INTERIM RESULTS PRESENTATION 29 November 2012 Disclaimer Opinions - PowerPoint PPT Presentation

INTERIM RESULTS PRESENTATION 29 November 2012

Disclaimer Opinions expressed herein are by nature subjective to known and unknown risks and uncertainties. Changing information or circumstances may cause the actual results, plans and objectives of Keaton Energy Holdings Ltd (the “Company”) to differ materially from those expressed or implied in the forward looking statements. Financial forecasts and data given herein are estimates based on the reports prepared by experts who in turn relied on management estimates. Undue reliance should not be placed on such opinions, forecasts or data. No representation is made as to the completeness or correctness of the opinions, forecasts or data contained herein. Neither the Company, nor any of its affiliates, advisors or representatives accepts any responsibility for any loss arising from the use of any opinion expressed or forecast or data herein. Forward-looking statements apply only as of the date on which they are made and the Company does not undertake any obligation to publicly update or revise any of its opinions or forward looking statements whether to reflect new data or future events or circumstances. 2

Salient Features 1H FY13 vs. 1H FY12 1H FY13 vs. 2H FY12 » Financial » Revenue 255% 17% » Operating profit/loss (273%) (375%) » HEPS (351%) (1 723%) » Operations » Production » Power Station 211% 12% » Metallurgical 94% 55% » Sales » Power Station 222% 2% » Metallurgical 84% 11% 3

Safety Vanggatfontein LTIFR Vaalkrantz LTIFR 0.45 0.45 0.38 0.44 0.20 0.00 0.00 0.00 2H11 1H12 2H12 1H13 2H11 1H12 2H12 1H13 » 6 698 347 Fatality Free Shifts » 1 281 706 Fatality Free Shifts » 5 311 Fatality Free Production » 2 477 Fatality Free Production Shifts Shifts Lost Time Injury Frequency Rate (LTIFR) 4

Group ROM Production (t’000) Total 1 806 1 539 639 146 1H11 2H11 1H12 2H12 1H13 Metallurgical Coal Power Station Coal 1 505 1 345 285 132 484 155 146 62 - - 16 1H11 2H11 1H12 2H12 1H13 1H11 2H11 1H12 2H12 1H13 Vanggatfontein Vaalkrantz 5

Group Sales (t’000) Total 920 890 328 48 1H11 2H11 1H12 2H12 1H13 Metallurgical Coal Power Station Coal 738 726 151 123 229 99 48 41 31 - - 1H11 2H11 1H12 2H12 1H13 1H11 2H11 1H12 2H12 1H13 Vanggatfontein Vaalkrantz 6

Group Revenue (Rm) Total 417 343 132 35 - 1H11 2H11 1H12 2H12 1H13 Metallurgical Coal Power Station Coal 261 220 133 93 62 70 35 30 23 - - - 1H11 2H11 1H12 2H12 1H13 1H11 2H11 1H12 2H12 1H13 Vanggatfontein Vaalkrantz 7

Contribution to Revenue (Rm) 133 93 23 30 261 220 70 62 35 1H11 2H11 1H12 2H12 1H13 Power Station 5 seam Anthracite 8

SA Coal Demand 450 Forecast 400 350 300 250 Million tonnes 200 150 100 50 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Exports Domestic Sasol Eskom - Tied Eskom - Spot Eskom - New Build Other Generation 9

Vanggatfontein Colliery » New mining contractor appointed 1H FY13 2H FY12 1H FY12 June Key indicators » Record ROM production August Waste km³ 4 127 3 938 3 209 ROM kt 1 520 1 479 713 » R119m damages claim initiated Strip Ratio 2.72 2.66 4.50 against Megacube Mining Saleable kt 821 741 384 » Construction of new discard Reserves Mt 32 32 facility completed August On-mine cash cost/ROM 115 110 202 » Development of Pit 3 commenced ton (R/t) September Capital spent Rm 56.7 154.0 156.6 Employees and » 1 st 5 seam from Pit 3 delivered 473 612 398 contractors October » Coal Delivery 1H FY13: » 738 498t to Eskom » 31 272t 5-seam 10

