Forbes Coal to list on JSE

[miningmx.com] — TSX-listed Forbes Coal, the operator of two coal producing assets in Northern KwaZulu-Natal, would debut on the JSE on July 28.

Releasing an abridged pre-listing statement on Monday, Forbes Coal said the secondary listing would enable it to pursue acquisition opportunities on the continent, while also providing it an additional source from which capital could be obtained. However, the listing process would not entail any capital raising.

Forbes Coal owns and operates the Magdalena and Aviemore mines north of Dundee, as well as two processing plants.

The Magdalena mine produces bituminous coal, boasting output of 556,094 tonnes of saleable coal for the 2011 financial year in both opencast and underground operations. The group said production was expected to increase to 850,000 tonnes in 2012, possible due to the introduction of a new continuous miner at the underground operations.

Magdalena has a life of mine of approximately 25 years for its underground operations, with opencast operations ending in 2013. Measured and indicated resources were 51.7 million tonnes (mt), with proven and probable reserves of 25.4 mt.

The Aviemore mine commenced producing anthracite coal in June 2010, having been closed a year earlier due to the economic downturn. Saleable production of 91,954 tonnes was achieved during the 2011 financial year, with output to increase to 170,000 t for 2012 and 290,000 t for 2013.

Measured and indicated resources were 35.7 mt tonnes, and proven and probable reserves were 9.6 mt.

Forbes has an existing export allocation of 197,000 t per year through its black empowerment partner Zinoju Coal; a Quattro-scheme member, in addition to an agreement with Grindrod for capacity through the company’s Navitrade Terminal in Richards Bay for 600,000 t in 2011, 720,000 t in 2012 and 960,000 t in 2013.

Forbes acquired the assets in April 2010 from Slater Coal – owned by the Slater family – for R600m payable over two years. It would acquire an outstanding 23.25% in March 2012. It listed on the TSX following a reverse takeover of Nyah Resources.

“Forbes Coal will benefit from the increased demand in exports as it has successfully created export capacity at the Richards Bay port through Grindrod’s Navitrade Terminal in addition to its RBCT allocation,’ the group said in its pre-listing statement.

“It also benefits from direct access to the Transnet Freight Rail line to be able to transport coal to the Richard Bay port.

“The company has already successfully negotiated off-take agreements with significant global energy companies to take up the increase in export coal.’