re: Ann: Penumbra Mine Equipment Delivered fo... All I can add...

re: Ann: Penumbra Mine Equipment Delivered fo... All I can add re: the hedging is the following email exchange with Jason:

From: xxxx
Sent: Wednesday, 20 June 2012 6:36 PM
To: [email protected]
Subject: Attention j. Brewer re: penumbra hedging



Hi Jason ,
Just a short one. Could you please explain a little about the structuring of the penumbra hedging. Can the full amount of hedged coal be taken as soon as possible or must the hedging be taken over a longer period of time .

Regards

xxxx


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Reply:

xxxx,

The hedging has been put in place on a quarterly basis and accounts for approx. 665,000t at an average price of ZAR1057/t. Hedged volumes typically account for 20-25% of volume in any one period.



The hedging is a requirement of the ABSA Capital project finance tranche of funding for the Penumbra Mine development and have been established to mitigate a sustained fall in coal prices



The hedging contracts are financial contracts and will be settled accordingly on the quarterly due dates. The contracts can all be closed out at any time, however this will impact on the ability to draw down the debt funds. At this stage the Company will likely continue to settle the contracts on each quarterly date. With current ZAR prices over ZAR720/t the hedging does provide some clear benefit.



Many thanks





Jason