Ann: Agreement for first South African coal fines, page-2

re: Ann: Agreement for first South African co... Obviously the existing amount of discarded coal does not justify an immediate investment. Therefore the deal is another extension of Whites ongoing due dilligence activities, luckily with a minor cash flow. IMO Phase 2 will be realized if more third party ROM coal is beneficiated and pulled through Woestalleen in the nex 12 months and/or the purchase of third party coal fines from surounding mines is commercially viable. Nothing real substantial at the moment. Nevertheless the arrangement has to be seen as an embedded element in the development opportunities for the Woestalleen coal processing complex. Woestallen strongly supports some key elements of Eskoms coal purchasing strategy, namely the road-to-rail-migration plan and the sourcing of beneficiated/briquetted coal fines. Coal of Africa as the former owner of Woestallen successfully investigated the business scenario to run the plant as a logistic hub. In this scenario coal trucks for Eskoms power stations would be redirected from mines to the hub. From there the coal could be send by rail to the power stations to reduce transport and road damage costs. The sourcing of beneficiated/briquetted coal fines is currently under evaluation by Eskom. A decision about this business case is expected by the end of July 2014.