Hot off the BD website;Firestone Energy CEO says takeover...

Hot off the BD website;

Firestone Energy CEO says takeover ‘imminent’

by Monde Maoto, February 25 2013, 08:22

FIRESTONE Energy’s board of directors will make a decision next month on the R270m takeover bid tabled by Australian gold miner Range River Gold Mining, the local coal exploration company’s CEO, David Knox, said on Friday.

However, he declined to provide details regarding the company’s position on the deal.

"We are still waiting for the board to meet ... all I can say, however, is that this deal is imminent, with the board expected to advise shareholders between now and March 14," he said.

Range River, a subsidiary of Australian-based venture capital company Garrison Capital, offered Firestone shareholders one Range River share for every two Firestone shares held, a 25% premium to the company’s closing price at the time the deal was announced.

The relatively unknown firm has already acquired Ariona Company South Africa, which finalised a $39.64m investment agreement with Firestone late last year — funds that were earmarked for the development of Firestone’s coal projects.

This would see Range River getting a 70% interest in the company’s Waterberg coal project, while Sekoko Resources would reduce its stake in the project to 30%.

Last year, the company advised its shareholders not to act until a formal bid had been made.

It has since commissioned advisory group Venmyn Deloitte to conduct an updated independent competent person’s report on its coal projects, which are close to diversified resources mining giant Exxaro’s Grootegeluk mine, in the Waterberg region of Limpopo.

Range River launched the deal as development in the Waterberg region gains momentum with the announcement by Resources Generation that it has started construction of its Boikarabelo mine.

According to the updated competent person’s report, Firestone’s projects hold 1.4-billion tons in situ in the measured, indicated and inferred categories, with an intrinsic value of R1.3bn. "We are very much confident that we will be able to mine in the Waterberg," Mr Knox said.

Firestone nonexecutive chairman Tim Tebeila who also serves as the CEO of Sekoko, said the latest findings affirmed that the company would be able to supply Eskom with 10-million tons of coal a year once the mine is operational.

This is significant in the context of the government’s stated intention to declare some of SA’s mineral wealth, specifically coal, as strategic resources to ensure sufficient supply for domestic needs.

Mr Tebeila said the company, after numerous postponements, was on track with its plans to start developing the mining operation by the second half of the year. First ore production is expected to commence in the last quarter of next year.

According to the company, the initial construction comprised site infrastructure, roadworks and water and power connections.

It has also concluded a rail haulage contract with Transnet, with a confirmed allocation to meet export and domestic sales requirements for stage one of operations and a port access contract that is sufficient for export requirements.