For personal use only
For personal use only Pictured: Kangala mine Strong start to 2015, set to double production ASX: UNV March 2015 For personal use only Disclaimer Not an Offer for Securities This document has been created by Universal Coal plc (the Company) solely for use at the investor presentations to be made by the Company and does not constitute nor does it contain an offer or invitation to buy or subscribe for securities in the Company or an inducement to make an offer or invitation with respect to those securities. By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations. Relevant Law & Relevant Persons The distribution of this document in jurisdictions outside of Australia may be restricted by law, and persons into whose possession this document comes should inform themselves about, and observe, all such restrictions. Information is a synopsis only This document only contains a synopsis of information on the Company and accordingly no reliance may be placed for any purpose whatsoever on the sufficiency or completeness of such information and to do so could potentially expose you to a significant risk of losing all of the property invested by you or incurred by you of additional liability. The information presented in this document is subject to change without notice. Currency references Financial amounts in this document are expressed in Australian dollars, South African Rand or A$. USD or US$ shall mean the lawful currency of the United States of America. Forward looking Statements This document contains ‘forward looking statements’ which involve subjective judgment and analysis and are subject to significant uncertainties, risks, and contingencies, many of which are outside the control of, and are unknown to the Company. In particular, these forward looking statements are made only as of the date of this document, they assume the success of the Company’s business strategies, and are subject to business, competitive and economic uncertainties and risks. No representation, warranty or assurance (express or implied) is given or made in relation to any forward looking statement by any person (including the Company). In particular, no representation, warranty or assurance (express or implied) is given in relation to any underlying assumption or that any forward looking statement will be achieved. Actual future events may vary materially from the forward looking statements and the assumptions on which the forward looking statements are based. Given these uncertainties, recipients are cautioned to not place undue reliance on such forward looking statements. Subject to any continuing obligations under applicable law or any relevant listing rules of the ASX, the Company disclaims any obligation or undertaking to disseminate any updates or revisions to any forward looking statements in this document to reflect any change in expectations in relation to any forward looking statements or any change in events, conditions or circumstances on which any such statement is based. Nothing in this document shall under any circumstances create an implication that there has been no change in the affairs of the Company since the date of this Presentation. Disclaimer Although reasonable care has been taken to ensure that the facts stated in this document are accurate and that the opinions expressed are fair and reasonable, no representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information and opinions contained in this document and no reliance should be placed on such information or opinions. None of the Company, or Pursuit Capital Pty Ltd (Pursuit)or any of their respective members, directors, officers or employees nor any other person accepts any liability whatsoever for any loss, however arising, from any use of such information or opinions (save in respect of fraud). No reliance should be placed on the information and no representation or warranty (express or implied) is made by the Company or Pursuit, or any of their respective directors or employees or any other person, and save in respect of fraud, no liability whatsoever is accepted by such person in relation thereto. Competent Person Statement The information in this report that relates to Exploration Results, Minerals Resources or Ore Reserves relating to the Kangala, Roodekop, Brakfontein, Berenice-Soutpansberg and Somerville-Tuli Projects is based on information reviewed and compiled by Mr Jaco Malan, who is a registered natural scientist