History
Ikwezi raised A$30M to build a South African coal mine, waited seven years to mine its first coal, and delisted from the ASX in 2022 after a profitable year.
2011-2012: Listing and a slow start at Newcastle
Ikwezi Mining, a Bermuda-incorporated company exploring for coal in South Africa, listed on the ASX on 15 July 2011 after an IPO underwritten by Euroz Securities. The offer was 150,000,000 shares at 20 cents to raise $30 million. In September 2011 it agreed to acquire 70% of two Waterberg prospecting rights, setting an unverified exploration target of 2-4 billion tonnes.
The main project was Newcastle, where production was first targeted for early to mid 2012. The mining right slipped, then was granted in February 2012. A rail agreement with Transnet covered 1.5 million tonnes a year, and Stefanutti Stocks Mining Services became the mining contractor in April. The resource rose to 221 million tons with a first reserve of 14 million tons. But the water licence stayed pending, and the project, renamed Ntendeka Colliery, slipped again. By June 2012 cash was A$12.131M, down from A$24.5M nine months earlier, and the company deferred production to early 2013, citing low thermal coal prices.
2013-2014: Approvals arrive, money runs short
In January 2013 the Waterberg agreement lapsed because a required approval never came. The same month Ikwezi signed a three-year deal with Vitol to sell 3.96 million tonnes of coal, conditional on arranging funding within three months. The water licence was finally granted in March 2013, and resources rose to 294 million tonnes with reserves of 16 million.
Funding, however, never closed. By September 2013 cash was A$1.979M and production was pushed to 2014. In January 2014 the company agreed to sell part of its Alleen No. 2 mining right for ZAR8M (A$0.84M). By March 2014 cash was A$1.149M and the company was reviewing strategic options. Chairman Simon Hewetson resigned in June 2014, and David Pile became Executive Chairman.
2014-2016: A small rights issue and a redesign
In December 2014 came the first raising since the IPO: a 2-for-1 rights issue at A$0.006 a share, fully underwritten by Azure Projects, to raise up to A$4.065M. Shareholders took up only about half, A$2.015M, and Azure took the remaining shortfall shares. Shares on issue rose from 338,750,000 at the end of 2013 to 1,016,250,000 a year later.
In 2015 two directors joined the board. The company decided not to renew its Dundee prospecting right and began redesigning Ntendeka for a phased, lower-cost start. By mid-2016 it was targeting run-of-mine coal (coal sent on without washing) from the Central opencast, with mining aimed at early 2017. The Acorn prospecting right lapsed. A December 2016 presentation said the mine plan was being remodelled for lower prices and that no reserves were currently recorded, contradicting the earlier 16 million tonnes. The record for 2017 is quiet.
2018-2019: First coal
By December 2017 cash was A$0.599M. Ikwezi said it would not renew the Assegai right, leaving Ntendeka as its focus. Legal steps against three resisting families were well advanced, and by April 2018 house relocation in the Central Mini Pit was complete. CML Melger Mining was selected and signed as mining contractor. Short-term funding came from related party Osho SA Coal, in loans that reached ZAR30M (about A$3M) by September 2018.
The project was now called the Newcastle Project, with mining at Kliprand Colliery. A box cut was completed and first coal was mined in September 2018. A 3-for-1 entitlement issue at A$0.002 a share, underwritten by Finevest Investments, sought up to A$6,097,500. Acceptances raised A$2.083M, with Finevest taking the rest. Shares on issue rose to 4,065,000,000. The Osho loans, A$4.352M, were repaid from the proceeds, and coal sales began in the March 2019 quarter. In July 2019 CML Melger terminated its contract, and Stefanutti Stocks took over mining.
2020-2021: Crisis and consolidation
In the March 2020 quarter receipts collapsed to A$0.568M from A$4.36M, cash fell to A$0.091M and about 180,000 tons of coal sat unsold. Related party Zarbon Coal (formerly Osho) advanced about US$1.66M under a US$4.3M facility. In late May 2020 the chairman, two directors and the company secretary resigned, and ASX suspended the shares until enough directors were appointed. Mining restarted in June with a new contractor. Nitin Agrawal became Chairman in September.
Ikwezi was also in arbitration with Stefanutti Stocks, claiming about A$10.6M for under-delivery against a counterclaim of about A$3.3M. In December 2020 it proposed a 100-for-1 share consolidation, cutting about 4.065 billion shares to about 40.65 million. The record is then quiet until 2022, and the arbitration outcome is not captured.
2022: Profit and delisting
For the year to 30 June 2022 Ikwezi reported a net profit of A$15.86M, against a prior-year loss of A$1.51M, with operating cash inflow of A$10.7M, helped by selling more washed coal. The Zarbon Coal loan was fully repaid, leaving no long-term external debt.
In October 2022 the company applied to leave the ASX, citing very low liquidity, no Australian operations, savings of about A$250,000 a year and negative perceptions of thermal coal. A buy-back was planned, though its terms were not reported. Shares were suspended on 28 December, and on 30 December 2022 ASX removed Ikwezi from the official list after shareholders resolved to delist. It then held 70% of the Newcastle Project, with 40,649,974 shares and cash of A$10.111M at September 2022, including A$8.534M of deferred payments.
Written from the 44 story beats below (2011 to 30 Dec 2022), which come from the company's own announcements and filings.