Dear Coalworks shareholder,
On behalf of the Board of Directors of Coalworks, I would
like to wish you a happy New Year and to take this
opportunity to update you on the progress we made as a
business in 2011, which we anticipate will continue at pace
in 2012.
2011 marked an exciting year for Coalworks and continued the rapid progress with the company's strategy of building a profitable, independent Australian coal producer. Against a background of turmoil in global financial markets, Coalworks continued to build the asset backing of the company through developing a significant and strategic inventory of coal resources, while at the same time increasing the value of its tenements through the achievement of a number of significant milestones. These included:
• Completing a pre-feasibility study at the Vickery South coking and thermal coal project in the Gunnedah Basin, where we also made a strategic land acquisition to position the project for infrastructure access;
• Completing Stage Two of drilling at our Ferndale project;
• Significantly advancing studies on our Oaklands North coal-to-liquids project; and
• Spinning off Orpheus Energy Limited and issuing an in specie distribution of shares to Coalworks shareholders.
We believe this momentum will continue into 2012. During the
first quarter, we anticipate lodging a preliminary
environmental assessment for Vickery South, as well as making
progress with our options for port and rail access. Also
early in the New Year, we anticipate the release of a
JORC-compliant resource for Ferndale, which we believe will
justify our confidence in the strategic nature of that
project.
Importantly, in the third quarter of 2012 we expect the
completion of the bankable feasibility study for Vickery
South that will provide the vital parameters for us to move
ahead with development, in conjunction with our partner
Itochu. In parallel with work in the Gunnedah Basin, we also
expect to move into a pre-feasibility study at Ferndale in
partnership with Boardwalk Resources.
COALWORKS Limited ACN 114 702 831
Level 5, 44 Miller Street, North Sydney NSW 2060 AUSTRALIA Ph: +61 2 9922 1344
Fax: +61 2 9922 4288
Email: info@coalworks.com.au
COALWORKS Limited Strong Management Team
At the corporate level, Coalworks has continued to strengthen
its management team over the past year in order to assemble
the necessary commercial and technical skills to create a
successful independent coal company. This included our recent
announcement of Geoff Kidd's appointment to the role of Chief
Operating Officer.
In December 2011, Coalworks appointed Pitt Capital Partners
as the company's corporate adviser to assist the Board and
management with delivery of our strategy. Pitt Capital brings
to Coalworks a depth of experience of working with major coal
companies and Coalworks looks forward to working with Pitt
Capital to take our strategy forward.
Part of Pitt Capital's role will be to consider the
implications for Coalworks of the Whitehaven-Aston merger
proposal announced in December, including the involvement of
Boardwalk, Coalworks' 19.9% shareholder and our partner at
Ferndale. Whatever the outcome of that process, we believe
that the Whitehaven-Aston transaction demonstrates the
valuable and strategic nature of Coalworks' high quality
project pipeline, given its position at the core of
Boardwalk's own portfolio.
Also in December, the Board noted a number of significant
changes to the share register. Firstly, we welcomed Acorn
Capital as a substantial shareholder in Coalworks with a 6.1%
stake, while at the same time Macquarie Group Limited
increased its stake in Coalworks to
8.19%. We believe that these developments further strengthen
our shareholder base and provide additional validation of our
strategy to build a new independent coal producer in an
industry that is consolidating rapidly and providing new
opportunities for emerging players.
In summary, I would like to thank you for your ongoing
support of Coalworks. The Board of Directors and management
of Coalworks remain focused on delivering value for all of
the company's shareholders. We believe that Coalworks is a
high quality coal business and that, with the momentum we
have built up in 2011, and the ongoing rationalisation of the
sector overall, the company is poised for a significant
re-rating in 2012.
Yours sincerely,
Wayne Mitchell, Coalworks Chairman
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