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Additional Information

Market:	ASX / AIM
Sector:	Coal
EPIC:	CCD

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Caledon Resources

Caledon Resources (ASX: CCD, LON: CDN) is a coking coal producer and explorer in the Bowen Basin of Queensland, Australia. It acquired the mothballed Cook Mine in late 2006 and has since recommissioned the operation and introduced an innovative new underground mining methodology.

The Company also purchased the nearby Minyango exploration concessions in 2006 and has conducted a number of drilling programs in preparation for a feasibility study.

Renewed takeover speculation lifts Caledon Resources

Friday, February 27, 2009

AIM and ASX listed coal producer, Caledon Resources, posted preliminary results for the year ended 31 December 2008, which reflected the move from exploration to production at its flagship Cook Mine in Queensland, Australia.

Financial highlights included revenues of A$121.9 million, a net profit of A$8.2 million and basic earnings per share of 4.3 cents. This was a marked improvement over the previous year, when coal production was in the initial phase of ramping up. Other notable highlights included a reduction in convertible loan notes to £18 million and a near doubling in cash in the bank to A$44.2 million.

“Caledon enters 2009 with its first ever profit from operations, a strong funding position and consistent levels of mining output. Expectations for 2009 sales remain subdued, with our December 2008 guidance of a minimum of 400kt remaining unchanged. We continue to manage the business with a sharp focus on costs, to preserve our strong financial position,” noted David Weill, Chairman of Caledon Resources.

Caledon did however also note that due to the softening demand for metallurgical coal, which is primarily used in the production of steel, it had engaged RBC Capital Markets to complete a strategic review.

Caledon added that the review will include “soliciting further interest” in the company and its assets. As part of the review, Caledon confirmed that it had already received formal contact with “several potentially interested parties” and that it had also received “non-binding, conditional written indication of interest at a level significantly in excess of the current market price.”

Speculation about potential suitors will certainly include several large Chinese players. China based groups have already announced a string of acquisitions or investments in Australian commodity projects already.

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