| Mon 13 Sep 2010, 9:24 | | CZA - Coal of Africa Limited - Rio Tinto Farm Swap approval received for Makhado |
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CZA
CZA
CZA - Coal of Africa Limited - Rio Tinto Farm Swap approval received for Makhado
Coking Coal Project
Coal of Africa Limited
(previously, "GVM Metals Limited")
(Incorporated and registered in Australia)
(Registration number ABN 008 905 388)
JSE Share code: CZA
ASX Share code: CZA
ISIN AU000000CZA6
("CoAL" or "the Company")
RIO TINTO FARM SWAP APPROVAL RECEIVED FOR MAKHADO COKING COAL PROJECT
- Section 102 for Rio Tinto farm swap approved by Department of Mineral
Resources.
- Approval permits CoAL to lodge the New Order Mining Right application for its
Makhado coking coal project.
- Agreement extends the Makhado project and creates an additional three
significant coal projects, significantly enlarging CoAL`s coking coal portfolio.
Coal of Africa Limited ("CoAL" or "the Company") is pleased to advise it has now
received confirmation from the South African Department of Mineral Resources
("DMR") that the application for Ministerial consent in terms of section 102 of
the South African Minerals and Petroleum Resources Development Act, 2002
("MPRD") to affect the Exchange of Prospecting Rights Agreement ("Rio Farm Swap
Agreement") with Kwezi Mining and Exploration (Proprietary) Limited ("Kwezi")
and Chapudi Coal (Proprietary) Limited ("Chapudi"), joint venture companies held
by the Rio Tinto Group and the Kwezi Group of South Africa, as announced on 29
October 2009, has been granted.
This rationalisation of the farms owned by Chapudi, Kwezi and CoAL provides
significant benefits to all parties in terms of creating numerous contiguous,
well defined and economic coal projects.
Importantly, the approval of the Rio Farm Swap Agreement allows CoAL to lodge a
New Order Mining Right ("NOMR") application for the Company`s flagship Makhado
Coking Coal Project ("Makhado"). In this regard, it is anticipated that the
NOMR application will be lodged before the end of the calendar year, followed
closely by an application for an Integrated Water Use Licence ("IWUL") and
further relevant approvals, as required.
Furthermore, as can be seen from the map, viewable at the Company`s website
www.coalofafrica.com, the Rio Farm Swap Agreement creates another three
significant coal projects around Makhado, namely the Mount Stuart Coking Coal
Project, The Voorburg Coking Coal Project and the Jutland Coking Coal Project,
together with an additional two farms which will form a natural extension to
Makhado.
Commenting today, John Wallington, Chief Executive Officer of CoAL, said: "The
farm swap between Rio Tinto and CoAL allows both companies to create larger
contiguous and economic coal projects. The approval for section 102 now permits
us to lodge the NOMR application for Makhado, which we plan to lodge before year
end. In addition we have gained three new coking coal projects Mount Stuart,
Voorburg and the Jutland Project which were extensively explored by Iscor in the
1980`s. We are currently validating the data that has the potential to
significantly increase our coking coal portfolio. "
Mount Stuart Coking Coal Project
This project comprises the farms Mount Stuart, Ter Blanche, Septimus,
Schuitdrift, Riet, Stayt and Nakab.
The project area was subject to an intensive drilling program by Iscor in the
early 1980`s with some 318 boreholes drilled on the three farms, Mount Stuart,
Ter Blanche and Septimus; and 13 boreholes on the remaining farms. The
historical borehole information is currently undergoing a validation process
with the information having been sourced from the South African Council for
Geoscience. This compares to the 351 boreholes that were drilled by Iscor on the
seven Makhado farms, including the two farm extension to the east.
The historical data indicates that there is a substantial area of open castable
coal with a general dip at less than 8? to the North, North-West and of a size
and quality similar to that at Makhado. Interestingly, the yields of coking coal
appear to be significantly higher than those at Makhado, thereby providing an
exciting opportunity to create a meaningful addition to CoAL`s coking coal
portfolio. The Company intends on undertaking an extensive drilling program in
order to validate the historical borehole information and in the process,
generate a JORC/SAMREC compliant resource.
