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Coffey Mining (SA) Pty Ltd (2006/030152/079) VAT Number (415 023 9327)
Block D, Somerset Office Estate, 604 Kudu Street, Allen’s Nek 1737 Roodepoort, South Africa www.coffey.com/mining
Kangala (ELOF) Coal Project
Independent Competent Persons Report
Prepared by Coffey Mining (South Africa)
on behalf of:
Universal Coal Plc
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Author(s):
Alan Goldschmidt Senior Consultant - Resources
BSc(Hons),GDE (Mining),( Pr.Sci.Nat.)
David van Wyk Associate Consultant BSc (Geol), (FGSSA,
MGSSA, Pr.Sci.Nat)
Ken LombergRegional Manager –
Southern Africa
BSc (Hons), (MGSSA,
Pr.Sci.Nat.)
Kees DekkerSenior Consultant -
Resources
Bsc (Hons), MBA,
(MGSSA, Pr. Sci.Nat)
Date: 31 May 2010
Project Number: JUNI06
Copies: Universal Coal Plc (2)
Coffey Mining –
Johannesburg
(1)
Document Review and Sign Off
Alan Goldschmidt Author
Ken Lomberg Supervising Principle
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GeoCoal Services
Fax/Telephone 046 624 4791 Cell 082 852 6522 Postal address P. O. Box 1026 Port Alfred 6170
Residential address: 26 Croyden Circle Port Alfred E-mail dawie@geocoal.co.za
KANGALA (ELOF) COAL PROJECT Independent Competent Person’s Report
I David van Wyk (ID number 4806125084083) consent to the inclusion of the resource statements
generated by myself as an associate of Coffee Mining. This includes a document review and the
inclusion of all plans and data generated by myself contained in the updated CPR of the Kangala Coal
Project.
David van Wyk BSc (Geol), (Pr.Sci.Nat. FGGSA MGSSA)
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Table of Contents –
EXECUTIVE SUMMARY ........................................................................................................................ i!
1! Introduction................................................................................................................................. 1!
1.1! Scope of Work .................................................................................................................. 1!
1.2! Participants....................................................................................................................... 2!
1.3! JORC and SAMREC Codes ............................................................................................... 3!
1.4! Site Visits and Data Reviewed ............................................................................................ 4!
1.5! Property Description .......................................................................................................... 5!
1.5.1! Location ................................................................................................................... 5!
1.5.2! Physiography and Infrastructure .................................................................................. 6!
1.6! The South African Coal Mining Industry ............................................................................. 9!
1.6.1! Production ................................................................................................................ 9!
1.6.2! Demand .................................................................................................................. 10!
1.7! Mineral and Surface Rights and Approvals Critical to Project .............................................. 13!
1.8! Permitting ...................................................................................................................... 14!
1.9! Disclaimer ...................................................................................................................... 14!
2! Geology ..................................................................................................................................... 15!
2.1! Regional Geology ........................................................................................................... 15!
2.2! Local Geology ................................................................................................................ 16!
3! Exploration ................................................................................................................................ 17!
3.1! Exploration History ......................................................................................................... 17!
3.1.1! Drilling Density....................................................................................................... 18!
3.1.2! Data Location, Digital Terrain Model and Topographic Control ................................... 21!
3.1.3! Drill Core Logging .................................................................................................. 21!
3.1.4! Sampling, Analytical Procedures and Checks ............................................................. 21!
3.2! Planned Exploration Programmes ..................................................................................... 22!
4! WOLVENFONTEIN Coal Resources ......................................................................................... 24!
4.1! Sample Data Assumptions for Modelling Purposes ............................................................. 24!
4.2! Methodology .................................................................................................................. 24!
4.2.1! Data Verification ..................................................................................................... 24!
4.2.2! Borehole summary................................................................................................... 25!
4.2.3! Geological modelling ............................................................................................... 28!
4.2.4! Coal Resource Estimation ........................................................................................ 31!
4.3! Gross and Mineable In-situ Resources and Raw Qualities .................................................... 33!
4.4! Physical Seam Characteristics........................................................................................... 37!
4.5! Coal Quality and Products ................................................................................................ 38!
5! MIDDELBULT AND MODDERFONTEIN Coal Resources........................................................ 45!
5.1! Sample Data Assumptions for Modelling Purposes ............................................................. 45!
5.2! Methodology .................................................................................................................. 45!
