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Disclaimersc a e
All statements in this presentation, other than historical facts, thataddress exploration activities and mining potential are forward-lookingstatements. Although Keaton Energy believes the expectationsexpressed in such forward-looking statements are based onreasonable assumptions, such statements should not in any way beconstrued as guarantees of future performance. Factors that could
d l t t diff t i ll f th d i l dcause developments to differ materially from those expressed includeexploration results, technical analysis and lack of availability to thecompany of necessary capital to progress its projects. The company issubject to specific risks inherent in the exploration and miningsubject to specific risks inherent in the exploration and miningbusiness and general economic and business conditions.
2
Who we areS li t f tSalient features
• New SA Coal explorer and developer
• Impetus• Increase in demand for coal• Changed SA mineral rights dispensation• Changed SA mineral rights dispensation
• Founded by Rutendo Mining and the Pouroulis family in 2006
• 2 advanced development projects, pipeline of exploration prospects
• Private placing R100 million – R10 per share
• Trade begins on the JSE main board on 22 April, 2008
142 illi h i i R400 illi i t t li ti
3
• 142 million shares in issue, R400 million in treasury post listing
What we haveC t t tCorporate structure
Izwi Coal(Pty) Ltd
Mafla Coal(Pty) Ltd
4
Why coal?E t l iExport coal prices
120
100
120
s B
ay
60
80
FOB
Ric
hard
s
20
40
US$
/t
2007 prices as at October
0
Jan-
03
Apr
-03
Jul-0
3
Oct
-03
Jan-
04
Apr
-04
Jul-0
4
Oct
-04
Jan-
05
Apr
-05
Jul-0
5
Oct
-05
Jan-
06
Apr
-06
Jul-0
6
Oct
-06
Jan-
07
Apr
-07
Jul-0
7
Oct
-07
Jan-
08
South African Spot Coal Index (Barlow Jonker)
5
South African Spot Coal Index (Barlow Jonker)Average Monthly Achieved Export Price (DME: Minerals Economics)
Why coal?SA l t k t 2004 2007SA coal export markets 2004 - 2007
52.9 55.452.4
60‘000 000 tons
45.1
20
30
40
50
0
10
Europe8.7 6.6 7.2 6.3
0
10
Middle East
Indian Sub-continent
0.8 3.3 2.5
10.5
0
10East Asia
0
101.6 0.8 0.6 1.8
North Africa
1.9 2.8 3.2 1.50
10
1.4 1.2 1.7 1.2
South America0
100.5 0.7 1.1 1.2
Indian Ocean Islands0
10
66
SA
Source: Barlow Jonker
Why coal?R l ti t f lRelative cost of coal
United Kingdom - Oil, Gas and Coal Prices for Electricity Generationg y(US$/tons oil equivalent)
400
450
S$/
ton
250
300
350
S$/to
eU
S
150
200
US
50
100
Q1'
03
Q2'
03
Q3'
03
Q4'
03
Q1'
04
Q2'
04
Q3'
04
Q4'
04
Q1'
05
Q2'
05
Q3'
05
Q4'
05
Q1'
06
Q2'
06
Q3'
06
Q4'
06
Q1'
07
Q2'
07
7
High Suphur Fuel Oil Natural Gas Steam CoalSource: IEA
Why coal?RBCT it tili tiRBCT capacity utilisation
88
Why coal?RBCT it tili tiRBCT capacity utilisation
8590
95
65
7075
80
Mill
ion
tons
50
5560
65
50
2005
2006
2007
2008
2009
2010
9
Capacity Actual Exports
Why coal?I l d l tiInland coal consumption
150
175
200
s
75
100
125
milli
on to
ns
0
25
50
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Power Generation Sasol Small Consumers Metallurgical Industry
2007 consumption for 12 months to October
10
Power Generation Sasol Small Consumers Metallurgical Industry
Why coal?I l d l iInland coal prices
110
90
100
70
80
90
d/to
n FO
R
60
70
Ran
d
40
50
2000 2001 2002 2003 2004 2005 2006 2007
11
000 00 00 003 00 005 006 00
Steam Coal
Source: Department of Minerals and Energy – Minerals Economics
Our projectsL tiLocations
SouthPRETORIA
Bela-Bela 29º Mokopane 30º
ast
South Africa
N
Bel
fa
WITBANKDuvha
Middleburg
N1
N14
JOHANNESBURG
DELMAS PROJECT
26 º
26 º
Delmas
KendalHendrina
u a
N12
N11
Heidelburg
STERKFONTEIN PROJECT
Mba
bane
MatlaKriel
BethalN3
N11
Pie
t Ret
ief
SecundaERMELO
Tutuka
0 30 km
12
Harrismith 29º Standerton Volkrust 30º
Grootvlei
Our projectsD lDelmas
• 1 635 ha property, p p y
• 6 000m drilled, 91 boreholes included in resource statement
• A further 40 holes completed
• Scoping study suggests a multi-product mine producing 250 000
0 1 000
m
producing 250 000 tons ROM per month from 3 open pitsDrill hole data included in resource statement
Holes drilled subsequently
Water course
Power line
13
Regional paved roads Illustrative cross section
DelmasN th S th h ti tiNorth South schematic cross section
Surface topography
No.5 Seam
Avg 1.32m
Avg 14.41m
No.4 Seam
Avg 8 5m
Avg 5.8m
No.2 Seam
