Ann: New coal tenements to be acquired , page-15

Cheers taipan for clarifying that. I'm with you now :-)

However, to my understanding...

On the 27th March 2012, RES announced that they have acquired the surface land for the two additional properties, Swelpan and Kleinpan (highlighted on the image below in black/grey shading) at a cost of $4M. Cool! See link.

27 March - Property acquired and potential new coal tenements

At that point, the prospecting rights were still owned by Exxaro and "Ledjadja, Resource Generation’s BEE subsidiary, had granted a put option to Exxaro under which Exxaro can sell the prospecting rights over the four properties to Ledjadja." Again .. Cool!

The four tenements owned by Exxaro are highlighted in red dotted outline on the image.

So, now Exxaro have decided to exercise their put option subject to DMR approval and we're told .. "The consideration payable is not material to the company’s existing cash reserves"

IMO, because payment is not due until the DMR approves the transfer (approx mid 2013), it will have no bearing on existing cash reserves. By that stage we will have secured project finance and be well and truly underway with mine construction. I HOPE!

You're absolutely right in saying that RES should disclose the financial consideration involved, however is it possible that no figure has been discussed yet? I find that hard to believe.

If you look at slide 20 on the recent Investor Presentation Update, RES have set aside $64M for capital expenditure on "Other". Maybe they're allowing for this kind of expense. I'm not suggesting Exxaro will sting us for $64M by the way LOL.

taipan, I'm still wondering why you're making calculations based on (from my understanding) an arbitrary amount of $5m? Do you know something I don't? LOL

Not having a go mate, just wondering?

Another point I'd like to make is that the Waterberg contains approximately 75.5Bt of South Africa's remaining Coal resources. The tenements in question hold 974.5Mt Indicated (excluding 50% shale = 1.95Bt resource). This represents approximately 2.6% of the overall Waterberg resource. Given how close the Exxaro tenements are to Boikarabelo, perhaps Exxaro aren't too concerned about giving up the 4 tenements at a fair price???

One can only hope!