KEATON ENERGY HOLDINGS LIMITED (Incorporated in the Republic of South Africa) (Registration number 2006/011090/06)
JSE share code: KEH ISIN: ZAE000117420 ("Keaton Energy" or "the Company")

Quarterly Production Update

Keaton Energy has released the following quarterly production update for the quarter ended 30 June
2015 (Q1 FY16)
The safety performance at both group collieries deteriorated with Vanggatfontein reporting a LTIFR of 0.37 (Q4 FY15: 0.10) and Vaalkrantz a LTIFR of 0.28 (Q4 FY15: 0.22). Management is addressing this temporary setback.
Production at Vanggatfontein Colliery was as per plan and in line with the comparable quarter in
FY15 with 617 413t of washed 2- and 4- Seam thermal coal being delivered to Eskom (Q1 FY15 :
617 324t). 5-Seam metallurgical coal sales into the domestic market during the quarter decreased
28% to 26 548t (Q1 FY15: 36 799t) in line with the geological model. 25 951t of B-grade coal was sold during the quarter (Q1 FY15: 13 531t) an increase of 92% as the product gained market acceptance.
Mandi Glad, Chief Executive Officer, said "Vanggatfontein continues to perform consistently both in terms of production and financial criteria. Another solid performance underpins the coming expansion with the Moabsvelden project."
The results from Keaton Energy's Vaalkrantz Colliery demonstrated the effects of the issues reported at year end, with local anthracite sales being 69% down to 16 306t (Q1 FY15: 52 578t) and export sales down 73% to 11 000t (Q1 FY15: 41 000t). However, 34 999t of the new 32% ash product were sold (Q1 FY15: 0).
Glad commented "Vaalkrantz's performance was understandable in the light of the challenges faced in putting the operation back onto a sound footing. The new management team have made great strides in resolving the issues and we are already seeing improved performance at the colliery."
"Keaton Energy ended the quarter in a confident mood. Our long-life, Vanggatfontein Colliery, soon to be expanded with Moabsvelden, performs consistently well. Vaalkrantz continues to provide challenges but the new management team are on top of the task and we have recovered from the setbacks reported at year end. We are back on track."
The above information has not been reported on or reviewed by the Company's auditors. Johannesburg
16 July 2015
Sponsor
Investec Bank Limited

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