. Although Keaton Energy believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements should not in any way be construed as guarantees of future performance. Factors that could cause developments to differ materially from those expressed include exploration results, technical analysis and lack of availability to the company of necessary capital to progress its projects. The company is subject to specific risks inherent in the exploration and mining business and general economic and business conditions. 2 1

2 The investment case Designed for SA Strong, established team Fully funded for production Great projects, prospects in the right locations Rapid exploration/development/production trajectory No better time for coal in SA and internationally 3 3 Designed for South Africa Post 2004 company Fully compliant from inception with new SA minerals legislation No legacy issues 4 2

3 Strong team Strong board Established management team Extensive network of consultants and contractors Geology Mining Metallurgical Power Environmental Social and Labour 5 Market conditions R400 million in treasury at time of listing Altx15 Resi20 Alsi Keaton Energy NSJME R100 million private placing at R10 per share at listing 142 million shares in issue Fully funded for production /04/21 08/05/05 08/05/19 08/06/02 08/06/16 08/06/30 08/07/14 08/07/28 08/08/11 08/08/

4 Projects Bela-Bela 29º Mokopane 30º PRETORIA Middleburg South Africa Belfast N1 N N14 KLIPFONTEIN WITBANK Duvha JOHANNESBURG N12 Kendal Hendrina Delmas DELMAS Matla Kriel STERKFONTEIN babane N3 Heidelburg Bethal M 0 30 km Secunda ERMELO Piet Retief Grootvlei Tutuka Harrismith 29º Standerton Volkrust 30º 7 Klipfontein Bela-Bela 29º Mokopane 30º Witbank coal PRETORIA field Small, near-surface deposit N14 < 0.5Mt N Mining N1 permit received Sept 08 JOHANNESBURG Production has started local contractor open pit up to tpm for 10 months N3 Heidelburg First coal sale expected Oct 08 Objective: early cash flow to bridge the gap until Delmas Grootvlei comes on stream Delmas N12 KLIPFONTEIN Kendal Matla 0 30 km DELMAS Kriel Middleburg WITBANK Duvha STERKFONTEIN Secunda Hendrina South Africa Harrismith 29º Standerton Volkrust 30º Tutuka Bethal ERMELO Belfast babane M Piet Retief 8 4

5 Delmas Bela-Bela 29º Mokopane 30º Witbank coal PRETORIA field ha property N14 Mining Right application N made in N1 March hole JOHANNESBURG drilling programme completed in June 08 Feasibility study expected in Oct 08 Mining scheduled to begin early 2009 N3 Heidelburg 178.1Mt mineable in situ resource Open pit operation Grootvlei tpm ROM Delmas N12 KLIPFONTEIN Kendal Matla 0 30 km DELMAS Kriel Middleburg WITBANK Duvha STERKFONTEIN Secunda Hendrina South Africa Harrismith 29º Standerton Volkrust 30º Tutuka Bethal ERMELO Belfast babane M Piet Retief 9 Delmas, cont d 178M tonne mineable in situ resource 136.8Mt bituminous 41.6Mt lean coal 200 holes drilled in 8 months sets of sample data m

6 Delmas, cont d Avg 1.32m No5Seam Surface topography Avg 14.41m Avg 5.8m No.4 Seam Avg 8.5m Avg 5.4m No.2 Seam Not to scale 11 Paeleo floor Delmas, cont d 178M tonne mineable in situ resource 136.8Mt bituminous 41.6Mt lean coal 200 holes drilled in 8 months sets of sample data Multiple open pits can be developed on the property Suitable space exists for processing and waste facilities m

7 Sterkfontein Highveld coal field Bela-Bela 29º Mokopane 30º PRETORIA ha property 132 drill holes completed N N1 34Mt mineable JOHANNESBURG in situ resource 50% export coal N14 Delmas 33% domestic steam coal Concept study N3 complete Heidelburg Underground operation two shaft complexes Grootvlei N12 KLIPFONTEIN Kendal DELMAS Matla 0 30 km Kriel Middleburg WITBANK Duvha STERKFONTEIN Secunda Hendrina South Africa Harrismith 29º Standerton Volkrust 30º Tutuka Bethal ERMELO Belfast babane M Piet Retief Sterkfontein, cont d Ha property North North 1 North 2 South Mineable coal resources for No. 4 seam North 1: indicated: 3.4 Mt North 2: indicated: 14.1 Mt South: measured: 17.3 Mt 14 7

8 Cape Town Amalahle Ermelo coal field Six discrete properties totaling hectares Prospecting right granted in April 2008 R3.5 million exploration programme in progress 15 Mafla Klip River coal field Johannesburg30 E Piet Retief 31 E hectare property Prospecting right granted in July 2008 Targeting anthracite and/or coking coal Memel 28 S Newcastle N 11 N 11 Madadeni Dannhauser Glencoe Osizweni Hattingspruit Utrecht Dundee MAFLA Kingsley Vryheid AFRICA km Louwsb burg Melmoth 28 S Wasbank 0 30km LEGEND Ladysmith Greytown Melmoth 30 E 31 E Town National Roads Main Road

9 Big exploration pipeline Johannesburg Ellisras Waterberg prospect Delmas extension Sterkfontein extension Prospecting right applications submitted for more than ha Further applications to follow as opportunities arise Search continues for partnerships with holders of prospecting rights contiguous to existing projects Utrecht prospect 17 Rapid trajectory Founded by Rutendo Mining, Pouroulis family First exploration rights granted Raise seed capital Start exploration drilling List on the JSE Begin mining Delmas feasibility 18 months from first exploration to production at Klipfontein Delmas to follow similar trajectory 18 9

10 Action plan Project Project Actions Klipfontein Delmas Sterkfontein Amalahle Mafla <0.5M ton.* 4.5 ha 178M MTIS ha 34M MTIS ha 6 properties p ha ha Mining has started Mining right application submitted Concept study complete and mining right application in progress Prospecting right granted, drill rig on site Prospecting right granted Exploration Development Production 19 * Non SAMREC compliant 19 Right product, right time: domestic market Meanwhile, the price differential between export and local coal price has been increasing drastically. The export price in Feb 08 reached R 850/t and the SASC FOB price on 11 July 2008 was $ /t SA coal production growth has effectively been zero for the past three years - Eskom forced to use discard coal 20 Source: Eskom presentation to the Fossil Fuel Foundation Conference 20 July

11 Right product, right time: export market US$/t FOB Richards Bay To be updated 20 0 Jan-03 Apr-03 Jul-03 Oct-03 Jan-04 Apr-04 Jul-04 Oct-04 Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul South African spot coal index ( Barlow Jonker) Ave monthly achieved export price (DME: Minerals Economics) 21 Why buy our share? Designed for SA - fully compliant with new SA minerals legislation Strong, established team Fully funded to get into production R400m in treasury at listing no need to raise money in current difficult market conditions Great projects, prospects in the right locations good product spread active exploration pipeline Fast-moving - rapid exploration/development/production trajectory No better time for coal in SA and internationally robust domestic, export markets fundamentals remain sound

12 SOUTH AFRICA S NEWEST COAL MINER Paul Miller Managing Director Nedsec Mid-Cap Conference 11 September