Voorburg Coking Coal Project
The project comprises the farms Voorburg, Cavan and Ancaster. The area has 44
historical boreholes drilled by Iscor in the early 1980`s. CoAL has drilled 10
additional boreholes on the farm Voorburg to validate some of the older
boreholes and to confirm the coal horizon correlations with success. The coal
dips to the North, North-West at approximately 4?. An internal Iscor report
suggests a non JORC compliant in-situ mineable resource on Voorburg in excess of
400Mt with a low yielding coking coal fraction. The old Fuel Research Institute
performed detailed work on the coal in 1942, on the old Lilliput mine shaft
(established 1910) on the farm Cavan. The conclusions indicated that "The very
strongly developed coking propensity is an outstanding characteristic of this
coal". CoAL is currently having the 10 boreholes analysed with a view to
providing a JORC/SAMREC complaint resource in due course.
Jutland Coking Coal Project
The project comprises the farms Jutland, Cohen, Stubbs and Mons, this area was
also drilled by Iscor in the early 1980`s and was the subject of a detailed
internal pre-feasibility study. Some 80 boreholes were drilled in the area and
this historical borehole information is currently being sourced from the South
African Council for Geoscience. The internal report studied different mining
methods and targeted the Middle Lower and Bottom Upper Coal Seams. The coal dips
to the North, North-West at 5? and suggested reasonable yields from the two
seams and a potential life span of greater than 20 years. As with the Mount
Stuart and Voorburg Coking Coal Projects, CoAL intends to formulate a drilling
program aimed at both validating the historical borehole information and
defining a JORC/SAMREC compliant resource.
Please refer to the map, viewable at the Company`s website www.coalofafrica.com
, which outlines CoAL`s holding in the Soutpansberg following the execution of
the aforementioned rights resulting from the Ministerial approval of the section
102 application
JOHN WALLINGTON
Chief Executive Officer
13 September 2010
JSE Sponsor
Macquarie First South Advisers (Pty) Limited
Contacts:
CoAL Tel: +27 (0) 11 575 4363
John Wallington
Blair Sergeant
Evolution Securities Tel: +44 (0) 20 7071 4300
Simon Edwards
Chris Sim
Conduit PR Tel: +44 (0) 20 7429 6603
Jos Simson
Leesa Peters
Macquarie First South Advisers Tel: +27 (0) 11 583 2000
Melanie de Nysschen
Annerie Britz
www.coalofafrica.com
About CoAL
CoAL is an AIM/ASX/JSE listed coal mining and development company operating in
South Africa. CoAL`s key projects include the Woestalleen Colliery, the
Mooiplaats thermal coal mine, the Vele coking coal project and the Makhado
coking coal project.
The Mooiplaats coal mine commenced production in 2008 and is currently ramping
up to produce 2 million tonnes per annum ("Mtpa"). CoAL`s Makhado coking coal
project is expected to start production in 2012 and timing for Vele to reach
production is still to be confirmed. These operations are targeted to
collectively produce an initial 2 Mtpa ramping up to a combined annual output of
10 Mtpa of coking coal.
In 2010, CoAL completed the ZAR467m acquisition of NuCoal Mining (Pty) Limited
("NuCoal"), a thermal coal producer with assets in South Africa in close
proximity to CoAL`s Mooiplaats mine. NuCoal owns the Woestalleen Colliery, which
has a number of off-take contracts in place and processes approximately 2.5Mtpa
of saleable coal for domestic and export markets. NuCoal also owns two
beneficiation plants, one fully operational mine producing approximately 300kt
per month of ROM coal and has recently commenced production at a second mine.
CoAL currently has 1 Mtpa export capacity at the Matola Terminal in Maputo,
Mozambique, increasing to 3 Mtpa on completion of the next phase of expansion at
the terminal. CoAL also has the option to participate in further expansion at
the Matola Terminal, which is expected to increase the capacity at the terminal
by an additional 10 Mtpa
Date: 13/09/2010 09:24:01 Produced by the JSE SENS Department.
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