5.2.1! Data Verification ..................................................................................................... 45!
5.2.2! Geological Modelling .............................................................................................. 46!
5.2.3! Coal Resource Estimation ........................................................................................ 46!
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5.3! Gross In-situ Coal Resource Volumes and Raw Qualities .................................................... 46!
5.3.1! Middelbult .............................................................................................................. 46!
5.3.2! Modderfontein ........................................................................................................ 52!
5.4! Gross In-situ Resources ................................................................................................... 53!
5.4.1! Relative Density ...................................................................................................... 53!
5.4.2! Statement of Gross In-situ Resources ........................................................................ 53!
5.5! Mineable In-situ Resources .............................................................................................. 54!
5.5.1! Minimum Mining Parameters ................................................................................... 54!
5.5.2! Geological Loss....................................................................................................... 56!
5.5.3! Geotechnical Considerations..................................................................................... 57!
5.5.4! Summary of Assumptions Underlying the Mineable Coal Resource Estimation ............. 57!
5.5.5! Mineable Coal Resource Statement and Classification ................................................ 57!
EXECUTIVE SUMMARY ........................................................................................................................ i!
1! Introduction................................................................................................................................. 1!
1.1! Scope of Work .................................................................................................................. 1!
1.2! Participants....................................................................................................................... 2!
1.3! JORC and SAMREC Codes ............................................................................................... 3!
1.4! Site Visits and Data Reviewed ............................................................................................ 4!
1.5! Property Description .......................................................................................................... 5!
1.5.1! Location ................................................................................................................... 5!
1.5.2! Physiography and Infrastructure .................................................................................. 6!
1.6! The South African Coal Mining Industry ............................................................................. 9!
1.6.1! Production ................................................................................................................ 9!
1.6.2! Demand .................................................................................................................. 10!
1.7! Mineral and Surface Rights and Approvals Critical to Project .............................................. 13!
1.8! Permitting ...................................................................................................................... 14!
2! Geology ..................................................................................................................................... 15!
2.1! Regional Geology ........................................................................................................... 15!
2.2! Local Geology ................................................................................................................ 16!
3! Exploration ................................................................................................................................ 17!
3.1! Exploration History ......................................................................................................... 17!
3.1.1! Drilling Density....................................................................................................... 18!
3.1.2! Data Location, Digital Terrain Model and Topographic Control ................................... 21!
3.1.3! Drill Core Logging .................................................................................................. 21!
3.1.4! Sampling, Analytical Procedures and Checks ............................................................. 21!
3.2! Planned Exploration Programmes ..................................................................................... 22!
4! WOLVENFONTEIN Coal Resources ......................................................................................... 24!
4.1! Sample Data Assumptions for Modelling Purposes ............................................................. 24!
4.2! Methodology .................................................................................................................. 24!
4.2.1! Data Verification ..................................................................................................... 24!
4.2.2! Borehole summary................................................................................................... 25!
4.2.3! Geological modelling ............................................................................................... 28!
4.2.4! Coal Resource Estimation ........................................................................................ 31!
4.3! Gross and Mineable In-situ Resources and Raw Qualities .................................................... 33!
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4.4! Physical Seam Characteristics........................................................................................... 37!
4.5! Coal Quality and Products ................................................................................................ 38!
5! MIDDELBULT AND MODDERFONTEIN Coal Resources........................................................ 45!
5.1! Sample Data Assumptions for Modelling Purposes ............................................................. 45!
5.2! Methodology .................................................................................................................. 45!
5.2.1! Data Verification ..................................................................................................... 45!
5.2.2! Geological Modelling .............................................................................................. 46!
5.2.3! Coal Resource Estimation ........................................................................................ 46!
5.3! Gross In-situ Coal Resource Volumes and Raw Qualities .................................................... 46!
5.3.1! Middelbult .............................................................................................................. 46!
5.3.2! Modderfontein ........................................................................................................ 52!
5.4! Gross In-situ Resources ................................................................................................... 53!
5.4.1! Relative Density ...................................................................................................... 53!
5.4.2! Statement of Gross In-situ Resources ........................................................................ 53!
5.5! Mineable In-situ Resources .............................................................................................. 54!
5.5.1! Minimum Mining Parameters ................................................................................... 54!
5.5.2! Geological Loss....................................................................................................... 56!
5.5.3! Geotechnical Considerations..................................................................................... 57!