and a member of the South African Council for Natural Scientific Professions. Mr Malan is employed by Universal Coal plc and has sufficient experience which is relevant to the style of mineralisation and the type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 edition of the Australasian Code for Reporting of Exploration Results, Coal Resources and Ore Reserves. Mr Malan consents to the inclusion in this report of this information in the form and context in which it appears. Reporting on Exploration Results The update have been compiled in accordance with the JORC Code, the recommendations and guidelines set out in the revised 2007 South African Code for The Reporting of Exploration Results, Mineral Resources and Mineral Reserves (SAMREC Code) and the rules and guidelines relating to the independent expert’s reports set by ASIC and ASX. www.universalcoal.com 2 Company overview For personal use only South South African focusedcoal coal miner miner shaping upbecome as the next mid-tier producer producer African-focussed aiming to a mid-tier Achievements in 2014: o Brought 2.4 mtpa Kangala Mine into production – on time, in budget and ASX information ASX Listed (UNV) Ord shares on issue: 434 million Market cap: A$ 60 million (24/02/2015) Unrestricted cash: A$ 2.5 million now cash flow positive o Acquired next operating asset, NCC, commenced development of total ~2.8mtpa NCC Roodekop operation – phase one underway Experienced Board and management team with proven track record (31 Dec 2014) 12-month performance Share register Retail Investors 20.33% IchorCoal 29.99% Management 5.28% Other Top 20 Shareholders 19.07% AMED 25.33% www.universalcoal.com 3 For personal use only Emerging coal producer with substantial resource base Market cap ($ million) 0 50 100 150 Total coal resources (billion tonnes) 200 250 0 Atrum Resource Generation Tigers Realm Whitehaven Cockatoo Coal New Hope Corporation Universal Coal Guildford Coal Resource Generation Universal Coal Cokal Cockatoo Coal Prairie Mining Atrum Guildford Coal Prairie Mining Stanmore Coal Tigers Realm Emerging ASX-listed coal producer 1 2 3 4 5 6 7 Nearing 2 billion tonnes in resources Source – Company filings, Thomson Reuters. Note: Market capitalisation based on undiluted shares on issue and closing prices as at 24 February 2015. www.universalcoal.com 4 Overview of assets For personal use only Resources 1,2 Project Reserves2 Measured (Mt) Indicated (Mt) Inferred (Mt) Total (Mt) Proven (Mt) Kangala (domestic) 93.1 19.4 33.6 146.1 22.3 NCC Roodekop (export) 114.2 24.7 - 138.9 14.1 Brakfontein (export) 31.7 39.4 4.7 75.8 9.6 Subtotal 239.0 83.4 38.3 360.8 46.0 424.9 801.0 124.3 1,350.2 - - - 274.2 274.2 - Subtotal 424.9 801.0 398.5 1,624.4 - Total 663.9 884.4 436.8 1,985.2 46.0 Thermal Coal (Witbank) Coking Coal (Limpopo) Berenice-Cygnus Somerville Notes 1 …. large resource base – self drilled 2 3 4 www.universalcoal.com The Resource/Reserve estimates for the Kangala, Berenice-Cygnus and Somerville projects were prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported The Resource/Reserve estimates for the Roodekop and Brakfontein projects were prepared and disclosed under the JORC Code 2012 The Resource/Reserve estimate for the NCC project is a SAMREC compliant estimate and a “qualifying foreign estimate” for the purpose of ASX Listing Rules. Mineral resources are stated inclusive of mineral reserves 5 Kangala Mine For personal use only …. delivering to forecasts, cash flow positive First 9 1,084,403 sales tonnes months performance Generated gross operating cash of A$10.2m 2.4 mtpa run of mine (ROM) Operation 4.25 mtpa plant capacity Domestic : o 1.7Mtpa to 2Mtpa Eskom sales Products o 9 year off-take renewable for 9 years o Not linked to export price indices Export - 100ktpa RB1 sales via RBCT Quattro 22.3mt proven reserve Resource 146.1mt JORC resource base and reserve * Resources are stated inclusive of reserves Low Stripping Ratio of ~1.6 : 1 (LOM) www.universalcoal.com 6 For personal use only Kangala Mine …. impressive start to 2015 Satisfaction of completion tests December 2014 Mark official transition to steady state operations Production and sales targets January 2015 achieved Record sales result February 2015 171,000 tonnes 12,000 tonnes earmarked for export Processing of 2 millionth tonne Milestones Achieved in less than 12 months since maiden production commenced www.universalcoal.com 7 New Clydesdale Colliery For personal use only …second