Bill - clearly those free cashflow figures on the website, and...

Bill - clearly those free cashflow figures on the website, and presentations are wrong, and need to be amended - at least until it is reflected in the quarterly, half yearly and annual financial reports. I have informed JB of this and those (incorrect) numbers will be amended on the website. Next corporate presentation PDF will also need to amend those $15m Ferr & $10m Vlak free cash/EDITDA numbers. At least we know that a significant proportion of Penumbra production is hedged on attractive margins of ZAR 567pt or US$69pt (ie. $34.4m p.a on 500ktpa) - (from 8/2/2012 ann):

As part of the debt funding with ABSA Capital, CCL has implemented a coal and foreign exchange hedging program to mitigate its exposure to a sustained fall in US$ coal prices or an appreciation of the ZAR:US$. CCL has hedged approx. 664,550 tonnes of coal over the life of the term loan facility at an average price of ZAR1,057/t. The hedging has been achieved at a 23% premium to the current spot price of approx. ZAR860/t and at a 54% and 53% premium to the average 3 and 5 year prices of ZAR685/t and ZAR692/t respectively. The average hedged coal price is at a premium to the highest coal price of ZAR983/t seen over the past 3 years.

Importantly the coal hedging implemented represents only 12% of the JORC compliant reserves at the Penumbra Coal Mine and provides significant upside to any significant rise in thermal coal prices, as well as providing operating flexibility. The hedge program does not have any impact on the existing offtake agreements in place. On the implementation of the coal and foreign exchange hedging program, CCL were advised by Noah’s Rule, a Risk Advisory firm, with offices in Australia and Europe, specialising in advising on the structuring and execution of project finance and the associated commodity hedging.

Commenting on the execution of the financing agreements and implementation of the coal hedging, Continental Coal Limited CEO, Mr Don Turvey said, “the finalisation of the loan financing agreements with ABSA Capital, a division of ABSA Bank Limited, one of South Africa’s largest financial service providers, under the current volatile capital markets is a key milestone in the growth of our company and a further sign of support for our coal mining strategy in South Africa.”

“To have already satisfied a number of the key conditions precedent and have agreed the draw down schedule of the US$35 million project loan facility is also a major step forward in the development of the Penumbra Coal Mine. In addition the establishment of the coal hedging program for the Penumbra Coal Mine, at average coal prices of ZAR1,057/t, provides us with extremely robust margins to the forecast total FOB costs of approx. ZAR490/t that were reported in
the recent SRK Competent Persons Report on the Penumbra Coal Mine,” Mr Turvey said.

http://www.conticoal.com/_content/documents/353.pdf