results ffor the year ended 31 march 2012 · capital to progress its projects. the company is s ......

FFRESULTS

FOR THE YEAR ENDEDFOR THE YEAR ENDED31 MARCH 2012

P l Mill M i DiPaul Miller, Managing DirectorJacques Rossouw, Finance Director

Wednesday, 30 May 2012

DisclaimerDisclaimer

All t t t i thi t ti th th hAll statements in this presentation, other than h

and mining potential are forward-looking state

expectations expressed in such forward-loo

assumptions, such statements should not in a

performance. Factors that could cause develop

include exploration results, technical analysis andc ude e p o a o esu s, ec ca a a ys s a d

capital to progress its projects. The company is s

and mining business and general economic and b

Results for the year ended 31 March 2012 2

hi t i l f t th t dd l ti ti itihistorical facts, that address exploration activities

ements. Although Keaton Energy believes the

oking statements are based on reasonable

any way be construed as guarantees of future

ments to differ materially from those expressed

d lack of availability to the company of necessaryd ac o a a ab y o e co pa y o ecessa y

subject to specific risks inherent in the exploration

business conditions.

Highlights for the yearHighlights for the year

» 2 7Mtpa production platform establis» 2.7Mtpa production platform establis

• 1.2Mt coal produced and sold

• revenue soars to R474m from Rrevenue soars to R474m from R

• 145% rise in HEPS to 25.2cps

• EPS up 783% to 90.9cpsp p

• 31% increase in NAV per share


shed across two operationsshed across two operations

R35mR35m

e to R4.45

Our marketsOur markets


Accelerating demand for t ll i l l metallurgical coal


Metallurgical coal prices Metallurgical coal prices

US$/US$/t


Source: Bloomberg, Edison Investment research

(US$/t) (US$/t)

Metallurgical anthracite pMetallurgical anthracite p

800

900R/t (12-month moving average across all size fract

600

700

300

400

500

100

200

300

0

Aug

-05

Oct

-05

Dec

-05

Feb-

06A

pr-0

6Ju

n-06

Aug

-06

Oct

-06

Dec

-06

Feb-

07A

pr-0

7Ju

n-07

Aug

-07

Oct

-07

Dec

-07

Feb-

08A

pr-0

8Ju

n-08


prices (R/t)prices (R/t)

tions and qualities)

Aug

-08

Oct

-08

Dec

-08

Feb-

09A

pr-0

9Ju

n-09

Aug

-09

Oct

-09

Dec

-09

Feb-

10A

pr-1

0Ju

n-10

Aug

-10

Oct

-10

Dec

-10

Feb-

11A

pr-1

1Ju

n-11

Aug

-11

Oct

-11

Dec

-11

Feb-

12

Spot thermal coal price p(US$/t)(US$/t)

US$/tUS$/t


Source: Bloomberg, Edison Investment Research

performance

South African thermal coSouth African thermal co


Source: GTIS, Macquarie Research, May 2012

oal exportsoal exports

Eskom coal consumption d tipower production


Source: Eskom, 1H12 annualised, RMB Morgan Stanley Re

and

search

Results reviewResults review


Group: production (tpa)Group: production (tpa)

1,200

1,400

600

800

1,000

'000

t

200

400

600

-2009 2010 2011 2012

Kli C lli V tf t i C lli 5 S VKlip Colliery Vanggatfontein Colliery - 5 Seam Va


700

800

900

400

500

600

'000

t

100

200

300

tf t i C lli E k ** V lk t A th it C lli *

0

100

2011 H1 2011 H2 2012 H1 2012 H2

anggatfontein Colliery - Eskom** Vaalkrantz Anthracite Colliery*

Group: revenue (Rm)Group: revenue (Rm)

500

400

450

500

300

350

400

200

250Rm

100

150

0

50

2008 2009 2010


Vaalkrantz - anthracite sales

Vanggatfontein - transport

Vanggatfontein - coal sales

Klip Colliery

2011 2012

Group: basic earnings peGroup: basic earnings pe

100

80

100

60

40cps

20

20

02008 2009 20

-20


er share (cps)er share (cps)

010 2011 2012

Group: headline earningsGroup: headline earnings

30

20

25

30

15

20

5

10

cps

-5

02008 2009 20

-15

-10


s per share (cps)s per share (cps)

010 2011 2012

LME transactionLME transaction


LME transaction re-visiteLME transaction re visite

» LME in financial distress» LME in financial distress• anthracite market collapse in 20

collapse post 2008 financial crisi ffi i t h fl t i• insufficient cash flow to service

• R45m in urgent funding from An» Keaton Energy proposed acquiring 7

business• ‘all-or-nothing’ deal on all loans,• R65m KEH advance to LME as

out Anglo (at a discount)» LME enters into offtake agreement w» Gunvor agrees to fund KEH’s acquis» Gunvor agrees to fund KEH s acquis» Refinancing concluded late 2010» Regulatory approval for equity acqui


eded

009, following ferrochrome market sesd bt d W t Aditdebt and open new West Adit

nglo Coal74%, preceded by refinancing the

, shares sought by Anglorescue funding: KEH agrees to take g g

with Gunvorsitionsition

sition late 2011

Operational reviewOperational review


Operational review: VangOperational review: Vang

» Approaching steady state» Significant investment made in pre-stripping

in Pit 1, now at steady state» Pit 2 partial steady state» Pit 2 partial steady state» Plant performance and availability continues

to improve• better contamination control from pit

i d bl ti d f t ti• improved blasting and fragmentation• better water system availability

