sa to dispel nationalisation fears, page-14

"given the drop in coal price there is not margin from the present mine given it is expensive mines"

Agree that Ferreira will barely be turning a profit, probably even running at a loss at RB prices around $85. However, Vlakvarkfontein margins are unaffected by international prices - with steady Eskom prices allowing ~$10t margins, which is at least enough to cover overheads, management costs etc. Massive SA coal power build programs will ensure LT viability of domestic coal. Saving grace for now will be the SIOC-cdt $17m cash injection, ABSA funding for Penumbra, and Coal hedging program with ABSA Capital of approx. 664,550 tonnes at average of ZAR1,057/t ($126) against forecast total FOB costs of ZAR490/t ($58), as per SRK Competent Persons Report. Botswana phase one drilling program completed & paid for - results pending. Then there is also the possibility of the VanMag $10m for CCC (not CCL SA) - but I'm not going to hold my breath for that!

Regarding the Colombian coking coal acquisition - the idea is to get production up to 500ktpa, (250ktpa for CCC). Given that current margins are 75% and HCC is trading for around $220t - you're looking at margins of ~$80t = $20.6m p.a. free cash. Current mine life stated as 50 years, with ~100ktpa currently mined. So that's a 10yr mine life at 500ktpa. Plus there is exploration upside. As you will know from NAE - there is massive interest in Colombian coal from Asia, with the Chinese talking of funding large scale rail/infrastructure projects to unlock Colombia's natural resources. Plus the Panama canal expansion program will reduce bulk shipping rates from Colombia. And the Santos government is pro-business, pro-mining & pro-FDI. We have been told already that Conti aim to fund the Colombian acquisition via offtake funding - something Conti have already proven capable of via EDFT in SA.

Good luck with NAE - hope that proves to be a winner.