Homeland Energy Group Provides Update on Status of Outstanding Financial Statements
14.06.2012 | Marketwired
![Homeland Energy Group Provides Update on Status of Outstanding Financial Statements](https://www.goldseiten.de/media/goldseiten-news.jpg)
- Third Draw Down under ICICI Facility and
- other Corporate Developments
TORONTO, 06/14/12 - Homeland Energy Group Ltd. (TSX: HEG) ("Homeland" or the "Company") is pleased to announce that the British Columbia Securities Commission and the Ontario Securities Commission (the "Commissions") have granted a full revocation (the "Revocation") of the cease trade order issued by each of the Commissions against the Company (the "CTOs").
The CTOs had been imposed by the Commissions for failure by the Company to file its audited financial statements for the year ended December 31, 2011, management discussion and analysis for the year ended December 31, 2011, annual information form for the year ended December 31, 2011 and the certifications required with respect thereto (collectively, the "Annual Filings") by March 29, 2012. The Company filed its Annual Filings on May 7, 2012. However, the Company was unable to file its interim financial statements for the three months ended March 31, 2012, management discussion and analysis for the three months ended March 31, 2012 and the certifications required with respect thereto (collectively, the "Interim Filings") by May 15, 2012. The Company filed its Interim Filings on May 24, 2012. All of the Company's continuous disclosure documents can be reviewed on SEDAR.
The Company is also pleased to announce that its annual meeting of shareholders will be held in Toronto on Friday June 29, 2012 at 10:00 am. The Company is recommending the election of the following persons as directors: Raaj Kumar, Edwin Lee, Mike Garvey, Neena Gupta, Bhaskar Rao and Avinash Shah. Mr. Shah is standing for election to replace Mr. Ashis Basu who has declined to stand for election as a director and resigned as Chief Executive Officer effective June 1, 2012. The Company would like to thank Mr. Basu for his contributions to the Company and wish him well as he pursues other opportunities within the GMR Group. Mr. Shah became Chief Executive Officer effective June 1, 2012.
Mr. Avinash Shah, 55, is an Executive Vice President in GMR Energy. He joined GMR in July 2006 as Vice President - Hydro Business and subsequently headed Thermal Business Development and also the implementation of a 1370 MW power project in Central India. He is a qualified chemical engineer from the Indian Institute of Technology, Delhi and also holds a post graduate diploma in management from the Indian Institute of Management, Calcutta. He has more than 30 years of experience in project finance and business development. Prior to joining GMR, he was working with IBM as Asia Pacific Manager.
The Company also wishes to advise that it is seeking shareholder approval to extend the period for which to repay the US$34,000,000 owed to GMR Energy, its controlling shareholder. This loan currently comes due on June 27, 2012 but GMR has agreed to extend the due date until following the shareholder meeting. The loan will continue to bear interest at the rate of LIBOR plus 4.5% and will now come due on March 31, 2019. Interest will accrue over the term of the loan but will not be payable until the maturity date. However, the Company will be required to begin repaying the principal amount over time starting with US$1.25 million on September 30, 2012 and a further US$1.25 million on March 31, 2013. For full particulars of the repayment schedule, please see the management information circular dated May 28, 2012. Completion of this transaction is subject to approval by a majority of the shareholders of the Company excluding GMR Energy and its associates and affiliates. It is also subject to obtaining final approvals from GMR Energy which are expected to be obtained within the coming days. The Company wishes to thank GMR Energy for its continued support and encourages shareholders to vote in favour of the proposal.
The Company wishes to announce that it has drawn down a further US$5,000,000 of its US$30,000,000 credit facility with ICICI Bank first announced in July of 2011. This brings the total amount drawn down to US$25,000,000 with a further US$5,000,000 still available.
Further to the Company's Press Release of March 16, 2012, the Company provides the following update on its mining operations:
Kendal
- As reported previously, production activities in Block E in Q1 were focused on developing sufficient pit room to facilitate production in the 2 seam elevation once the flooding was brought under control.
- By the end of March 2012, the Company was able to mine the first 2 seam coal, but was insufficient to meet the capacity of the wash plant. The measures implemented to deal with the influx of water have had the desired dewatering effect to the extent that all waste and coaling operations on the 2 seam can continue uninterrupted. The pumping infrastructure installed over the past 6 months has managed to bring the water under control and as mining progresses to the east, a permanent sump will be established with the current infrastructure to manage any seasonal influx in future.
- As an interim measure until steady state operations could be achieved in the 2 seam of Block E, the Block D pit was brought back into operation and, with selective mining, yields in excess of 44% were achieved.
- In formulation of the revised NI 43-101 technical report in March 2012, management commissioned a detailed technical study of the previously undermined 4 lower seam with the aim of quantifying the reserves in this area. This study showed that extensive primary extraction was practiced in the 4 lower seams and a negligible volume of this coal is mineable. With this information, management has planned to mine the tonnages not achieved in the 4 lower seams from the Block D pit, thereby maintaining wash plant production capacity levels, that has resulted in a lower overall yield. On a positive note, the reserve statement indicates a higher proportion of mineable 2 seam coal in Block E than previously reported. This ascribed to improved information as a result of routine exploration drilling on the operation.
- The mining of Block D allowed sufficient exposure time in the Block E box cut and the first roll over mining face was achieved in the south of the box cut in May 2012. The north face roll over will be completed in July 2012 and then the mine will be in full steady state.
- Production from the opencast has improved month on month from March 2012 and will stabilize at budgeted levels by the end of Q2.
- Due to the complexity of the geology in the Kendal area as seen in frequent yield fluctuations, management has investigated the possibility to perform upgrades on certain parts of the wash plant that would improve the yield due to slimes recovery. It is expected that this project will be complete by October 2012.
Northfield
- The three mining permits applicable to this asset were renewed timeously.
- Off take of this product, that is essentially slurry material, is slow and due to product pricing not being able to recoup initial investment costs and a substantial post closure rehabilitation liability, it is being considered to dispose of this asset in its entirety. Previously the quantity and quality of the saleable fraction of material was determined as a whole. As extensive mining has taken place and the walls of the dump are now exposed, it is clear that the slurry was cladded with discard material not suitable for any market. The effect is that a significant portion of the remaining material will need to be disposed of, that was previously not planned and for which sufficient liability has not been considered. It is being contemplated that the current purchaser of this product may be willing to take over this facility in its entirety since they are the only company able to use this material in the area.
Eloff
- The Eloff feasibility study has been completed by Mindset Consultants and is currently under review by management.
Management Changes
- A Mine manager has been appointed to focus on the operation of Kendal Colliery that will allow the General Manager to focus more on the Northfield site and progressing the Eloff project from feasibility to an operational asset.
- A specialist Environmental Manager has been engaged to ensure all SA based legislation is complied with.
Homeland Energy Group Ltd. (TSX: HEG) is a coal producer with operations in the Witbank area of South Africa. The company also has a large-scale development property in South Africa and exploration interests in Southern Africa. Homeland will continue to seek out interests in additional coal projects in South Africa and neighbouring countries as well as internationally. Homeland Energy Group Ltd. is currently traded on the Toronto Stock Exchange under the symbol "HEG" with 471,204,149 common shares issued and outstanding. www.homelandenergygroup.com
Contacts:
Homeland Energy Group Ltd.
Ajay Gupta, Chief Financial Officer
+1 416 506-1979
info@homelandenergygroup.com
www.homelandenergygroup.com