investor visit to vanggatfontein complex
Post on 14-Feb-2022
1 Views
Preview:
TRANSCRIPT
LAYING THE FOUNDATION TO GROW SUSTAINABLY
INVESTOR VISIT TO VANGGATFONTEIN COMPLEX
06 March 2020
2
DISCLAIMER
This presentation contains forward-looking statements, including but not limited to, statements with respect to Wescoal Holding Limited’s plans and operating performance, the estimation of coal reserves and resources, the timing and amounts of estimated future production, costs of future production, future capital expenditure, and the success of mining activities. While based on management’s bes t estimates and assumptions, forward-looking statements are subject to risks and uncertainties that may cause actual results to be materially different from those expressed or implied by these forward-looking statements, including but not limited to: risks related to the successful integration of acquisitions, risk related to operations, risks related to general economic conditions and credit availability, actual results of current mining activities, unanticipated expenses, changes in project parameters as plans continue to be refined, fluctuations in coal prices, increases in market prices of mining consumables, possible variations in grade rates, failure of plant, equipment or processes to operate as anticipated, accidents, labour disputes, title disputes, claims and limitations on insurance coverage and other risks of the mining industry; delays in the completion of development or construction activities changes in national and local government regulation of mining operations, tax rules and regulations, and political and economic developments in the country. Although Wescoal Holdings Limited has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, no undue reliance should be placed on forward-looking statements. Wescoal Holdings Limited undertakes no obligation to update or reverse forward-looking statements, whether as a result of new information or future developments. The information in this presentation has not been reviewed or reported on by Wescoal Holdings Limited’s auditors.
This presentation is provided for informational purposes and does not constitute investment, legal, tax or other advice, nor is it to be relied upon in making investment decisions. Wescoal Holdings Limited will not be responsible for any liability for loss or damages of any kind which arises, directly or indirectly, and is caused by the use of the information provided. The information contained herein shall not be published, rewritten for broadcast or publication or redistributed in any medium without prior written consent from Wescoal Holdings Limited. The entire presentation is subject to copyright, with all Wescoal Holding Limited’s rights remaining strictly reserved
33
CONTENTS
1. Welcome (Group CEO)
2. Introduction (Group CEO)
3. Q3 Update (Group CFO)
4. Vanggatfontein (VGF) Complex (Mining CEO)
5. Conclusion (Group CEO)
4
GROUP STRUCTURE
Wescoal Holdings Limited
(Registration Number: 2005/006913/06)
(100%)
Wescoal Mining (Pty) Ltd
(Registration Number: 1999/005845/07)
(100%)
Proudafrique 147 (Pty) Ltd
(Registration Number: 2007/006676/07)
(100%)
Wescoal Exploration (Pty) Ltd
(Registration Number: 2008/007266/07)
(100%)
Wescoal Mineral Recoveries (Pty) Ltd
(Registration Number: 2007/012027/07)
(100%)
Wescoal Trading (Pty) Ltd
(Registration Number: 1996/011374/07)
(100%)
Blanford 006 (Pty) Ltd
(Registration Number: 1997/005386/07)
100%
Keaton Energy Holdings Limited
(Registration Number: 2006/011090/06)
(100%)
Neosho Trading 86 (Pty) Ltd
(Registration number: 2008/010470/07)
(100%)
Keaton Mining (Pty) Ltd
(Registration number: 2006/017998/07)
(100%)
Leeuw Braakfontein Colliery Proprietary Limited
(100%)
Labohlano Trading 46 (Pty) Ltd
(Registration number: 2008/013314/07)
(50%)
Arnot Holdco (Pty) Ltd
(Registration Number:
2019/019247/07)
(50%)
Arnot Opco (Pty) Ltd
(Registration Number:
2009/072282/07)
5
CORE VALUES
Safety
Delivery
Dynamic
Integrity
Accountability
Well-being
Stability
Sustainability Scalability
Safety,
health and
environment
MISSION
• To become a dynamic black-
owned and black-led coal
company which champions socio-
economic change and
transformation
• To lead the industry in
shareholder value-creation,
environmental sustainability and
stakeholder partnerships with
communities, employees and
shareholders
VISION
• To play a leading role in
delivering a reliable energy
source in a manner which adds
transformational value to society.
