Keaton Energy has released the following quarterly production update for the period ended 30 September 2013.

The safety performance at both group collieries remained excellent for the period.  Vanggatfontein reporting a LTIFR of 0.10 and Vaalkrantz a LTIFR of 0.17 as at end September 2013.  Keaton Energy commends all involved for this performance.Group production grew strongly in the quarter, continuing the trend reported on previously. Vanggatfontein Colliery delivered 616 668t of washed 2- and 4-seam thermal coal to Eskom in the quarter, an increase of 17% over the previous quarter’s record 526 034t.  Thus the colliery delivered 1.14Mt in the first half of this financial year compared with 0.77Mt for the previous half year, an increase of 55%.

5-seam metallurgical coal sales into the domestic market increased by 18% to 29 908t from 25 246t in the previous quarter.  The colliery thus delivered 55 154t in the first half of this financial year compared with 34 389t for the previous half year, an increase of 60%. In addition, Vanggatfontein washed 67 714t of third party coal during the quarter, versus 78 071t in the previous quarter, a decrease of 13% caused by a reduction in spare washing capacity.  Some 145 785t of third party coal was washed in the first half of the year versus 97 985t for the previous half year, an increase of 49% .Discard and slurry sales from Vanggatfontein totalled 295 317t for the period versus 260 646t for the previous quarter, an increase of 13%.  A total of 555 963t of discard and slurry was sold during the first half of this year versus 281 413t for the previous half year, an increase of 98%.

Furthermore, Pit 4 was opened from operational cash flows which will allow for even greater flexibility and optimisation of future mining activities.

Production at Vaalkrantz Colliery continued to be affected by challenging geological conditions and labour disruptions.  The colliery sold 77 691t of anthracite to domestic and export customers during the quarter, up 1.6% over the last quarter’s 76 454t.  Thus Vaalkrantz sold 154 145t of anthracite for the first half of this year versus 175 797t for the previous half year, a decrease of 12%, an excellent achievement given the difficult operational conditions. Mandi Glad, Keaton Energy CEO said “We continued our trend of record production and cash generation during the second quarter of FY2014.  Not only has Vanggatfontein settled into a steady-state production unit but secondary cash generating activities performed strongly as we optimised the mine. Vaalkrantz continues to be a difficult operation but excellent safety and production management is overcoming the challenges there”.

Glad added “It is pleasing that we will soon close the Xceed transaction and thereby acquire another major open-pit coal deposit adjacent to Vanggatfontein.  This, together with our internal pipeline of development projects, provides a solid growth platform for the group.” Closing with, “We will announce our half year results in mid-November – it is going to be a pleasure”!

The above information has not been reported on or reviewed by the company’s auditors.