| Tue 22 Jul 2008, 9:00 | | CZA - Coal of Africa Limited - Resource upgrade Makhado Project |
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CZA
CZA
CZA - Coal of Africa Limited - Resource upgrade Makhado 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`)
22 July 2008
RESOURCE UPGRADE MAKHADO 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 1.335 billion gross in situ tonnes (up from 713
mt) at its Makhado (formerly Baobab) coking coal project in the Limpopo Province
of South Africa.
The resource upgrade follows further analysis of the borehole data acquired from
Exxaro Resources Limited and boreholes completed by CoAL, which have been
incorporated into the 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 1.335 billion gross in situ tonnes covered by this resource upgrade are
situated on six farms representing approximately 40% of the total Makhado
Project area. A further resource upgrade is expected before year end following
analysis of data covering farms in the remaining 60% of the Project area.
The updated resource is summarised and classified as follows:
IN SITU Rel Tonnes Opencast Rel
Resource % Million Tonnes %
Million Metric
Metric Tonnes
Tonnes
Measured 230.067 17.233% 208.364 37.847%
Indicated 548.642 41.095% 201.797 36.690%
Inferred 250.690 18.777% 25.445 4.613%
Reconnaissance* 305.660 22.895% 114.771 20.853%
1,335.06 100.00% 550.377 100.00%
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)."
Current Borehole Information
The exploration data consists of 402 boreholes. Visual logging and correlation
analysis has been completed resulting in the subdivision of the thick
interbedded carbonaceous horizon into five distinct "Seams" of coal rich
horizons. Detailed sampling has taken place on lithological and correlatable
horizons which further facilitates the identification of potential selective
mining horizons. In addition to the drilling data and geological studies
referred to above, a detailed airborne magnetic survey has been undertaken 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.
Coal Qualities
An estimate of the expected coal quality of the Makhado Project has been
undertaken. The primary product is estimated to be coking coal at 12% Ash (air
dried), swell >8.0, and a weight averaged Sulphur content of 0.97%. A
theoretical yield of approximately 19.9% is expected for this product. The
Project is also estimated to yield a middlings product, suitable for use as
local thermal coal, with ey qualities being 35% ash, calorific value (air dried)
of 21 GJ per tonne, and volatile matter content of 21.50%. The yield of this
product is expected to be approximately 33 - 34%.
The current exploration samples have been analysed at the SABS laboratory and
all samples have undergone float and sink analyses to 11 fractions all crushed
to -25mm and full Proximate, Calorific value, Sulphur, free swelling index and
Roga index analyses. Additional drilling is currently underway that will provide
additional quality information to further refine these estimates. Composite
samples from the expected mining horizons are currently scheduled for full
Ultimate, Ash composition, Petrographic, and coking coal tests including
dilatation, Gieseler fluidity, and Gray - King.
Mine Planning and Life of Mine Scheduling.
The Makhado 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 month.
Mr Simon Farrell, Managing Director of Coal of Africa, commented "This resource
upgrade is excellent news for the Company and a significant milestone in the
development of the Makhado Project. The upgrade confirms our view that the
Makhado Project is capable of becoming a very substantial long life producer of
high quality hard coking coal. There is substantial global demand for a product
of this type and we expect this project to become our primary focus as we take
the Company forward."
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
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 resource estimation has been 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 sufficient experience
relevant to the assessment of this style of mineralization to qualify as a
Competent Person as defined in the Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves - the JORC Code - and
has compiled a number of Competent Person`s reports for various organizations
for the JSE, ASX, and TSE. Mr Sparrow consents to the inclusion of the
information in this report in the form and context in which it appears.
Glossary of terms:
Air dried - Sufficiently dry so that further exposure to air does not yield more
moisture to be evaporated.
Calorific Value - The calorific value of a fuel describes how much heat per unit
of weight it can produce when burnt.
Float and Sink Analysis - Use of a series of heavy liquids diminishing (or
increasing) in density by accurately controlled stages in order to divide a
sample of crushed coal or other minerals or metals into fractions that are
either equal-settling or equal-floating at each stage.
Free Swelling Index (FSI) - A test for measuring the free-swelling properties of
coal; consists of heating 1 gram of pulverized coal in a silica crucible over a
gas flame under prescribed conditions to form a coke button, the size and shape
of which are then compared with a series of standard profiles numbered 1 to 9 in
increasing order of swelling.
Gieseler Fluidity - This test measures the plasticity of the coal and at what
temperature the maximum fluidity is achieved.
Gray-King - An assay technique used to determine the coking properties of coal.
Middlings - A partially refined ore, that is intermediate in quality, size,
price, or grade.
Plies - Lithological subdivisions of a coal seam, each of which has a uniform
character.
Proximate Analysis - A technique that separates and identifies categories of
compounds in a mixture; reported are moisture and ash content, the extracts of
the mixture made with alcohol, petroleum ether, water, hydrochloric acid and
resins, starches, reducing sugars, proteins, fats, esters, free acids, and so
on; this type of analysis of solid fuels allows a prediction to be made as to
how the fuel will behave in a furnace.
Roga Index (RI) - An analysis used to measure the caking and agglomerating
nature (tendency to deform and stick together) of coal. The RI is measured on a
scale of 0 to 90 with 0 being the least sticky in nature. If the coals have
caking and agglomerating properties this could potentially be problematic for
fluidised bed operation since the coal particles will stick together, de-
fluidised and clinkers will be formed in the bed possibly causing
defluidisation.
Resource Categories
Measured Resource: can be estimated with a high level of confidence with the
sample locations spaced closely enough to confirm geological and grade
continuity.
Indicated Resource: can be estimated with a reasonable level of confidence, with
the sample locations spaced too widely apart to confirm geological and/or grade
continuity but are spaced closely enough for continuity to be assumed.
Inferred Resource: can be estimated with a low level of confidence, being
inferred from geological evidence and assumed but nor verified geological and
grade continuity.
Reconnaissance 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).(as defined in SAMREC (SANS10320
ed 1) at 6.3.3.1)
Sponsor
PricewaterhouseCoopers Corporate Finance (Pty) Ltd
Date: 22/07/2008 09:00:01 Produced by the JSE SENS Department.
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