STRATEGY OVERVIEW
LAYING THE FOUNDATION TO GROW SUSTAINABLY
6
STRATEGY UPDATE
STABILITY
Sweat current operations, manage business well to maintain steady state
TARGET: 8Mt ROM FY20
Vanggatfontein turnaround
• Ramp up in progress and expected to reach over 300kt ROM in March
Elandspruit
• Consistently operating at 240kt ROM target from opencast
Khanyisa
• Operations back to full capacity following flooding and labour dispute in December 19 and January 20
Customer-centric; balance between Eskom, domestic and export coal
TARGET: 60% Eskom
SUSTAINABILITY
Optimal balance sheet and capital structure
TARGET: Sustained shareholder returns
Refinance facilities secured appropriate funding
CSI projects
• Delivering on all Social Labour Plan’s
Khanyisa Triangle 2
• Extension project required for the remaining life of mine
• First coal will be reached during April 2020
VG5
• Extension project to replace VG3 pit
• Primary development phase is expected to be completed by Q2 FY21
Regulatory and social license to operate
TARGET: Develop Group ESG framework
SCALABILITY
Fast-track development of organic growth projects
TARGET: Increase ROM to 10Mt FY21
Moabsvelden
• Box cut development and related infrastructure activities will commence in March 2020
• First coal and delivery to Eskom is scheduled for early calendar H2 2020
Arnot
• Mine to be restarted during calendar H2 2020 subject to conclusion of coal off-take agreements
Continue to evaluate available inorganic (M&A) growth opportunities
TARGET: Investment evaluation criteria
7
Q3 UPDATE
Production
Dec 2019
(Q3 FY’20)
(Kt)
Sep 2019
(Q2 FY’20)
(Kt)
Variance
(Kt)
Variance
(%)
Dec 2018
(Q3 FY’19)
(Kt)
Variance
(Kt)
Variance
(%)
Elandspruit 621 697 (76) -11% 681 (60) -9%
Khanyisa 219 370 (152) -41% 24 195 813%
Intibane
Vanggatfontein 621 529 92 17% 563 58 10%
Total 1 461 1 596 (135) -8% 1 268 193 13%
Sales (Kt)
Elandspruit 443 446 (3) -1% 586 (143) -24%
Khanyisa 324 323 1 0% 56 268 479%
Intibane 14 (14) -100%
Vanggatfontein 665 725 (60) -8% 426 239 56%
Mining 1 432 1 493 (62) -4% 1 082 350 32%
Trading 140 271 (131) -48% 204 (64) -31%
Total 1 572 1 764 (193) -11% 1 286 286 18%
Production
• Group mining production levels 13% higher than the comparable quarter ending December 2018
and 8% lower when compared to the immediately preceding quarter
• All operations were affected by unprecedented levels of rainfall during December 2019
• Lower than anticipated production at Khanyisa and Elandspruit was partially offset by better than
prior period production at Vanggatfontein (+17%)
Sales
• Group coal sales volumes increased 18% on comparable quarter of December 2018 and
11% lower when compared to the immediately preceding quarter
• This increase is a remarkable achievement given significantly reduced offtake by Eskom
during the December 2019 holiday period where Eskom was generally not taking coal
deliveries from 23rd December 2019 to 2nd January 2020
• Trading sales were in line with expectations although significantly below the comparable
quarter and previous quarter
VGF COMPLEX
9
LOCALITY MAP
10
VGF ORGANISATIONAL STRUCTURE
Mine Manager
Thakadu Saasa
Chief Safety Officer
Pieter Pretorius
Training Facilitator
SHE Administrator
Mine Engineer
Eshumael Chauke
Junior Engineer
Production Superintendent
Paul Simelane
Stockpile Supervisor
x 4
Geologist
Rendani Shiwalula
Junior Geologist
Environmental Intern
Njabulo Mxusile
Logistic Coordinator
De Wet Lombard
Diesel Attendant Weighbridge Clerks
General Worker
x 2
Junior Engineer
Phomolo Lekgae
11
0.2
0
1
2
Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20
LTI LTIFR (FYTD)
SAFETY
Safety record• Regrettable fatal incident (June 19)
• 4 Lost Time Injuries recorded
• FYTD Total Recordable Injury Frequency Rate (TRIFR) at 1.34
Health & Hygiene• No Compensable Occupational Illnesses FYTD
• Increased focus on chronic disease monitoring
• Continuous monitoring of personal exposure
Q1 FY20
1.3
1.0
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20
Total Recordable Injury Frequency Rate (TRIFR) Performance
TRIFR (Month) TRIFR (FYTD) TRIF Target
Q2 FY20 Q3 FY20
Lost Time Injury Frequency Rate (LTIFR) Performance
Safety interventions• Operations running weekly Visible Felt Leadership schedules
• Proximity detection system installed and training of operators in progress
• Focusing on hazard identification and reporting by operators
• Effective closeout of actions from Visible Felt Leadership visits and incident
investigations
12
Current priorities • Implementation and monitoring of production improvement initiatives• Pit de-coupling project finalisation• Completion of workshop and offices relocation from VG4• Initiating infrastructure project for VG5 transition to Wescoal• Synchronisation of VG3 depletion with the handover of VG5
Challenges • Low production volumes due to:- Regulatory shutdown (fatality) – 17 June 2019- Absenteeism- Contractor changeover- Production downtime (protest action)- Equipment availability challenges- Production sequence inefficiencies