5.5.4! Summary of Assumptions Underlying the Mineable Coal Resource Estimation ............. 57!
5.5.5! Mineable Coal Resource Statement and Classification ................................................ 57!
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List of Tables
Table 1.6.1_1 – South Africa’s Coal Reserves and Production Relative to Global Statistics (2008) 9!
Table 1.7_1 – Summary of Prospecting Rights Beneficially Held via Universal Coal Development 1 (Pty) Ltd 13!
Table 1.7_2 – Listing of Surface Rights and Titles over Granted Prospecting Rights 13!
Table 3.1.1_1 – SAMREC Requirements for Coal Resource Classification from SANS 10320 18!
Table 3.1.1_2 – JORC Requirements for Coal Resource Classification 18!
Table 3.2_1 – Kangala Coal Project – Prospecting Budget 23!
Table 3.2_2 – Exploration Expenditure Programme for Each Property 23!
Table 4.2.2_1 – Wolvenfontein Borehole Summary 25!
Table 4.2.2_2 – Wolvenfontein Roof, Floor and Width Statistics 27!
Table 4.2.2_3 – Wolvenfontein Roof, Raw Coal Composite Values 28!
Table 4.2.4_1 – Wolvenfontein Average Relative Densities per Seam 33!
Table 4.3_1 – Wolvenfontein Gross and Mineable In-Situ Coal Tonnages for Wolvenfontein 34!
Table 4.3_2 – Wolvenfontein Main Resource Area - Gross and Mineable In-Situ Coal Tonnages and Raw Coal Qualities. 34!
Table 4.3_3 – Wolvenfontein Southern Resource Area - Gross and Mineable In-Situ Coal Tonnages and Raw Coal Qualities. 34!
Table 4.3_4 – Gross In-Situ Tonnages and Raw Qualities for the Major Coal units in the Main Resource Area at Wolvenfontin.34!
Table 4.3_5 – Gross In-Situ Coal Tonnages and Raw Qualities for the Coal Plies and In-seam Partings within the Main Resource
Area at Wolvenfontein.. 36!
Table 4.5_1 – Washabilities Coal Plies and In-seam Partings, Northern Resource Area at Wolvenfontein. 39!
Table 4.5_2 – Washabilities for the Selected Mining Units within the Main Resource Area at Wolvenfontein (Air-dried basis) 39!
Table 4.3.1_1 – Mid (No. 4) Seam Raw Coal Qualities at Middelbult. 48!
Table 5.3.1_2 – No.2 Seam Raw Coal Qualities at Middelbult 50!
Table 5.3.2_1 – Middle Seam Raw Coal Qualities at Modderfontein 52!
Table 5.3.2_2 – Middle Seam Raw Coal Qualities at Modderfontein 52!
Table 5.4.1_1 – Relative Densities Used for the Various Seams at Middelbult 53!
Table 5.4.2_1 – Gross In-Situ Tonnage for Middelbult 54!
Table 5.5.2_1 – Geological Losses Applied to the Coal Seams at Middelbult 57!
Table 5.5.5_1 – Estimated Coal Resources of the Kangala Coal project 58!
Table 5.5.5_2 – Summary of Mineable In-Situ Tonnage and Qualities at Middelbult 59!
List of Figures
Figure 1.3_1 – Relationship between Resources and Reserves and Degree of Knowledge 4!
Figure 1.5.1_1 – Map Showing Geographic Location of the Kangala Coal Project Mineral Properties 5!
Figure 1.5.2_1 – Map Showing Physiography and Infrastructure at Wolvenfontein Portions 1 and R/E of Portion 2 6!
Figure 1.5.2_2 – Map Showing Physiography and Infrastructure at Middelbult Portions 40 and 82 7!
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Figure 1.5.2_3 – Map Showing Physiography and Infrastructure for Modderfontein Portion 1 8!
Figure 1.6.2_1 – Diagram Showing Power Demand and Power Station Capacities over Time 11!
Figure 1.6.2_2 – Diagram Showing Power Demand and Supply as Forecast by Eskom 11!
Figure 1.6.2_3 – Port (RBCT) capacity vs. rail and export capacities 12!
Figure 2.1_1 – The Witbank Coalfield (After Smith and Whittaker, 1986 15!
Figure 2.2_1 – Kangala Schematic Coal Stratigraphic Column 17!
Figure 3.1.1_1 – Borehole Location and Drill Density at Wolvenfontein 19!
