| Wed 18 Jun 2008, 8:53 | | CZA - Coal of Africa Limited - Resource upgrade at Vele Coal Project |
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CZA
CZA
CZA - Coal of Africa Limited - Resource upgrade at Vele Coal Project
Coal of Africa Limited
(previously, "GVM Metals Limited")
(Incorporated and registered in Australia)
(Registration number ABN 008 905 388)
Share code on the JSE Limited: CZA
ISIN AU000000CZA6
Share code on the Australian Stock Exchange Limited: CZA
ISIN AU000000CZA6
(`CoAL` or `the Company`)
18 June 2008
RESOURCE UPGRADE AT VELE COAL PROJECT
Coal of Africa Limited ("CoAL" or "Company"), the AIM/ASX/JSE listed coal
development company operating in South Africa (ticker: CZA), is pleased to
announce an upgraded resource of 441.47 million gross in situ tonnes (up from
352 mt Inferred) at its Vele (formerly Thuli) semi soft coking coal project in
the Limpopo Province of South Africa.
The resource upgrade is the result of a recently completed 65 borehole drilling
program that has been incorporated into an updated three dimensional geological
model. As yet not all of the CoAL borehole sample results have been received
from the accredited South African Bureau of Standards ("SABS") laboratory, but
sufficient information is available to issue this resource estimation update.
The 441.47 million gross in situ tonnes may be summarised and classified as
follows:
Opencast Underground TOTAL Percentage
Measured* 131.92 1.93 133.84 30.32
Indicated* 65.62 10.97 76.58 17.35
Inferred* 83.29 48.19 131.48 29.78
Reconnaissance** 91.12 8.45 99.57 22.55
371.95mt 69.52mt 441.47mt 100%
* As defined in JORC/SAMREC
**As defined in SAMREC (SANS10320 ed 1) at 6.3.3.1:
"A reconnaissance coal resource is quantified as a minimum one cored borehole
with coal quality data per 400 ha (approximately 2km spacing) for multiple seam
deposit types, while for thick interbedded seam deposit types a reconnaissance
coal deposit is quantified by a minimum one cored borehole with coal quality
data per 1,600 ha (approximately 4km spacing)."
At this stage the resource estimation covers approximately 80% of the potential
project area (refer to the note). Further resource upgrades are expected as
drilling continues on the edges of the known resource and further lab analyses
are received.
The Company proposes to now undertake a further drilling program consisting of
65 holes, which should result in over 70% of the resource being classified as
Measured.
Current Borehole Information
The recently completed exploration program of 65 boreholes spaced over the whole
project area, have been geophysically wireline logged, and visual logging and
correlation has taken place. This has resulted in the subdivision of two of the
coal horizons into upper and lower plies. In addition, detailed sampling has
taken place on a lithological basis to further facilitate the identification of
potential selective mining horizons. In addition to the drilling, a detailed
airborne magnetic survey of the project area has been completed and the
preliminary interpretation of the results has been completed. A detailed
interpretation is currently being done by the highly respected geophysicist Mr
Geoff Campbell.
The current exploration samples have been analysed at the SABS laboratory and
all samples have undergone float and sink analyses to 7 fractions all crushed to
-25mm and full Proximate, Calorific value, Sulphur and Phosphorus analyses. The
samples are currently undergoing free swelling and Roga index analyses. In
addition, composites of the samples for the expected mining horizons are
currently scheduled for full Ultimate, Ash composition, Petrographic, and coking
coal tests including dilatation, Gieseler fluidity, and Gray - King.
Coal Qualities
The coal quality estimation for a primary product of an expected semi soft
coking coal at 12% Ash (air dried) with a swell expected to be in the order of
5.5 and a Roga of 70, has a theoretical yield of 21.37%, with weight averaged
Sulphur of 1.03% and Phosphorus of 0.013%. The middlings product of a Local
thermal coal at a 35% ash has Calorific values (air dried) of 21.02 GJ per
tonne, and volatile matter contents of 26.52%. The yield of this product is
expected to be 42.30%. It is expected however that the analysis of the
outstanding boreholes and the bulk sample drilling program that is currently
taking place should result in improvement of overall yields. It should also be
noted that additional drilling is taking place to increase the geological
confidence.
Mine Planning and Life of Mine Scheduling
The Vele Project geological model has been given to MRM (Pty) Ltd, a wholly
owned subsidiary of Runge Mining of Brisbane Australia, to do the mine design
and Life of Mine scheduling. This process has progressed well with the design
phase completed and it is expected that a scoping study level schedule and
operating cost estimation should be completed within the next two months.
Currently the open cast project has an average strip ration of 4.04:1 with the
cut off between open cast and underground being set at 7:1.
Other Project Status
CoAL`s hard coking project, Makhado (formerly Baobab), is currently undergoing a
similar evaluation to that applied to the Vele Project and a detailed resource
estimation is expected in the next two months. This should also result in a
significant resource upgrade.
The Company also confirms that its Mooiplaats Thermal Coal Project continues to
progress in line with expectations and an update announcement on this project
will be made in July.
Yours sincerely,
SIMON J FARRELL
Managing Director
For more information contact:
Simon Farrell, Managing Director
CZA
+61 417 985 383 or +61 8 9322 6776
Petronella Gorrie
The Event Shop
+27 82 827 8815
Jos Simson/ Leesa Peters
Conduit PR
+44(0) 20 7429 6603
Olly Cairns / Romil Patel
Blue Oar Securities Plc
+61 8 6430 1631/ +44(0) 20 7448 4400
Note:
Refer to the ASX and Company websites for the following:
* Maps of Borehole localities, Resource estimation area and Karoo sequence
extent;
About CoAL:
Coal of Africa Limited ("CoAL") is primarily focused on the acquisition,
exploration and development of thermal and metallurgical coal projects. The
Company`s key projects, along with its leading metals processing company NiMag
Group (Pty) Ltd are in South Africa. The Company was incorporated in Western
Australia and listed in 1980. Since 2005, the Company has also listed on both
the AIM and JSE markets, allowing further growth in the Company`s coal assets.
Resource Estimation
The information in this announcement that relates to exploration results is
based on information compiled by Mr John Sparrow (Member of the South African
Council of Natural Scientific Professions SACNASP) 400109/03 an independent
geological and technical consultant with 26 years experience in the Southern
African and Australian regions. Mr Sparrow has compiled a number of competent
person`s reports for various organizations for the JSE, ASX, and TSE.
Mr Sparrow has sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to the activity which
he is undertaking 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`. Mr Sparrow has reviewed the information contained
within this announcement and consents to the inclusion in this announcement of
the matters based on his information in the form and context in which it
appears.
Sponsor
PricewaterhouseCoopers Corporate Finance (Pty) Ltd
Date: 18/06/2008 08:53:40 Produced by the JSE SENS Department.
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