Solutions
and initiatives
• Deployment of senior Wescoal personnel directly to operation• Appointment of independent productivity consulting group to assist with a back-to-basics turnaround strategy• New equipment onboarded• Implementing improved operational management control processes, training, operating and supervisory structures• Appointed mining sub-contractor with own fleet to focus on Pit de-coupling project
LoM extension
initiatives
• Common box cut execution – VG5• Continuous mine planning and optimisation e.g. VG6
Cost drivers • Absorption rate of fixed costs due to low production volumes• Inflationary increase of operational costs
KEY INDICATORS
KEY INDICATORS
17 615
permanent contractors
1.9Mt (YTD19: 2.5Mt)
coal mined
26.3Mt
reserves
1.2Mt (YTD19: 1.9Mt)
sales volume
9 years (FY19: 9 years)
LoM
LTIFR 0.2 (FY19: 0.24)
safety
13
ROM & SALES PERFORMANCE TREND
59 70
92
202
127
200
228 232
158
211
284
-
50
100
150
200
250
300
Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20
Kt
VGF ROM
Actual ROM kt
51 47
69
153
79
111
150
122 123 123
183
-
50
100
150
200
Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20
Kt
VGF Own Sales
Actual Own Sales Kt
14
CURRENT AND GEOLOGICAL RESOURCES
Moabsvelden Coal
Project
VG4
VG3
VG5
VG6
Mine out Area Vanggatfontein Colliery
Infrastructure i.e. CHPP, Mine
Offices, PCD, Discard Facility
VANGGATFONTEIN
EXTENSION
15
DEVELOPMENT TIMELINES
Schedule base
Sept 19Reserve(Mt) FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27
VG3 2.2Mt
VG4 11.1Mt
VG5 10.8Mt
Moabsvelden 29.0Mt
VG6 Underground 2.2Mt
Ave ROM
steady state
120ktpm
Ave ROM steady state 200ktpm
Ave ROM steady state 160ktpm
Ave ROM steady state 160ktpm
Ave ROM steady state 80ktpm
March 2021Depleted
Dec 2023Depleted
Nov 2026Depleted
Dec 2025Depleted
16
VG5 COMMON BOX CUT
▪ Extension project to replace VG3 pit during calendar H2 2020
▪ Well progressed to open a new box cut for an additional mining pit and coal face
▪ Joint development project, which will further enable extraction of some 450 000
tonnes boundary pillar area coal that would otherwise have been sterilized
▪ Primary development phase expected to be completed by Q2 FY21, at which
point the joint project will be dissolved and mining activities integrated with
existing Vanggatfontein operations, thus coinciding with the depletion of and
replacing production from VG3 pit
▪ Wescoal 4 Upper coal stockpiled in February was 16 700 tons and 4 Lower coal
supplied to Universal was 21 288 tons
VG5 PRODUTION
Dump m3
Topsoil m3 977 665
5 seam Waste m3
4 seam Waste m3 22 861 484
2 seam Waste m3 9 604 124
Total Waste m3 33 443 274
4 seam ROM t 5 419 745
CV MJ/Kg 21.0
2 seam ROM t 5 668 211
CV MJ/Kg 19.8
VG5 ROM Tonnes t 11 087 956
VG5 Strip Ratio x 3.0
Wescoal
Neighboring
Miner
17
MOABSVELDEN PROJECT
CONTRACT MINER
AND CAPEX
▪ Selection of a contract miner concluded following an extensive selection process
o Appointment remains subject to conclusion and signature of a contract mining agreement - an advanced stage
▪ Box cut development and related infrastructure activities will commence in March 2020
▪ First coal and delivery to Eskom is scheduled for early calendar H2 2020 (previously H1 2020)
o Ramp up to full target production volume of 200 Kt per month ROM expected to be achieved over a period of 18 months
▪ CAPEX for the first phase of mine development, the box cut development and auxiliary infrastructure to start mining operations and produce a ROM product in early calendar
H2 2020 - R250 million to R290 million
▪ CAPEX for the second phase to reach steady state of 200Kt per month ROM from Moabsvelden in early calendar H2 2021, inclusive of a coal handling and processing plant,
expected to be similar to that of phase one
▪ Thus, at the conclusion of phases 1 and 2 in 18 months’ time, Moabsvelden will be able to supply 2.0 - 2.1 million tonnes of coal per annum to Eskom
BOX CUT DESIGN
AND COAL
DISTRIBUTION
DESCRIPTION UNITS VOLUMES
WASTE
Load and Haul softs to dump -
500m m3 7,981,586
Drill and Blast Overburden m3 4,045,172
Load and Haul 5/4 IB to dump -
1,500m m3 1,952,183
Drill and Blast 4L/2U IB m3 101,945
14,080,886
COALING
Drill and Blast 5# t 438,395
Drill and Blast 4UU# t 55,9
Drill and Blast 4U# t 470
Drill and Blast 4L# t 650
Drill and Blast 2U# t 380
Drill and Blast 2L# t 770
2,764,295
18
PCD
Mining
Area
Access
Ramp
Waste Dump
Area
Mine
access
Mine offices
& Hardpark
Box cut
Crushing &
Screening
Area
Mining
Area
MOABSVELDEN SITE PLAN
19
CONCLUSION
› Most recent performance showing marked improvement, with ROM
expected to reach over 300Kt in March
› Contractor resourced to achieve plan consistently
› Capital investment into de-coupling of pit almost complete
› New pit VG5 on track to be handed over seamlessly at the end of VG3
› Moabsvelden commencement on track with coal expected in calendar H2
2020
top related