operation, long life, export focussed Ownership Roodekop owned from inception Acquired NCC from Exxaro, 2014 (subject to Sec 11) NCC Three DMS Processing Circuits Existing Rail siding with load out facilities Infrastructure Existing underground mining infrastructure Resources & Reserves (Combined) Proven Reserve 14.1Mt Resource 138.9Mt • Resources are stated inclusive of reserves Sufficient Resources to sustain +20 year life of mine To be developed in two phases Phase 1 – 2Mtpa ROM open pit Bankable feasibility study in progress; o Multi-product: • Power generation coal (Eskom) Development • low phos met coal o A$40m Capex (incl NCC acquisition) – 50:50 debt:equity o A$20/t ROM Opex o Forecasted EBITDA of A$13m p/a average o First coal H2 2015 Phase 2 – Ramp up to 2.8Mtpa - underground • 6000kcal NAR export thermal coal www.universalcoal.com 8 For personal use only Value added growth via diversified project pipeline Universal Coal pathway to becoming a mid-tier producer Production set to double within 12 months First mine, Kangala colliery producing 2.4 Mtpa ROM, capacity 4.25 Mtpa Second mine NCC Roodekop in development Second operation, NCC Roodekop, nearing first production, targeting 2mtpa Phase 1, with the second phase 2.8 Mtpa ROM to follow Additional value add growth possible either with Brakfontein or other opportunities Options over massive coking coal projects Exploration Somerville Prefeasibility Study Feasibility Study Berenice Cygnus Brakfontein www.universalcoal.com Approvals Construction NCC Roodekop Production Kangala 9 For personal use only Project pipeline 75.8 Mt thermal coal resource base, 9.6Mt proven reserve 25km east of Kangala Mine Brakfontein Mining Right and Environmental Authorization granted Water License due by 2H2015 Planned 1.2Mtpa ROM operation Development to commence 2016 High volatile, high swell SSCC & thermal coal project 1.35Bt shallow resource - 700Mt open pit at shallow dips (<6°) Berenice Cygnus 20km from existing railway infrastructure and 55km west of Coal of Africa’s Makhado coking coal project DRA scoping study confirms viability for +10Mtpa, open cut operation, LOM in excess of 25 years Pre-feasibility to commence 2015 Counter-cyclical value-accretive acquisitions capable of Acquisition Targets sustaining large (+3Mtpa) long-life projects) in established coal fields www.universalcoal.com 10 Cost advantage For personal use only ...strategically located in low cost region Low strip ratios Very low Capex and Opex Better located in terms of infrastructure: o Witbank coal field - close to existing rail and road infrastructure, 50km from power stations, 500km from RBCT compared to o Waterberg coal field - requiring extensive rail infrastructure upgrades, 350km from target power stations and 1000km from RBCT Kangala Roodekop Other Countries Australia www.universalcoal.com 11 For personal use only Coal in South Africa Large and growing domestic market: o Eskom consumes 126mtpa - require additional 22mtpa from 2017-2018 o Two new coal-fired power plants under construction o Still, only 50% of households are electrified Flexible export market: o supplies both European and Asian (largely India) markets - not dependent on China Expanding export infrastructure: o Richard Bay Coal Terminal capacity 91mt, plan to expanding to 110mt o Access for juniors via Quattro scheme doubled to 8Mtpa from 2015 o Rail capacity increase - 81Mtpa by 2015,120Mtpa by 2022 o Additional port capacity to/at Maputo and Durban Depreciating Rand – export thermal prices in Rand terms have remained high and stable over last 5 years www.universalcoal.com 12 For personal use only Conclusion SET TO BECOME A MID TIER MULTI-MINE COAL PRODUCER From exploration to production in 3 years First mine delivering to forecast Next operation in development Targeting ~5 mtpa ROM production by 2015-2016 Attractive pipeline of growth projects South Africa – growing domestic coal consumption, expanding rail & port capacity and substantial cost advantage over Australia ‘….. a growth story that no junior in this market can match…’ Barry Fitzgerald, The Australian, 2 September 2014 www.universalcoal.com 13 Contact For personal use only Universal Coal Plc Financial & Corporate Relations Pty Limited Tony Weber Robert Williams Chief Executive Officer Account Director Office: +27 12 460 0805 Main: +61 2 9235 1666 Fax: +27 12 460 2417 Fax: +61 2 9235 1920 Cell: +27 82 900 4579 Mobile: 0468 999 369 Email: [email protected] Email: [email protected] Website: www.universalcoal.com Web site: www.fcr.com.au Jaco Malan Country Manager, Australia Cell: +61 419 408 244 Email: [email protected] Website: www.universalcoal.com www.universalcoal.com 14 For personal use only Appendices www.universalcoal.com Non-executive directors John Hopkins LLB For personal use only Chairman Qualified lawyer and professional company director. John has been on the board or chaired nearly 20 public listed companies since 1985 (both in Australia and Canada) and as such has been involved in the financing and development (and subsequent M&A activities) of many gold, base metal, energy (coal and oil and gas), mineral sands and other resource projects all over the world. Previously, John spent 12 years as a partner of what was then a leading Perth law firm, during which time he was involved in a range of corporate, business and resource transactions for major national and international companies. John then went on to establish his own law firm from which he retired in 1998, John has recently stepped down from chairing gold producer Adamus Resources Limited and in his role he has overseen its last 4 years in making the transition from explorer to producer and taking its market capitalisation to over $300m. John is also the Non-Executive Chairman of Australian Securities Exchange (“ASX”) listed Wolf Minerals Limited and is a Fellow of the Australian Institute of Company Directors. Nonkululeko Nyembezi-Heita MSc, MBA Nonkululeko Nyembezi-Heita is the Chief Executive Officer of Ichor Coal N.V., an international mineral resources company focusing on coal mining in South Africa. IchorCoal holds significant minority positions in a number of South African based coal mining companies. Ms Nyembezi-Heita was previously Chief Executive Officer of ArcelorMittal South Africa, the largest steel producer on the African continent and subsidiary of the ArcelorMittal Group, which in turn is the largest steel producer in the world. Prior to that, she served as the Chief Officer of Mergers & Acquisitions for the Vodacom Group and before that, Chief Executive Officer of Alliance Capital, then local subsidiary of a New York based global investment management company. Ms Nyembezi-Heita has served as an independent non-executive director on numerous boards in both the public and private sectors. She currently serves as non-executive chairman of the Johannesburg Stock Exchange and non-executive member of the board of Old Mutual plc. Andries Engelbrecht Andries Engelbrecht has more than 20 years of experience in the coal mining industry and most recently was the Chief Operating Officer of Riversdale Mining Limited, responsible for all Africa based projects and operations. Prior to that Andries held the role of General Manager at Riversdale Mining’s Zululand Anthracite Colliery. He has also held various Management positions within BHP Billiton’s Ingwe Coal Corporation. David Twist BSc Hons, PhD Founding member of Platmin and CEO until 2006, subsequently focused on new mineral exploration opportunities with Sephaku Holdings. Previously with Impala Platinum and involved in Bushveld Complex research at University of Pretoria; member of South African Council of Natural Scientific Professions, Geological Society of London, Society of Economic Geologists (US) Carlo Baravalle After 4 years experience in finance with an Italian fashion group, GFT, Carlo completed his studies with an MBA at INSEAD. He then spent several years in strategic consulting, working on assignment for many large French conglomerates between Paris and the USA. Carlo then started in the telecoms industry, firstly with BT, starting new ventures outside the UK, and then as a Director of the Corporate Finance Telecoms team at Warburg. He then returned to the industrial side of telecoms with a senior global position at Lucent Technologies. At this point in his career he started getting gradually invol ved with Private equity industry, first taking a senior assignment with a company owned by Apax Partners as MD International and Main Board Member at The Exchange FS, and later as Senior Vice-President for EMEA, Asia and LatAm for LCC, a telecoms engineering company initially invested by the Carlyle Group. Hendrik Bonsma Businessman with interests throughout South Africa and has been actively investing in the South African mining industry for over a decade. Henry has been involved in various successful chrome, platinum, and