Figure 3.1.1_2 – Borehole Location and Drill Density at Middelbult 20!
Figure 3.1.1_3 – Borehole Location and Drill Density at Modderfontein 20!
Figure 4.2.3_1 – Typical Coal Seam Profile at Wolvenfontein 29!
Figure 4.2.4_1 – Seam SB Resource Classificaation at Wolvenfontein 32!
Figure 4.2.4_2 – Seam SM Resource Classificaation at Wolvenfontein 32!
Figure 4.4_1 – Mid Seam Depth below Surface at Wolvenfontein 37!
Figure 4.4_2 – Mid Seam Thickness at Wolvenfontein 37!
Figure 4.4_3 – Bottom Seam Depth below Surface at Wolvenfontein 38!
Figure 4.4_4 – Bottom Seam Thickness at Wolvenfontein 38!
Figure 4.5_1 Mid Seam CV (Mj/kg) (air-dried basis) distribution at a wash RD of 1.60 at Wolvenfontein 40!
Figure 4.5_2 – Mid Seam Yield (%)(air-dried basis) distribution at a wash RD of 1.60 at Wolvenfontein 40!
Figure 4.5_3 Bottom (Ply BA) Seam CV (Mj/kg) (air-dried basis) distribution at a wash RD of 1.90 at Wolvenfontein 41!
Figure 4.5_4 – Bottom (Ply BA) Seam Yield (%)(air-dried basis) distribution at a wash RD of 1.90 at Wolvenfontein 41!
Figure 4.5_5 Bottom (Ply BB) Seam CV (Mj/kg) (air-dried basis) distribution at a wash RD of 1.90 at Wolvenfontein 41!
Figure 4.5_6 – Bottom (Ply BB) Seam Yield (%)(air-dried basis) distribution at a wash RD of 1.90 at Wolvenfontein 41!
Figure 4.5_7 Bottom (Ply BC1) Seam CV (Mj/kg) (air-dried basis) distribution at a wash RD of 1.60 at Wolvenfontein 42!
Figure 4.5_8 – Bottom (Ply BC1) Seam Yield (%)(air-dried basis) distribution at a wash RD of 1.60 at Wolvenfontein 42!
Figure 4.5_9 Bottom (Ply BC2) Seam CV (Mj/kg) (air-dried basis) distribution at a wash RD of 1.90 at Wolvenfontein 43!
Figure 4.5_10 – Bottom (Ply BC2) Seam Yield (%)(air-dried basis) distribution at a wash RD of 1.90 at Wolvenfontein 43!
Figure 4.6_1 Map Showing the Stripping Ratio for the Mining Selection (cubic metres/tonne) at Wolvenfontein 44!
Figure 5.3.1_1 Map Showing the Depth to Roof Contours for Mid (No. 4) Seam at Middelbult 47!
Figure 5.3.1_2 – Map Showing the Thickness Contours for Mid (No. 4) Seam at Middelbult 47!
Figure 5.3.1_3 – Map Showing the Raw Calorific Value Contours for Mid (No. 4) Seam at Middelbult 48!
Figure 5.3.1_4 – Map Showing the Depth to Roof Contours for No. 2 Seam at Middelbult 49!
Figure 5.3.1_5 – Map Showing the Thickness of 2 Seam at Middelbult 50!
Figure 5.3.1_6 – Map Showing the Thickness of 2 Seam at Middelbult 51!
Figure 5.5.1_1 – Map Showing the Coal Resource Outline for the Mid (No. 4) Seam at Middelbult 55!
Figure 5.5.1_2 – Map Showing the Coal Resource Outline for No. 2 Seam at Middelbult 56!
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List of Appendices
Appendix 1 – Curriculum Vitae of Technical Experts
Appendix 2 – Country Profile and Explanation of Mining Title as it Applies in South Africa
Appendix 3 – Prospecting Work Programme – Kangala Coal Project
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Kangala (Elof) Coal Project Page: i Independent Competent Person’s Report – 31 May 2010
EXECUTIVE SUMMARY
Coffey Mining (SA) (Pty) Limited (Coffey Mining) was appointed by Universal Coal plc (“Universal Coal”)
to complete an Independent Competent Person’s Report (“CPR”) of the coal bearing potential of the
Kangala (ELOF) Project Area.
