[miningmx.com] — FIRESTONE Energy, the Australian resources company that plans to develop coal projects in South Africa, on Monday said it hoped to conclude the renegotiation of a memorandum of understanding (MOU) with SA power utility Eskom in this quarter.
“The board and Eskom’s designated project team are working to finalise a revised memorandum of understanding, during Q4 2011,” Firestone said in an update on its quarterly activities.
Renegotiation of the agreement has been undertaken in a bid to improve tonnages and to extend the supply period.
Firestone’s flagship project is the Waterberg Coal Project in the Limpopo Province, which is said to contain about 50% of South Africa’s remaining coal resources.
“The immediate outlook for the company is to focus upon successfully concluding the renegotiation of its Eskom memorandum of understanding and the achievement of a satisfactory outcome with the proposed cornerstone investor,” the company said.
Firestone’s joint venture with Sekoko Resources has granted an exclusive period with a major, multinational listed mining and power company to conduct due diligence on the project.
It is intended the company would present a firm development proposal to Firestone at the end of its due diligence process, the company said.
“Successful completion of the due diligence by the global power company may result in Firestone securing a cornerstone investor that has the potential to inject cash and to provide significant off-take,” the company said at the time it released its full year results.
At the end of September, Firestone reported a slight widening in its full year net loss to AU$4.8m from AU$3.4m previously.
A loss per share of AU$0.19 was reported for the year to end June, compared to a loss of AU$0.16 a share in the last financial year.
Looking ahead, the company said it would continue to seek the necessary regulatory approvals for the Waterberg Coal Project.
“The growing interest in South African coal, South Africa’s shortage of power and the level of activity within the energy and coal sector provides an encouraging economic framework within which to advance this project,” it added.