er to

nne

Investing

tio/c

ash

cost

s pe

Free cashflow

Stri

p ra

t

Time


Time

ggatfonteinggatfontein

FY2012 FY2011 %

Key indicators

Waste m³ 7 293 945 3 202 098 +128%

ROM t 2 151 853 137 025 +1 470%

Strip ratio* 3.39 23.37 -85%

Saleable t 1 125 374 56 886 +1 878%

Reserves t 35 900 000 32 200 000 +11%Reserves t 35 900 000 32 200 000 11%

Capex Rm311 220

Employees and contractors

692 612+13%

Life of pit averageActual

Vanggatfontein: next stepVanggatfontein: next step

» Mine plan and plant optimisation in p» Mine plan and plant optimisation in p

• balanced wash yields

• steady 5 Seam productsteady 5 Seam product

• continuously improve plant avai

» Reach steady statey


psps

progressprogress

ilability

Operational review: VaalkOperational review: Vaalk

» 3½ months attributable to the group

» Better prices achieved

» Machine availability improved through refurbishment» Machine availability improved through refurbishment and new machines

» Electrical supply to the mine was problematic

» Investment in equipment continuesInvestment in equipment continues

50,000

60,000

20,000

30,000

40,000

Tonn

es

0

10,000


ROM Saleable Product

krantzkrantz

FY2012 FY2011 %

Key indicators

ROM t 559,725 280,858 +99%

Saleable t 351,331 180,739 +94%

Reserves t 2,535,672 3,096,869 -18%

Capex Rm 25,481,196 30,300,001 -16%Number of employees incl. contractors 723 687 +5%contractors 723 687 +5%

Vaalkrantz: next steps Vaalkrantz: next steps

» Prices are good and demand is high» Prices are good and demand is high

» Initiative under way to extend life of o


operation through additional resources

Project/prospect updateProject/prospect update

Project/Project/prospect Comment

Braakfontein » Most advanced project » Potential for 1Mtpa ROM underground export

thermal colliery near Newcastle» Reserve statement in preparation for AR

Koudelager » Life extension to Vaalkrantz» Mining right granted

Sterkfontein » 69Mt Samrec compliant resource declaredp» Concept study initiated

Mpati » Agreement to sell project on award and cession of mining right for R12m

Balgray » Mining right submittedBalgray » Mining right submitted


Group: capital expenditurGroup: capital expenditur

» Vanggatfontein: planned expenditure» Vanggatfontein: planned expenditureimprovements to plant

» Vaalkrantz: R30m in sustaining capi

• including acquisitions of key ma


rere

e to open Pit 3 and minore to open Pit 3 and minor

ital

achines

Financial reviewFinancial review


Financial review: incomeFinancial review: income

FY2012 FY2011FY2012 FY2011

Rm Rm

Revenue 474.4 35.2

Other income 25.5 0.4

Net operating costs(443.3) (53.6)

Results from operating activities 56.6 (18)Results from operating activities 56.6 (18)

Gain on business combination 114.4 -

Operating profit/(loss) 171 (18)

Net finance (cost)/income (13.4) 18.7

Net profit before tax 157.6 0.6

Tax (expense)/credit (8.3) 6.6

Net profit 149 7.2

Basic earnings per share (cents) 90.9 10.3

Headline earnings per share (cents) 25.2 10.3


statement statement

C tComments

Increase from ramp-up at Vanggatfontein and 3½ months of Vaalkrantz(R93 million)

Gain on refinancing LME loans

One year after re-capitalisation and turnaround of LME

Cash now fully invested and project finance drawn

Tax payable – interest earned on loans to LME

+783%

+145%

Financial review: balanceFinancial review: balance

31 Mar 2012 31 M

Rm

Property, plant and equipment 884.4 4

Intangible assets 423.9Intangible assets 423.9

Long-term financial assets - 1

Other non-current assets 22.6

Current assets 134.0

Cash 60.6

Total assets 1 525.5 7

Borrowings 248.8

Provision for environmental rehabilitation 112.9

Deferred tax liability 94.3

Current liabilities 229.0 1

Total liabilities 684.9 7

Shareholders equity 840.5 5

NAV per share (cents) 445


e sheete sheet

Mar 2011 Comments

Rm

479.5 Completion of Phase 2 Vanggatfontein business combination

65.1 Business combination65.1 Business combination

31.6 Loans to LME, now consolidated

12.9

67.3

27.0

783.4

Mainly Vanggatfontein project finance

46.0

- Business combination

55.8 Includes disputed amounts with DRA

783.4

581.6

339 Increase after dilution

Looking aheadLooking ahead

» Consolidate and extend production a» Consolidate and extend production a

» Initiate development of Braakfontein

» Optimise Vanggatfontein» Optimise Vanggatfontein

• potential expansion on remaind


at Vaalkrantzat Vaalkrantz

er of property

ConclusionConclusion

» An established coal producer with pr» An established coal producer with pr

» Focus now on growth off established

• organic growth on current operaorganic growth on current opera

• acquisitive growth necessary to


roduct diversityroduct diversity

d base

ationsations

o reach 5Mtpa

FFRESULTS

FOR THE YEAR ENDEDFOR THE YEAR ENDED31 MARCH 2012

P l Mill M i DiPaul Miller, Managing DirectorJacques Rossouw, Finance Director

Wednesday, 30 May 2012

results ffor the year ended 31 march 2012 · capital to progress its projects. the company is s ......

Documents