WHITE ENERGY COMPANY LIMITED White Energy Company Limited
Mining Exploration Entity Quarterly Activity Report
and
Appendix 5B
March 2022
SUMMARY OF ACTIVITY
A summary of the major items of activity for White Energy Company Limited ("White Energy", "WEC" or the "Company") during the quarter ended 31 March 2022 is outlined below.
HIGHLIGHTS
• Appeal lodged in Singapore Court of Appeal for the litigation proceedings against Bayan Resources Tbk
• Yankuang Group is investigating the use of BCB technology in China
• River Energy is pursuing opportunities for BCB projects in South Africa
• Analysis of iron oxide-copper-gold surveys in South Australia in progress
1. AUSTRALIA
South Australia - EL6566 (previously EL5719) and PELA674
During the quarter, work continued on examining coal gasification and emerging hydrogen opportunities from coal.
Baseline surveys were carried out in December 2021 for iron oxide-copper-gold styles of mineralisation that targeted a new zone of interest in the magnetic corridors of the Hilga Mineral Field and historical anomalies from calcrete sampling programs completed in 2012-2013 and 2018. The geochemical analysis using biochemical (predominately leaf), calcrete and soil sampling is in progress, and further target areas are planned for survey in 2022.
Capital expenditure related to exploration activities of $20,000 was incurred during the quarter.
BCB
WEC is investigating the implementation of its BCB technology for use in Yankuang Group's coal briquetting business in China. Testing of coals from Shandong and Shanxi Provinces has been successfully conducted at WEC's test facility in Cessnock and the Company's briquetting machines were used for larger scale tests in China. Yankuang Group constructed a small pilot plant in Shandong Province using WEC's patented BCB technology, and this is the first step in commercialisation of the technology in China.
Following discussions with the Yankuang Group, design of a 200,000 tonnes per annum BCB plant for a mine site in Shanxi Province has been completed. The contract for construction of the plant that is funded by the customer under White Energy's design and engineering supervision has not been finalised yet. It is hoped the contract will be finalised when the travel restrictions imposed for COVID-19 are eased and the WEC engineers are able to visit the plant site in China. Yankuang's interest was in briquetting fine wet coal with a small addition of calcium carbonate to reduce sulphur emissions to sell to civil and domestic customers. The Company has been advised that there is a move away from this concept due to other environmental factors. However, there remains a significant opportunity for the briquetting of fines in China, particularly for semicoke plants.
2. AFRICA - RIVER ENERGY JOINT VENTURE - WEC 51%
White Energy's 51%-owned subsidiary, River Energy JV Limited, through Proterra Investment Partners (Proterra, 49%), is in discussion with a number of South African coal miners interested in the Group's Binderless Coal Briquetting (BCB) technology.
Extensive testing by River Energy, including successful briquetting and combustion trials, has previously demonstrated that a saleable export grade coal product can be produced from South African reject tailings. Proterra is pursuing opportunities, from their offices in Johannesburg, on mine sites in South Africa to secure access to fine coal to support BCB projects.
Using the BCB process, a briquetted 6 tonne sample of fines from a mine in the Middelburg region has been successfully tested by a South African power producer. A further bulk sample of up to 50 kt has been requested to carry out a commercial scale trial and a proposal has been submitted. White Energy is assisting Proterra in the design of a small demonstration plant to facilitate this work and other trials in South Africa.
The BCB process provides an attractive solution for coal producers seeking to maximise mine yield and facing the environmental challenges posed by reject coal fines. In South Africa alone, it is estimated that there are over 1 billion tonnes of discarded coal in tailings facilities, much of which may eventually need to be reclaimed.
3. GENERAL CORPORATE
The Company has no significant secured corporate debt. Limited-recourse shareholder loans provided to the Group's 51% owned operations in the UK and Mauritius by both White Energy and the minority shareholders in proportion to their ownership interests are repayable in January 2025.
As outlined in Section 6 of the Appendix 5B, directors' fees and salaries including superannuation paid during the quarter to Directors and their associates totaled $55,000.
Proceeds from the Group's sale of its interest in Mountainside Coal Company are being progressively received. Further instalments of $2.5 million are to be paid by June 2022, and these payments have been delayed due to the new owner completing their finance arrangements.
COVID-19 Update
White Energy continues to maintain appropriate measures to ensure the health and safety of its employees, contractors and the public, in compliance with government directives on COVID-19. Operations are continuing normally, although progress on BCB projects has been slowed due to travel restrictions affecting our key potential customers, particularly in China.
