| Tue 14 Jul 2009, 11:54 | | MMH - Miranda Mineral Holdings Limited - Miranda coal update |
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MMH
MMH
MMH - Miranda Mineral Holdings Limited - Miranda coal update
MIRANDA MINERAL HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/001940/06)
Share code: MMH
ISIN: ZAE000074019
("Miranda" or "the company" or "the group")
Miranda Coal Update
- Uithoek EIA submitted
- Prospective area in KZN increased to 61,300 hectares
1. Sesikhona Kliprand Colliery ("Sesikhona")
Miranda Coal is making good progress in preparing to move into production at
Sesikhona. Negotiations on the marketing of the coal as well as with mining
contractors are at a sensitive stage. The board will make a further detailed
announcement as soon as arrangements have been finalised, which is expected to
be before the end of July.
2. Uithoek project
As reported in the interim financial results on 7 April 2009, a mining right
application was submitted and accepted by the Department of Minerals and Energy
("DME") for the group`s Uithoek project. Situated in the Glencoe district within
the Klip River coalfields, Uithoek has a measured resource of 6.7 million tons
("mt") in situ, of which 4.1mt is minable by open pit. The Environmental Impact
Assessment ("EIA") has now been completed and will be submitted to the DME by
mid-July. The EIA represents an important step in the process of obtaining the
Mining Right. The board anticipates that DME approval of the Mining Right
application should take place before the end of 2009.
3. New coal prospecting rights acquired
Miranda Coal has made significant advances in further increasing its coal
footprint in KwaZulu Natal ("KZN"). The group`s prospective area has been
increased to more than 61,300 hectares, of which 24,000ha is already under
either Prospecting or Mining Right. Applications for Prospecting Rights have
been accepted by the DME on properties covering a further 12,600ha. New projects
acquired by Miranda include:
3.1 Dwalalamadwala Mining Resources (Pty) Ltd ("DMR")
DMR was awarded a Prospecting Right in the magisterial district of Dannhauser in
KZN over an area of 1,337ha. Miranda has entered into heads of agreement with
DMR in terms of which it will obtain a 65% stake in a NewCoalCo, which will
house the DMR Prospecting Right, at a nominal cost. The DMR prospecting area is
contiguous with Miranda Coal`s existing Sesikhona Colliery project, extending it
in a western direction. Sesikhona`s existing mining license covers 864ha.
Sesikhona and the DMR prospecting areas are situated in the centre of the Klip
River coalfield, which is considered to be the most important coalfield in KZN
with a history of good coking coal and anthracite production. The old Cambrian
Coal Mine, which was in operation between 1903 and 1958, produced over 10mt of
saleable coal and lies to the north of the DMR prospecting area. To the west is
situated Durban Navigation Collieries (Durnacol), which started production of
coking coal in 1903, employed some 5,000 people at the height of its activities,
and was closed in 2000. Sesikhona itself boasts a total resource of 22mt of
which 5.4mt is measured in terms of SAMREC. The phase one mining plan is based
solely on the open-cast section, estimated at about 40% of the resource.
Current indications are that the DMR prospecting area presents a continuation of
the coal horizon to be mined at Sesikhona. This is based on results derived from
a total of 10 non-discriminatory holes that were drilled in the past on Goede
Geloof 8703, one of the farms in the DMR prospecting area. Both the top and
bottom seams were intersected at depths and seam widths suitable for potential
opencast mining, particularly during the crucial initial phases of development.
The depths at which coal was intersected and the seam widths of some of the
boreholes are indicated below (taken from Geological Survey information, which
is not SAMREC-compliant):
Seam Width Seam depth
* Top Seam:
1.32m 18.9m
0.78m 17.3m
2.03m 19.4m
1.37m 34.9m
1.93m 20.7m
* Bottom Seam:
1.88m 20.3m
0.63m 19.1m
1.17m 36.8m
Miranda Coal is embarking on a drilling program in the DMR prospecting area
using both percussion and core drilling techniques, including wire-line logging
of the boreholes, to confirm the continuation of the coal seams throughout the
properties.
The group`s exploration program in the Klip River coalfields remains on track.
The in-fill drilling program at Sesikhona is on schedule and initial drilling
has commenced at Majestic Silver (refer to the SENS announcement dated 5 March
2009). Further announcements of these results will be made in due course.
3.2 Utrecht coalfields properties
The seams in the Utrecht coalfields have historically been a major source of
moderately good coking coal and typically require relatively little
beneficiation. Miranda Coal`s involvement in the development of the Utrecht
coalfields is currently through the following two vehicles:
* Alston project
Miranda Coal has secured a 70% shareholding in Juxtox (Pty) Ltd, whose
application for a Prospecting Right over the farms Alston 10373 and Paardeberg
1068 has been accepted by the DME. This acquisition was at nominal cost. The
prospecting area covers 3,070ha in the Utrecht district. The Environmental
Management Program ("EMP") has been completed and submitted to the DME.
Geologically, on Paardeberg 1068 the displacement of the dolerite has caused an
uplift of the coal seams of 46m to 61m. Evidence from an outcrop of the Top Seam
on the same farm and a borehole on a neighbouring farm indicate a seam thickness
of 1.27m (source: Geological Survey).
* Planet Waves
Planet Waves 522 (Pty) Ltd has applied for five separate Prospecting Rights on
the farms Frischgewaagd 17076, Uitzicht 284, Witklip 98, Altemooi 17091 and
Twijfelfontein 160. Miranda Coal acquired a 70% interest in Planet Waves for a
nominal investment, the five properties also being situated in the Utrecht
district and covering an area of over 9,500ha. The DME has accepted all five the
Prospecting Right applications and Miranda Coal is presently engaged in
completing the EMPs.
Geological Survey data indicates a seam thickness of 1.2m on the farm Witklip
98. Historically, the Umgala and Balgray Collieries, whose mining leases
included different portions of the farm Twijfelfontein 160, used to operate in
the area, both collieries having commenced with production in 1967. Using the
bord-and-pillar mining system, the collieries produced 80,000 and 17,000
saleable tons per month, respectively.
4. Conclusion
Miranda Coal is now more strongly than ever positioned to achieve critical mass
in KZN, which makes the upgrade of the three train sidings it has under long-
term lease, economically viable. By extending and securing its coking coal and
anthracite pipeline, Miranda Coal will also be better placed when negotiating
off-take and forward sale agreements.
Centurion
14 July 2009
Sponsor
PricewaterhouseCoopers Corporate Finance (Pty) Ltd
Corporate adviser
Touchstone Capital (Pty) Ltd
Date: 14/07/2009 11:54:01 Produced by the JSE SENS Department.
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