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FSE
FSE
FSE - Firestone Energy Limited - Highlights of Pre-feasibility study completed
for first stage pit on Smitspan Farm
FIRESTONE ENERGY LIMITED
(formerly Centralian Minerals Limited)
(Registration number: ABN 058 436 794)
(SA company registration number: 200/023973/10
Share code on the JSE: FSE
Share code on the ASX: FSE
ISIN: AU000000FSE6
("FSE" or "the Company")
HIGHLIGHTS OF PRE-FEASIBILITY STUDY COMPLETED FOR FIRST STAGE PIT ON SMITSPAN
FARM
Firestone Energy Limited (ASX/JSE Code: FSE) is pleased to announce highlights
from the pre-feasibility study completed recently for the Smitspan property.
Key Points
- 21 year mine life with production up to 7mtpa saleable product.
- Smitspan first stage pit plan dimensions - 4.2km long and up to 1.6km wide
- Average 28m overburden with first stage planned mine depth to 90m.
- Low 2.7:1 waste to saleable product ratio.
- Indicative Capex of A$400m / 14.5% IRR (Tolerances +/- approx 25%).
- BFS work program and parameters refined and approved.
The first stage pit indentified on Smitspan farm has been planned to include an
area of some 4.2km by 1.6km with coal intersected from 28m overburden depth down
to some 90m in the selected seams. The excavation envelope and general layout of
the mining blocks is illustrated in Figure 1 on page 3. The preferred pit
boundary is shown as the red line and the Smitspan boundary (An area in excess
of 11km2) shown as the yellow boundary line.
The resultant minable coal seams (11 to 7) gives an expected 21 year mine life
with production rates ramping up to 7mtpa of beneficiated product comprising
some 80% power station coal and 20% exportable quality metallurgical coal with
attractive low phosphorous properties.
The pit boundary is defined by an attractive waste / ROM ratio of around 1:1
producing a waste / saleable ratio of 2.7:1, enabling low cost open cut mining.
The mine is being planned as a conventional truck and shovel operation retaining
the flexibility to respond to changing circumstances.
Coal extends beyond the pit boundaries in all directions with particular
interest being the agreed addition of the Swanepoelpan farm as announced
yesterday (T3 agreement). The Swanepoelpan property shares a 1.8km boundary with
Smitspan and hosts coal with an expected similar stripping ratio, both of which
should enable substantial pit extensions that are not as yet contemplated in the
results for the pre-feasibility study.
All financial figures derived for the PFS are within a tolerance of around +/-
25% indicating a potential IRR of some 14.5% with indicative initial Capex
estimated to be around A$400m.
The Board approved the final PFS report and also agreed parameters for the next
six months to complete the Bankable Feasibility Study. The additional in-fill
drilling committed to has commenced and should lead to substantially improved
confidence in the projected yields and product qualities from the various zones
of the coal seam.
The Board is very excited about the future of Firestone`s rapidly expanding coal
assets (now exceeding 1.3bn tons * excluding T3), within the Waterberg Coal
region which contains some 50% of South Africa`s remaining coal resources,
making the area increasingly the focus of likely future increased power
generation and possible synthetic fuel production.
The increasing confidence and efforts of Firestone and Sekoko with the Waterberg
coal project has enabled the JV partners to continue to participate fully in
state power utility Eskom`s coal proposal process and to accelerate ongoing
discussions with all interested parties.
Tim Tebeila, (Non-Executive Director of Firestone and Chairman of Sekoko
Resources) stated that, "the size and scale of the Waterberg project as
indicated by the positive results of the PFS, together with the increasing
footprint and opportunity provided by the acquisition of additional, adjoining
properties must put the JV partners clearly amongst the leaders for the
consideration of major off-take partners".
* The total coal resource estimate based on the data available at October 2009
(Venmyn) is tabled below:
FARM ZONE Tonnage Measured Indicated Inferred Total Coal
Mt GTIS Coal GTIS Tonnage GTIS Coal GTIS Tonnage
Tonnage Mt Coal Tonnage
Smitspan 1 901 058 97 152 416 109 106 836 620 097
Hooikraal 358 444 0 7 282 155 491 162 773
Minnasvlakte 705 855 0 26 507 230 687 257 194
Massenberg 337 034 0 20 797 109 687 130 336
Vetleegte 449 673 0 28 873 131 303 160 176
Total 3 802 014 97 152 499 568 733 856 1 330 576
Information in this report that relates to exploration results and coal
resources on the properties Smitspan 306LQ, Hooikraal 315LQ, Minnasvlakte 258LQ
and Massenberg 305LQ and Vetleegte 304LQ is based on information compiled by Ms
Catherine Teller who is employed by Venmyn Rand (Pty)Ltd and is a member of The
Australian Institute of Mining and Metallurgy and the South African Institute of
Mining and Metallurgy. Ms Telfer has sufficient experience which is relevant to
the style of mineralisation and type of deposit under consideration and to the
activity which she is undertaking to qualify as a Competent Person as defined in
the SAMREC and JORC Codes. Ms Telfer consents to the inclusion in the report of
the matters based on her information in the form and context in which it
appears.
For further information please contact:
John Wallington
Managing Director
Telephone: +61 8 9381 2755
Pretoria
3 February 2010
Corporate Adviser and Sponsor
River Group
Date: 03/02/2010 07:27:58 Produced by the JSE SENS Department.
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