Avg 8.5m
Avg 5.4m
14Paeleo floor
Not to scale
DelmasN 2 SNo. 2 Seam
Pseudo anthracite
Bitumin-ous
Mineable Tonnes (‘000)
Mineable Tonnes (‘000)
Resource Area
EAST
CENTRAL 4,40026,300Central(Indicated)
2,40010,000East(Measured)
anthraciteous
N West
24,40060,10017,60023,800
West(Indicated)
• Bituminous coal to yield 61% 22 1S West • Bituminous coal to yield 61% 22.1 MJ/kg product suitable for domestic power sector
• Pseudo-anthracite to yield a high-ash product
0 1 000
m
15
N 4 SDelmasN 4 SNo. 4 SeamNo. 4 Seam
Pseudo anthracite
Bitumin-ous
Mineable Tonnes (‘000)
Mineable Tonnes (‘000)
Resource Area
EAST
CENTRAL 6,40030,700Central(Indicated)
None10,300East(Measured)
anthraciteous
WEST20,90062,50014,50021,500
West(Indicated)
• Bituminous coal to yield 62% 22 5• Bituminous coal to yield 62% 22.5 MJ/kg product suitable for domestic power sector
• Pseudo-anthracite to yield a high-ash product
0 1 000
m
16
DelmasN 5 SNo. 5 Seam
Pseudo anthracite
Bitumin-ous
Mineable Tonnes (‘000)
Mineable Tonnes (‘000)
Resource Area
NoneCentral(Indicated)
None500East(Measured)
anthraciteous
EAST
CENTRAL 1,900
None900NWest(Measured)
3 600None500
SWest(Inferred)
NW
3,600
• Bituminous coal to yield 50% 27.5 MJ/kg product suitable for export
SW
0 1 000
m
17
Our projectsD lDelmas
Sept Dec Mar Jun Sept Dec Mar
1 t h l ti1st phase exploration
Scoping
S.L.P
E.M.PE.M.P
2nd phase exploration
Pre-Feasibility
Mobile plant delivery
Mining Right Application
Feasibility
Environmental Approval
CPR Listing
Resource update
Pre-feas results
Reserve update
Mining begins
18
Our projectsSt kf t iSterkfontein
• 4 009 ha property, 25 000m p p ydrilled, 132 boreholes included in resource statement
• Results indicate better than expected yields
• Significant portion may be North
low phosphorous – suitable for metallurgical market
• Each of Sterkfontein North and Sterkfontein South would support a shaft complex
South
Drill hole data included in resource statement
Illustrative cross section
190 800 1600
m
South
SterkfonteinN th h ti t li d tiNorth schematic stylised cross section
Surface topography
Avg 132m
Avg 30m
No.3 Seam marker
No.4 Seam
Avg 1.87m Avg 3.00m Parting
20
Not to scale
Our projectsSt kf t iSterkfontein
• Mineable coal resources* for• Mineable coal resources for No. 4 seam
• North 1:
North
• North 2:
o
• Indicated: 3.4 MtNorth 1
North 2 • Indicated: 14.1 Mt
• South:
SouthSouth • Measured: 17.3 Mt
• Total coal resource of 34.8 Mt
21
Exploration pipelinep o at o p pe e
• Ermelo Coalfield: application forErmelo
• Waterberg Coalfield: application for
prospecting rights over 1 189ha
EllisrasWaterbergprospect
Johannesburg
Ermelo Coalfield: application for
prospecting rights over 3 263ha
• Utrecht Coalfield: application for
ErmeloErmelo
prospect
Utrecht pp
prospecting rights over 50 887ha
• Klip River Coalfield: application for
Utrechtprospect
DundeeKli Ri
prospecting rights over 4 914haKlip Riverprospect
• Keaton Mining has submitted prospecting right applications over an
2222
g p p g g ppexploration pipeline totaling 60 253ha in 4 different South African coalfields
The investment casee est e t case
• Sound regulatory environment:g y
company design from inception to be fully compliant with new Mineral Rights dispensation
• Strong, experienced team
• Sufficient capital to get into production - R400m in treasury at listing
• Excellent projects and prospects in the right locations:
good product spread
active exploration pipeline
rapid exploration/development/production trajectory
23
• No better time for coal in SA and internationally with robust domestic and export markets
Private placing mechanicsd ti t bland timetable
• Following the presentation, interested participants will be emailed g p p pirrevocable application forms for signature, together with a spreadsheet template for completion
• Signed application forms together with completed spreadsheets to be emailed to Nedbank Corporate Finance (Attention: Michelle Henning) by 12h00 on Tuesday, 8 April
• Successful applicants notified of their allocation by close of business on Wednesday, 9 April
• Abridged PLS published on Tuesday, 15 April
• Listing on the JSE on Tuesday, 22 April (shares issued and payment made)
24
Contact details: Michelle Henning (Tel: 011 294 3524, Fax: 011 294 8602, michellehenning@nedbank.co.za)
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