Keaton to raise funds as it eyes growth

[miningmx] — KEATON Energy is aiming to raise around R80m in the near future,
notwithstanding poor market conditions for coal miners, as it remains convinced
about its strategy to become a 5 million tonnes per year producer.

Current run-of-mine production stands at around 2.7Mtpa from two operations: the
Vanggatfontein mine in Mpumalanga province, and the recently acquired Vaalkrantz
anthracite colliery in KwaZulu-Natal.

According to Rowan Karstel, the newly appointed CEO of Keaton, the finance
earmarked would go towards the development of the number three pit at
Vanggatfontein, while the remainder would be used for Keaton’s previously
announced strategy of consolidating assets around Vaalkrantz.

Karstel said on Friday the market’s discounting of coal-producing juniors wasn’t in
any way a reflection on the profitability and health of the company.

Keaton’s share price languished in recent weeks, along those of other coal
producers, as a global oversupply and economic instability placed a damper on
thermal coal export prices.

Keaton has come off its annual high of R3.72 per share soon after it had posted
record annual results for the year to end-March. It closed at R2.70 on Thursday
before climbing more than 7.4% on Friday to R2.90 – albeit on thin volumes –
following an announcement that the change in contractor at its Vanggatfontein
colliery in June had yielded immediate results.

The company delivered a monthly record of 154,041 tonnes to Eskom.

“Everybody’s share price is suffering, but our product mix is giving us a unique
advantage,’ he said. “We’ll work our way through the cycle by sticking to our growth

He said the margins on its anthracite deliveries, used by ferro-alloy producers as a
substitute for coking coal, remained robust, while the supplies to Eskom provided
good annuity income.