TIDMCZA
RNS Number : 7538R
Coal of Africa Limited
26 September 2017
ANNOUNCEMENT 26 September 2017
UITKOMST RESOURCES & RESERVES UPDATE
Coal of Africa Limited ("CoAL" or "the Company") is pleased to
announce the Summary of Technical Review 2017 (the "Report") for
the Uitkomst Colliery ("Uitkomst" or the "Colliery") prepared by
Minxcon (Pty) Ltd, an independent mining industry consulting firm.
The Report details Uitkomst's Resources and Reserves as at 28
February 2017. The Company acquired 91% of the shares and claims in
Uitkomst for R275 million (US$20.5 million) on 30 June 2017 with
the remaining 9% held by broad-based trusts, including employees
and communities.
Background
The operational underground Uitkomst Colliery is located
approximately 20km northwest of town of Utrecht in the Kwazulu
Natal province, South Africa. Uitkomst is accessible from a well
maintained road network and is 27km from the leased Wykom rail
siding from where coal is railed to the Richards Bay Coal Terminal.
The Colliery comprises a South Adit (horizontal shaft) using
traditional bord-and-pillar mining methods, as well as a planned
life-of-mine ("LoM") extension to the north on the adjacent
Klipspruit Mining Area ("North Adit").
The Colliery has the required environmental and social permits
in place as well as a valid Integrated Water Use Licence ("IWUL")
and has applied for an amendment of its IWUL to include the North
Adit. Uitkomst has secured long term access to the surface rights
required for the Colliery and will utilise the South Adit surface
infrastructure and processing plant for the washing of run of mine
("RoM") coal from the North Adit.
The South Adit generates an average of 45,000 tonnes ("t") of
RoM coal per month from two underground sections, supplying the
owner-operated processing plant. This coal yields approximately
30,000t of saleable coal and Uitkomst also purchases RoM coal from
collieries situated in the surrounding area to utilise surplus
processing plant capacity.
Uitkomst is a high grade export quality thermal coal deposit
with metallurgical applications and currently sells sized coal
products namely, export coal (0 to 40mm) as well as peas (10 to
25mm). The products sold by the Colliery have a typical calorific
value of 28 MJ/kg, 12% ash and sulphur levels below 1%.
Salient Features
The Report details the Colliery's Resources and Reserves granted
under the New Order Mining Right ("NOMR") covering 11,137 hectares,
expiring in October 2023. An application will be submitted to the
Department of Mineral Resources to extend the NOMR, aligning it
with the Colliery's remaining 17 years LoM.
The tables below are an extract from the Report and reflect the
Resources and Reserves as at 28 February 2017.
Table 1: Uitkomst Resources
and Reserves
Gross Mineable CoAL attributable CoAL attributable
tonnes tonnes interest MTIS Resource
in situ in situ
Mt Mt % Mt
Measured 17.7 15.0 91 13.7
Indicated 4.9 4.3 91 3.9
Inferred 4.3 4.0 91 3.6
26.9 23.3 21.2
--------------- ------------ ----------- ----------------------- ------------------
1. Mt denotes tonnes millions.
2. Mined-out areas have been depleted.
Table 2: Uitkomst
Mineral Reserves
Raw RoM coal qualities
Tonnes Yield Ash Calorific Total
Value Sulphur
Mt % % MJ/kg %
RoM coal
Reserve
Proven 6.6 65.1 29.73 22.72 1.55
Probable 1.8 64.2 31.37 22.05 1.58
Total 8.4 64.9 30.09 22.58 1.56
Saleable coal Reserve
Proven 4.2 12.00 28.91 0.93
Probable 1.2 11.99 28.92 0.95
Total 5.4 12.00 28.91 0.94
---------- ------- ------ ------ ---------- ---------
1. Cut-offs are applied to a minimum of 1.2 metre seam width,
minimum of 25 metres below surface and a minimum of 20% volatile
material.
