We’re here today with Tony Weber CEO of Universal Coal. Tony thanks for your time. Are you able to share some of the background to universal?
Tony Weber: [00:00:16] Universal Coal, which is a PLC, listed on the ASX in about 2010. At the time we had several exploration assets, about 700 odd million tonnes on the balance sheet and effectively grown from strength to strength since then. Brought the first operation into production in 2014 and last year we brought the second operation into production – which I’m happy to announce now – is in a steady state and obviously looking to develop further the third the fourth carry on the growth profile.
David Tasker: [00:00:45] And just touching on the growth part what is the company looking in terms of expanding its operations?
Tony Weber: [00:00:51] Currently I mean the Kangala operation with the acquisition of Eloff next door. We’re looking at doubling production in the longer term. We’ve got a substantial resource reserve base there. So we’ve got ample opportunity to expand NCC in its own right as between 20 years of life on the current production profile which is 2 million tonnes sales annualised. So there alone production we’re looking at significantly over 5 million tonnes of sales. Brakfontein likewise fully permitted at the moment. It’s ready to pull the trigger all we need is a sales agreement.
David Tasker: [00:01:22] And is there much opportunity for further acquisitions in South Africa?
Tony Weber: [00:01:26] Yes there is. I mean the majors are obviously disposing some of their assets I mean NCC was one of those that we acquired which was mothballed at the time. We brought back into production on the back of adjacent resource base brought to life with 20 years of reserves. Effectively there are other disposals going on so we’ll always kick the tyres, have a look at them if we like what we see, we’ll dig into it and if we don’t we’ll pass and move on to the next one. We’ve got a growth pipeline of existing assets. Brakfontein and as I mentioned we’ve got on itself. So the future is good for Universal in terms of growth.
David Tasker: [00:01:59] And announcing a dividend?
Tony Weber: [00:02:02] It’s a big moment. I mean we always said it was going to happen. I mean our long suffering shareholders, we owe them something and we’ve always said once we’ve got two operations up and running that’s the right time to do it. So I’m glad to say it’s just been delivery on another instance and effectively the important thing now is to balance growth and returns. And I think we’re in a good position where we can actually achieve that.
David Tasker: [00:02:25] And looking forward what should shareholders be focused on?
Tony Weber: [00:02:28] I think shareholders on the one hand you can have the growth on the other hand you can to have the returns on the dividend side of things. It’s obviously been a long time coming. I mean to develop a resource company, a bulk commodity, it takes time to bring that to fruition. With two operations now we’ve got exposure to the export pricing API 4, which at present moment is obviously running. So we got that exposure and we’ve also got domestic coal which is more an annuity type return basis long term contracts in place. So it gives you certainty for the cash flows going forward. But then on the other hand you’ve got the growth opportunities both disposals and greenfields and brownfields expansion. More importantly for us is obviously brownfields because it lowers the cost of capital. So it’s a nice balanced company at the moment with growth and returns.
David Tasker: [00:03:10] Tony. Exciting times ahead for Universal Coal.
David Tasker: [00:03:12] . Thank you very much.