| Mon 10 Sep 2007, 11:10 | | GVM - GVM Metals Limited - Market update |
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GVM
GVGVM
GVM - GVM Metals Limited - Market update
GVM Metals Limited
(previously, "Golden Valley Mines Limited")
(Incorporated and registered in Australia)
(Registration number ACN 008 905 388)
Share code on the JSE Limited: GVM & ISIN: AU000000GVM1
Share code on the Australian Stock Exchange Limited: GVM & ISIN: AU000000GVM1
("GVM" or `the Company")
MARKET UPDATE
Since the last trading update released on 7 June 2007 and the subsequent June
Quarterly Report, the Company is pleased to announce that significant progress
has been made towards the development of the Company`s coal projects in South
Africa. An update on work in progress and of that planned on each project is set
out below:
Mooiplaats (Ermelo Coalfield)
- Coal of Africa Ltd granted Mining Right for areas of the Mooiplaats project
- Infill drilling program on track with a measured resource of 43 million
tonnes defined in the upper B seam
- Company expected to shortly announce the completion of its 70 per cent
interest in CoAL
- Discussions continue with potential off-takers for the Mooiplaats project
The Company has been advised by Coal of Africa Ltd ("CoAL"), that CoAL has been
granted a Mining Right in terms of Section 23 of the Mineral and Petroleum
Resources Development Act (MPRDA), 2002 (Act 28 of 2002) on Portion 1+9 on the
farm Mooiplaats 290 IT, (an area of 940 hectares).
This is a significant development for the project and the only conditions
precedent remaining for completion of the Company`s acquisition of a 70 percent
interest in CoAL is Ministerial Consent under S.11 of its MPRDA and Competition
Commission consent. These are expected to be granted shortly.
The drilling program continues with 13 rigs on site which have now completed
over 46,000 metres and some 330 holes. An inferred resource of 240 million
tonnes over the two main coal seams has been delineated within an area of some
7000 Ha. 16000 Ha of the property remain to be drilled.
The infill drilling program (using 350 metre hole centres), which is still in
progress, has defined a measured resource (at the time of writing) of 43 million
tonnes in the B upper seam comprising of 5.3Mt of anthracitic coal
(metallurgical coal), 14.3 Mt of lean coal (which has volatile content of
between 10% and 20%) and 23.0 Mt of bituminous coal (thermal coal) using a 1.4
metre seam thickness cutoff. SRK consultants have advised that the average coal
qualities (unwashed) from the B upper seam are as follows:
Measured Resources:
Resources Tonnage Calorific Ash* Volatiles* Fixed
Class (Mt) Value* (%) (%) Carbon*
(MJ/kg) (%)
Anthracitic 5.3 23.52 27.76 7.44 60.90
Lean 14.3 24.54 23.13 14.58 58.69
Bituminous 23.0 25.86 17.70 26.86 51.72
*on an air dried basis
It should be noted that these are interim results. Washability tests are in
progress and the results are expected shortly. These results are required before
final product specifications can be determined.
Geological modeling based on the drilling to date is being finalised and mine
planning can now commence.
This in turn will allow the Company to negotiate mining contracts with the
various contractors who have now provided provisional cost estimates.
Concurrently, discussions continue with Eskom and other potential off takers.
There is currently a world wide shortage of both coking and thermal coals with
supply growth falling behind demand. The Company believes that the market
outlook for its coal assets is very good and predicted margins highly
attractive.
The Company believes that it will complete mining contracts and sales agreements
for Mooiplaats before the end of this year and progress is in line to commence
production in the third quarter of 2008.
Holfontein (Witbank Coalfield)
The drilling program at the 100 percent owned Holfontein project has been
completed and a Competent Persons Report delineating a "measured resource" and
product qualities is due for release shortly. Results are expected to be in line
with previous estimates which allow planned sales of 400,000 tpa of soft coking
coal and 800,000 tpa of unwashed thermal coal over a mine life of twenty years.
The Company expects production to commence as planned in the third quarter of
2008 subject to regulatory permitting from the Department of Minerals and
Energy.
Limpopo Coal Project (Thuli Coalfield)
Ludik Core has been appointed as drilling contractor for GVM`s 74 percent owned
Limpopo project and site preparations have commenced. Separate contractors have
been appointed to do geotechnical and geological logging. Drilling is expected
to commence before the end of this month.
East Coast Maritime (Pty) Ltd ("ECM") have been contracted to generate an "order
of magnitude" feasibility study for the rail and port infrastructure required
for both the Limpopo and Baobab projects. The study is approximately 25%
complete and should be finalised by the middle of November. ECM has delivered a
preliminary report and the Company believe the findings are extremely
encouraging both in terms of capacity and timing.
Boabab (Soutpansberg Coalfield)
Geomechanics have been appointed drilling contractor for this 100 per cent.
owned project. A borehole for water and a campsite was completed and drilling
has commenced to revalidate previous work carried out by Iscor to bring the
resources into JORC standard. The same contractors that have been used on the
Limpopo projects for geotechnical and geological logging have been appointed for
Boabab.
Authorised by
SIMON J FARRELL
Managing Director
For more information contact:
Simon Farrell, Managing Director:
GVM +61 417 985 383 or +61 8 9322 6776
Nonkqubela Mazwai, Deputy Managing Director:
GVM: +27 83 690 9079
Petronella Gorrie
The Event Shop:+27 82 827 8815
Leesa Peters / Jos Simson
Conduit PR: +44(0) 20 7429 6606
Olly Cairns / Romil Patel
Blue Oar Securities Plc: +44(0) 20 7448 4400
www.gvm.com.au
Notes:
The information in this report as it relates to the geology, geochemistry and
geophysics, regarding Mooiplaats, has been prepared by Grant van Heerden. Grant
van Heerden has more than five years of experience in estimation, assessment of,
and evaluation of Mineral Resources and Ore Reserves which are relevant to the
style of mineralization under consideration. Grant van Heerden is a Senior Coal
Geologist with SRK Consulting. Grant van Heerden has sufficient experience which
is relevant to the style of mineralisation and type of deposit under
consideration and activities herein reported, to qualify as a Competent Person
as defined in the 2004 edition of the `Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves` and Part two of the AIM
Guidance Notes for Mining, Oil and Gas Companies. Grant van Heerden consents to
the inclusion in this report of such information in the form and context in
which it appears.
10 September 2007
Sponsor
PricewaterhouseCoopers Corporate Finance (Pty) Ltd
Date: 10/09/2007 11:10:02 Produced by the JSE SENS Department.
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