iron ore transactions and has been the promoter of several listings on the JSE Limited, AIM on the London Stock Exchange and ASX www.universalcoal.com Key management team Daryl Edwards CA (SA) Shammy Luvhengo BSc Geology Chief Executive Officer Chief Financial Officer Business Development Prior to joining Universal Coal, Tony was an executive director at Nkwe Platinum Limited, operations manager at the Potgietersrus Platinum Mine and at the Gamsberg Project. He is a mining engineer with 20 years’ experience in mining spanning project assessment, finance, development and operations. Tony’s coal experience includes working at the New Clydesdale Colliery and Greenside Colliery for Gold Fields Limited and a brief period at the Prosper Hanniel Colliery in Germany. He has significant skills and experience in coordinating project feasibility studies and hands-on operational experience in the coal extraction industry Chartered Accountant with over twelve years professional experience in finance and commerce. Prior to joining Universal Coal, Daryl held the CFO position with Asenjo Energy, a Botswana based coal exploration and development company which is a Joint Venture between Aquila Resources Limited, Sentula Mining Limited and Jonah Capital BVI. Daryl is responsible for all financial and commercial facets of the business and is an integral part of the management team responsible for returning shareholder value Investment banker and qualified geologist. Shammy started his career with Exxaro Resources Limited before moving into the investment world. Previous work experience includes Investec Bank and Nedbank Capital, where he was involved in structuring and implementing project finance and BEE deals within the resources industry. Prior to joining Universal Coal, he worked at Nkwe Platinum Limited as Head of Business Development and Investor Relations Kevin Donaldson BSc Mining Eng Minah Moabi MSc Environmental Science Jaco Malan MSc Exploration Geology Chief Development Engineer Chief Environmental Manager Chief Geologist Mining engineer with over 20 years experience in coal mining. Kevin started his career with the then Rand Mines Limited (“Rand Mines”) in operations where he reached the level of Mine Overseer. After Rand Mines he joined Anglo American Plc where he moved into the mine planning and technical side of mining and project development. Kevin will be involved in the study phases of the projects and will be responsible for the implementation of the Kangala project Qualified Environmental Scientist and member of the South African Council for Natural Scientific professions (SACNASP). Minah has 10 years’ experience in environmental management, water management and sustainable development. Prior to joining Universal Coal Minah worked for BHP Billiton (BECSA) as a project manager, managing environmental related projects. Minah is responsible for developing, implementing and managing social and environmental management systems, strategies and action plans that ensure corporate sustainable development Geologist with a Masters Degree in Exploration Geology. Jaco started his career with Iscor Limited before moving into independent consulting. He has over 20 years’ experience in target generation and exploration across a range of commodities including coal, platinum, heavy minerals, gold and industrial minerals. He played a major role in identifying and acquiring Universal Coal’s current portfolio of projects. Jaco is responsible for the day to day management of the company’s geological functions For personal use only Tony Weber MSc Mining Eng www.universalcoal.com For personal use only Group structure 100.0% Universal Coal and Energy Holdings South Africa (Pty) Ltd (“Universal Coal”) 70.5% UCD I (Pty) Ltd 29.5% 50.3% UCD III (Pty) Ltd 49.0% UCD VIII (Pty) Ltd 49.7% 26.0% UCD IV (Pty) Ltd 51.0% 74.0% 50.0%1 UCD II (Pty) Ltd 50.0% 50.0% UCD V (Pty) Ltd 50.0% Mountain Rush Trading 6 (Pty) Ltd Unity Rocks Mining (Pty) Ltd Ndalamo Resources (Pty) Ltd Ndalamo Resources (Pty) Ltd Bono Lithihi Investment Group (Pty) Ltd Solar Spectrum Trading 365 (Pty) Ltd Kangala Brakfontein NCC Roodekop Bernice & Somerville Cygnus Legend Mining company: UCD – Universal Coal Development Thermal coal project Empowerment partner Coking coal project Universal Coal is an Australian Securities Exchange listed company www.universalcoal.com Note 1. Option to acquire up to 74% shareholding
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