2. Mt denotes tonnes millions.
3. Mined-out areas have been depleted.
4. Geological loss applied to tonnes was - Measured at 10%,
Indicated at 15% and Inferred at 20%.
Operations post the Report
-- A total of 369,895t of RoM coal was mined at Uitkomst between
1 March 2017 and 31 August 2017.
-- The Company benefitted from R60 million (US$4.6 million) in
positive working capital as at acquisition date, namely 30 June
2017, resulting in positive cash flows as this is realised.
David Brown, Chief Executive Officer of CoAL, commented:
"The addition of Uitkomst is a critical requirement for the
Company at this stage in its life cycle. The Colliery provides CoAL
with a cash generating asset that will assist in the funding of the
business while the Makhado Project is being developed, covering a
significant portion of the Company's overhead costs. The high grade
metallurgical coal products sold by the Uitkomst Colliery
facilitates access to these markets, providing further insight
while the hard coking coal marketing strategy for the Makhado
Project is being finalised."
For more information contact:
Chief Executive +27 10 003
David Brown Officer Coal of Africa 8000
Chief Financial +27 10 003
De Wet Schutte Officer Coal of Africa 8000
+27 10 003
Stephen Rowse Business Executive Coal of Africa 8000
Endeavour Corporate +61 08 9316
Tony Bevan Company Secretary Services 9100
Company advisors:
Matthew Armitt/Ross Nominated Adviser Peel Hunt +44 20
Allister and Broker LLP 7418 8900
Jos Simson/Emily Financial PR +44 20
Fenton (United Kingdom) Tavistock 7920 3150
Charmane Russell/Olwen Financial PR Russell & +27 11
Auret (South Africa) Associates 880 3924
or
+27 82
372 5816
Investec Bank Limited is the nominated JSE Sponsor
About CoAL:
CoAL is an AIM/ASX/JSE listed coal exploration, development and
mining company operating in South Africa. CoAL's key projects
include the Uitkomst Colliery, Makhado Project (coking and thermal
coal), Vele Colliery (coking and thermal coal) and the Greater
Soutpansberg Project (MbeuYashu).
This announcement is inside information for the purposes of
article 7 of EU Regulation 596/2014.
The Uitkomst Resource and Reserve is reported in accordance with
the 2012 Edition of the Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves (JORC Code)
and therefor compliant with the Committee for the Mineral Reserves
International Reporting Standards (CRIRSCO) of November 2013, which
is a requirement due to the fact that CoAL has its primary listing
on Australian Stock exchange (ASX: CZA:AU) with secondary listings
on the London Stock Exchange's AIM market (AIM: CZA:LN) and
Johannesburg Stock Exchange (JSE: CZA:SJ). Under the auspices of
CRIRSCO the reporting is required to be compliant to the relevant
National Reporting Organisations (NROs) and are required to be
founded on the Central Principles of Transparency, Materiality and
Competence and are provided on an "If not, why not" basis.
The lead Competent Person responsible for the declaration of the
Uitkomst Resources and Coal Reserves as presented in this
announcement is Mr Daniel (Daan) van Heerden (Director, Minxcon): B
Eng (Min.), MCom (Bus. Admin.), MMC, Pr.Eng. (Reg. No. 20050318),
FSAIMM (Reg. No.37309), AMMSA.
Mr van Heerden has worked in the mining industry for over 30
years. He has a vast amount of experience in managing underground
and open cast mining operations in South Africa and abroad for
world-class mining majors and junior mining companies. He was
responsible for new business development for two major mining
companies and has experience in mining mergers and acquisitions. He
is currently heading the Mining Engineering division of Minxcon,
where he is integrally involved in activities such as valuation,
due diligence, finance structuring, change management required post
the event, feasibility studies, life of mine plans, technical
reviews and writing of technical reports for various
commodities.
Mr van Heerden is independent of Uitkomst Colliery (Pty) Ltd,
its directors, senior management and advisors.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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