PT Kaltim Supacoal ("KSC") - WEC 51%
White Energy is engaged in legal proceedings in the Singapore International Commercial Court ("SICC") initiated by subsidiaries of White Energy, BCBC Singapore Pte Ltd ("BCBCS") and Binderless Coal Briquetting Company Pty Limited, against PT Bayan Resources Tbk and Bayan International Pte Ltd (collectively, "Bayan") in connection with the KSC joint venture.
As a result of the SICC dismissing Bayan's counterclaim against BCBCS and BCBC in April 2016, there is no longer any damages claim against the White Energy Group in these proceedings.
The trial for the third tranche of the proceedings was concluded in January 2021, with the only issues remaining to be determined by the SICC relating to the damages which may be payable to BCBCS.
The claim for damages comprised of the following:
(i) BCBCS claimed for wasted expenditure, being expenses incurred by BCBCS which were rendered futile by reason of Bayan's breach and repudiation of the joint venture;
(ii) Further, BCBCS claimed for loss of the chance of expanding the capacity of the joint venture to at least 3 million tonnes per annum; and
(iii) Interest on damages award and legal costs.
The SICC released its decision on 7 February 2022 in relation to the third tranche of the proceedings. The SICC found in favour of BCBCS on the majority of the issues for determination. The SICC found in BCBCS' favour on all of the preliminary legal issues including in relation to remoteness and reflective loss.
The SICC also concluded that the technology underlying the BCB process would have worked and that the Tabang Plant would have achieved nameplate capacity of 1 million tonnes per annum by June 2012, and that the upgraded coal produced at Tabang would have been a saleable product.
Notwithstanding the above findings, the SICC dismissed BCBCS' claim for damages for wasted expenditure. The SICC concluded that Bayan would have been able to take steps to put KSC into liquidation, thereby bringing the joint venture to and end before the joint venture would have had sufficient cash flows from which BCBCS could recoup its wasted expenditure.
In relation to BCBCS' claim for loss of chance to expand the project, the SICC took the view that there did not exist a real and substantial chance that Bayan would have agreed to expand the capacity of the Tabang project.
On 7 March 2022, BCBCS filed a notice of appeal in the Singapore Court of Appeal in order to appeal certain of the findings made by the SICC in the third tranche of the proceedings. BCBCS is required to file its appeal case with the Court by 23 May 2022, with Bayan to file its defence one month thereafter. The Court will hear the appeal at a time to be set that is between 5 and 16 September.
The SICC in the third tranche judgement stated that it would hear parties in relation to costs. The parties made their submissions on costs for the proceedings (Tranches 1 to 3) on 21 March 2022, with BCBCS filing its reply submissions on 14 April 2022 and Bayan filing its reply on 28 April 2022. The SICC will decide the issue on the basis of submissions without a hearing.
4. INTERESTS IN MINING TENEMENTS
Below is a listing of the Company's interest in mining tenements, where they are situated and the percentage interest the Company holds in each.
The Company and its subsidiary hold an interest in the following mining tenements:
Tenement
Locality
Licensee
Interest
Coal Exploration Licence and Retention Lease EL6566 and RL104(a)
Lake Phillipson, South AustraliaSouth Australian Coal Pty Ltd 100%
Petroleum Application PELA674
Lake Phillipson, South AustraliaWhite Energy Company Limited 100%
(a)The renewal of RL104 has been applied for and is pending.
Appendix 5B
Rule 5.5
Mining exploration entity or oil and gas exploration entity quarterly cash flow report
Name of entity
White Energy Company LimitedABN
62 071 527 083
Quarter ended ("current quarter")
31 March 2022
Consolidated statement of cash flows | Current quarter $A'000 | Year to date (9 months) $A'000 |
| 131 - (35) - (356) (199) - 1 (4) - - 2 | 272 - (103) - (1,116) (1,158) - 2 (13) - - 62 |
(460) | (2,054) |
(*) Includes legal fees incurred in respect of KSC dispute.
2. 2.1
Cash flows from investing activities Payments to acquire or for:
(a) entities
(b) tenements | - | - |
(c) property, plant and equipment | - | (11) |
(d) exploration & evaluation | (13) | (89) |
ASX Listing Rules Appendix 5B (17/07/20)
+ See chapter 19 of the ASX Listing Rules for defined terms.
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White Energy Company Limited published this content on 29 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 April 2022 07:01:00 UTC.
