INTERIM RESULTS For the six months ended 30 September 2014 4 - PowerPoint PPT Presentation

INTERIM RESULTS For the six months ended 30 September 2014 4 November 2014

Agenda 1 Welcome 2 Financial performance 3 Group overview and growth path 4 Elandspruit project 5 Industry and prospects 6 Risks 7 Q&A 2

Financial performance 3

Salient financial features for the period 92,8% to R897,8m Revenue 73,2% to R84,3m Operational EBITDA 33,3% to 15,23cps HEPS Margin 1,8% (up 15,5%) improvement of 4

Salient operational features for the period Muhanga coal processing plant acquisition unconditional Successful integration of MacPhail and resultant contribution Acquired mining right for Intibane Phase 2 Initiatives to underpin sustainability and shareholder returns 5

Statement of comprehensive income Unaudited Unaudited Reviewed R’000 Change Sep 2014 Sep 2013 Mar 2014 Revenue 897 791 465 679 92.8% 1 147 444 Gross profit 120 356 53 867 123.4% 125 529 Gross profit margin 13.4% 11.6% 10,9% Operational EBITDA 84,292 48,659 73.3% 89 308 Finance costs (9 927) (3 175) 212,7% (9 615) Profit before taxation 39 957 95 009 (57.9%) 109 519 Taxation (11 892) (18 301) (35.0%) (22 839) Profit for the period 28 065 76 708 86 680 Net profit on the sale of assets (64) (58 651) (60 030) Headline earnings for the year 28 001 18 057 55.1% 26 650 6

Statement of comprehensive income (cont) Profit for the period (R’000) Revenue (R’000) 30 000 1 200 000 1 000 000 25 000 681 765 9 972 800 000 20 000 4 510 325 566 600 000 9 019 15 000 293 684 897 791 28 065 400 000 10 000 465 679 16 678 16 092 351 361 337 067 200 000 10 688 5 000 0 - 2012 2013 2014 2015 2012 2013 2014 2015 First half Second half First half Second half 7

Earnings Unaudited Unaudited Reviewed Cents per share Change Sep 2014 Sep 2013 Mar 2014 Basic earnings per ordinary share 15.2 37,2 (59.1%) 41,0 Fully diluted basic earnings per ordinary share 15.1 36,6 (58.9%) 40,2 Headline earnings per ordinary share 15.2 11,4 33.3 15,7 Fully diluted headline earnings per ordinary share 15.0 11,2 33.9 15,4 September 2013 and March 2014 HEPS excludes an after tax profit on sale of • Vlaklaagte prospecting right 8

Headline earnings per share HEPS for the interim period 18 15.2 16 14 11.4 12 10 6.9 7.3 8 6 4 2 0 2011 2012 2013 2014 9

Segmental contribution - Revenue 2013 2014 Revenue Revenue 33% 44% 56% 67% Mining Trading Mining Trading 10

Segmental contribution – operational EBITDA 2014 2013 Operational EBITDA Operational EBITDA 7% 23% 77% 93% Mining Trading Mining Trading 11

Mining division Revenue (R'000) Operational EBITDA Operating margin (%) (R'000) 296 787 300 000 14 12.8 80 000 12 290 000 10.6 67 828 10 280 000 60 000 48 874 8 270 000 40 000 261 693 6 260 000 4 20 000 250 000 2 240 000 - 0 2013 2014 2013 2014 2013 2014 Performance: • Excellent result • Produced 942,291 (2013: 895,185) tons of coal • Intibane incorporated for full period 12

Trading division Revenue (R'000) Operational EBITDA Profit from operations (R'000) (R'000) 700 000 601 004 14 168 25 000 15 000 600 000 20 141 500 000 20 000 400 000 10 000 15 000 300 000 203 986 10 000 200 000 5 000 2 894 3 649 5 000 100 000 - - - 2013 2014 2013 2014 2013 2014 Performance: • MacPhail acquisition proved strategic • Sold 625,949 tons of coal (2013: 217,831) • Division rebranded as Wescoal Trading • Synergy savings flowing through 13

Issues impacting earnings • Trading division • Volumes increased • Increased operating costs • Amortisation of intangibles • Mining division • Volumes increased • Intibane operational for full period • Reduced production at Khanyisa • Accelerated rehabilitation and amortisation 14

Issues impacting earnings • Group • Increased finance costs • Higher operational costs • Power and Fuel • Labour costs • Costs of early vesting of share options 15