Accelerating Demand for Metallurgical Coal 11

Vaalkrantz Colliery » Record Gus production August 1H FY13 2H FY12 1H FY12 » Lining of Pollution Control Dam Key indicators completed ROM kt 285 266 293 Saleable kt 162 176 175 » Coal delivery 1H FY13 Reserves Mt 2.50 3.00 » 53 445t export sales On-mine cash cost/ROM R/t 340 344 357 ton » 97 873t domestic sales Capital spent Rm 5.3 3.2 - » Record production October Number of Employees 767 723 719 incl. Contractors » Investment in underground mining equipment » Challenging geological conditions in West Alfred » Demand continues to exceed supply 12

Vaalkrantz Anthracite Prices (12-month moving average across all size fractions and qualities ) 900 800 700 600 R/t 500 400 300 200 13

Financial Overview % Change % Change 2HFY12 1HFY12 1HFY13 1HFY13 vs 1HFY13 vs Re-presented Re-presented 2HFY12 1HFY12 R' million Extracts from statement of comprehensive income Revenue 417 357 17% 118 255% Gross (loss)/profit (38) (8) (375%) 22 (273%) Gain on business combination - 114 (100%) - - Operating (loss)/profit before net finance (cost)/income (70) 108 (165%) 11 (736%) Income taxation credit/(expense) 19 9 111% (3) 733% Total comprehensive income for the period (64) 104 (162%) 8 (900%) Attributable to owners of the company (40) 118 (134%) 14 (386%) Earnings per share (cents) (21.0) 66.9 (131%) 8.4 (350%) Headline Earnings per share (cents) (21.1) 1.3 (1 723%) 8.4 (351%) Extracts from statement of financial position Property, plant and equipment 773 833 (7%) 636 22% Inventory 64 23 178% 10 540% Borrowings (280) (297) 6% (207) (35%) Extracts from statement of cash flows Cash generated by operations 63 90 (30%) 40 58% 14

Gross Loss 1H FY13 » Sales of R31 million deferred to 2H FY2013 due to transport strike » Expected decline in 5-seam production and sales in pit 1 » Poor performance by original mining contractor at Vanggatfontein » Poor geological conditions at Vaalkrantz » Increased depreciation charges of R35m before tax as a result of the early adoption of an accounting interpretation (IFRIC 20) 15

Normalised Earnings 2H FY12 % Change 1H FY12 % Change 1H FY13 Re-presented 1H FY13 vs 2H FY12 Re-presented 1H FY13 vs 1H FY12 R' million Operating (loss)/profit before net finance (cost)/income (70) 108 (165%) 11 (736%) Adjusted for: Gain on business combination - (114) (100%) - - #DIV/0! Loans acquired at a discount through business combination 1 (15) (107%) - - Normalised earnings (69) (21) (229%) 11 (727%) 16

Capital Expenditure 2H FY12 % Change 1H FY12 % Change 1H FY13 Re-presented² 1H FY13 vs 2H FY12 Re-presented 2H FY12 vs 1H FY12 R' million Mine development 58 100 (42%) 114 (12%) Mine Infrastructure 13 4 225% 35 (89%) Plant and Equipment 2 5 (60%) 2 150% Rehabilitation asset (16) 15 (207%) 29 (48%) Other¹ 5 (1) 600% 4 (125%) 62 123 (50%) 184 (33%) ⁽ ¹ ⁾ Includes Land and buildings, furniture and equipment and other small assets ⁽²⁾ Excludes property, plant and equipment acquired through the business combination 17

Net (Debt)/Cash Movement (Rm) 0 - - - - - - - -50 -100 -237 -253 -150 -1 -14 -200 78 -78 -7 -250 -3 9 -300 18

The Future…. » Stable operations » Consolidate and increase production at Vaalkrantz » Develop / acquire life of mine extensions for Vaalkrantz » Take advantage of ever increasing Eskom demand by: » Optimisation at Vanggatfontein » Completion of Pit 3 » Improve yields and plant availability to increase volumes » Investigate potential expansion on remainder of property » Evaluate extensions » Initiate development of Braakfontein and Sterkfontein » Seek value accretive acquisitions » Move towards paying dividends as we emerge as a mid-tier coal producer 19