Statement of financial position - assets Reviewed Unaudited Unaudited R’000 Sep 2014 Sep 2013 Mar 2014 Non-current assets 386 204 239 341 335 752 Property, plant and equipment 135 314 69 246 116 004 Investment property 709 709 709 Investments 9 714 3 199 6 664 Goodwill and intangible assets 107 882 51 209 111 722 Mineral assets 118 644 113 744 101 118 Other receivables 13 772 - - Deferred taxation 169 1 234 170 Current assets 397 450 300 114 368 391 Inventories and work in progress 65 662 47 175 60 839 Trade and other receivables 237 088 158 932 255 389 Cash and cash equivalents 94 700 94 007 52 163 Total assets 783 654 539 455 724 143 16

Statement of financial position - Equity & Liabilities Reviewed Unaudited Unaudited R’000 Sep 2014 Sep 2013 Mar 2014 Total shareholder’s funds 288 823 239 196 273 225 Non-current liabilities 97 337 33 552 96 471 Interest bearing loans 44 923 3 311 57 113 Rehabilitation provision 24 599 22 382 24 282 Deferred tax 27 815 7 859 15 076 Current liabilities 397 494 266 707 354 447 Trade and other payables 209 458 196 536 220 211 Bank overdraft 14 779 4 942 176 Taxation payable 13 232 - 10 268 Interest bearing loans 160 025 65 229 123 792 Total equities and liabilities 783 654 539 455 724 143 17

Cash generated from operating activities 80 000 74 588 70 000 63 086 60 000 50 000 R’000 40 000 25 948 30 000 20 000 10 000 2 960 0 2011 2012 2013 2014 18

Cash and cash equivalents 100 000 89 065 90 000 79 921 80 000 70 000 60 000 R’000 50 000 36 163 36 163 40 000 30 000 20 000 10 000 0 2011 2012 2013 2014 19

Group Overview and Growth Path 20

Strategic intent “The key strategic thrust of Wescoal is to be a leading junior miner with a sustainable resource base and a coal trading operation” Robinson Ramaite Chairman: Wescoal Holdings 21

Structure and background Wescoal Holdings > 80 Years of operational experience in SA Khanyisa Functioning operations Intibane Benoni, Isando, Pretoria, Port Trading operations Elizabeth, Worcester, Atlantis, Paarl and Cape Town Future operations Elandspruit 652,949 tons of coal Sales (six months) 942,291 tons of coal (2013: 21,831 tons of coal) Production (six months) (2013: 895,185 tons of coal) Strategic intent – Leverage critical mass to enhance group earnings Future production target 4m tons of coal by 2016 Strategic intent – Division will produce the bulk of the Group’s profit 22

Executive and operational management Executive André Boje Morné du Plessis Wiseman Khumalo Chief Executive Officer Chief Financial Officer Executive Director Operational Dutch Botes Bonani Siko Ettienne Strydom Mike Berry Curtis Mnisi CEO – Wescoal Mining General Manager Projects Manager Operations Director Group Financial Operations – Wescoal Wescoal Mining Wescoal Trading Manager Mining Wescoal Holdings 23

Our growth path • Wescoal Trading • Wescoal Mining   • MacPhail acquisition added • Additional assets acquired in order critical mass to segment to supply local contracts as well as access export opportunities Silverbank & Verblyden Elandspruit GTIS 40,16 million tons Strip ratio: 2.35:1 Potential of 4 million tons Intibane of coal mined per year Phase 2 GTIS 0.82 million tons Strip ratio: 1.5:1 Khanyisa Pillar and other GTIS 1,15 million tons extensions Strip ratio: 3.5-4:1 2009 2010 2011 2012 2013 2014 2015 2020 onwards 24

Our growth path - Khanyisa • Additional 1,3 million tons 25

Our growth path - Intibane • Additional 2,2 to 2,9 million tons 26

Coal Distribution Centre • Situated in Belville, Western Cape • Logistics partner, Logistics Intelligence (LQ) • One of a kind carbon capture site • substantially reduces the carbon footprint • switch from road to rail • product does not go to ground during transportation, transhipment or bulk storage • Very well received by customers 10 000 tons of coal pm taken off road and transported by rail (equal to 350 road vehicles) 27

Coal Distribution Centre 28

Elandspruit project 29

Surface rights Complete WIP Complete Complete Complete 30

Background information • 10km’s west of Middelburg Mpumalanga • Needs infrastructure and services • Rail sidings 1km south and 2km east • Adjacent to Glencore/Shanduka and Steelcoal collieries • Surface rights mainly agricultural • Total measured resource 40.17 MTIS 31

Funding structure • Total funding for Elandspruit R170m • Investec facility R110m • Funding from internal cash flows R60m • Project to-date spend R65m 32

Investec funding structure R200m facility • R180m - 5 year term loan • R20m - 5 year working capital facility Application of funds • R70 million to retire current Investec term facility • R110 million for commissioning of Elandspruit Colliery, including Muhanga coal processing plant acquisition, mine operational infrastructure, surface rights and production start-up costs • R20 million working capital facility available for general purposes 33