The area under consideration incorporates three prospecting rights in the Delmas District of the
Mpumalanga Province, South Africa, collectively referred to as the Kangala Coal Project. Table 1 lists
the mineral rights held by Universal Coal Development 1 (Pty) Ltd, a 100% owned subsidiary of
Universal Coal plc.
Table 1 Kangala Coal Project
Summary of New Order Prospecting Rights Beneficially Held
Property Permit Number Size (ha)Licence
Expiry Date
Universal Coal Beneficial Interest
(%)
Middelbult 235 IR, Portion 40 & 82 MP30/5/1/1/2/641PR 942 05/11/2011 70.5
Wolvenfontein 244 IR, Portion 1and R/E of Portion 2 MP30/5/1/1/2/904PR 951 05/11/2011 70.5
Modderfontein 236 IR, Portion 1 MP30/5/1/1/2/639PR 127 05/11/2011 70.5
Total 2020
The Project area is located 80km due east of the centre of Johannesburg next to the operating coal
mines Leeuwpan and Stuart Coal, close to excellent road and railway infrastructure and within a radius
of 70km from four coal-fired power stations.
The Kangala Project area may be classified as a multiple seam deposit type and hosts three seams,
namely the Top, Mid and Bottom seams. The Top and Mid seams can possibly be correlated with the
No. 5 and No. 4 and No. 3 seams, respectively and the thicker Bottom seam appears to represent a
combination of the No. 2 and No. 1 seams.
Within the project area the Mid and Bottom seams are of economic interest. The thickness of the Mid
seam ranges 0.98 m to 3.74 m and consists of high quality bright to dull coal. The Bottom Seam
consists of alternating coal and carbonaceous shale layers and is between 8.45 m and 17.5 m thick,
Within local basement lows it can attain a thickness of up to 30m
Table 2 summarises the estimated coal resources of the Kangala Coal Project. Based on the drillhole
density, 33.5% of the resources have been classified by Coffey Mining as Measured and the balance as
Indicated and Inferred in terms of the JORC and SAMREC codes.
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Kangala (Elof) Coal Project Page: ii Independent Competent Person’s Report – 31 May 2010
Table 2 Kangala Coal Project
Estimated Coal Resources of the Kangala Coal Project
Resource Area
Gross In-Situ
Tonnes (‘000
tonnes)
Geological Loss (%)
Mining Loss (%)
Mineable In-Situ Tonnes (‘000 tonnes)
Coal Resource Classification
Total Attributable to Universal Coal
Wolvenfontein
Mid (No. 4) Seam 927 10 10 751 529 Measured
Mid (No. 4) Seam 125 10 10 101 71 Indicated
Mid (No. 4) Seam 1,249 20 10 899 634 Inferred
Bottom (No. 2) Seam 34,257 10 10 27,748 19,562 Measured
Bottom (No. 2) Seam 30,917 20 10 22,260 15,693 Inferred
Grand Total Wolvenfontein 67,475 51,760 36,489
Middelbult
Mid (No. 4) Seam 12,227 25 10 8,253 5,818 Inferred
Bottom (No. 2) Seam 25,208 25 10 17,016 11,996 Inferred Grand Total Middelbult 37,435 25,269 17,815
Grand Total Resource Tonnes
104,910 77,028 54,304
The JORC and SAMREC compliant gross coal resources at Kangala total 104.91 million tonnes (in
situ before losses) and the mineable coal resources are estimated to be 77.03 million tonnes (in situ
after losses). Total attributable resources to Universal Coal are 54.3 million tonnes. The Bottom
(No. 2) seam accounts for 78% of the total coal resource at Kangala.
The Kangala Project hosts bituminous coal that would have to be selectively mined, blended and
beneficiated to produce a saleable product. Laboratory-scale washability tests indicate that the coal
seams at Kangala could yield between 25% - 30% of 26 Mj/kg CV (air dried) primary product,
suitable for the domestic and export steam coal markets. The balance of the saleable coal is suitable
for local power generation (Eskom). All of the coal is expected to be accessible by open pit mining
techniques at an average stripping ratio of less than 2:1 Cubic metres/tonne.
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Kangala (Elof) Coal Project Page: iii Independent Competent Person’s Report – 31 May 2010
GLOSSARY OF TERMS, ABBREVIATIONS AND UNITS
Word Definition
amsl above mean sea level
Analyses Process of determining chemical properties of a coal sample
Ash Is a measure of the non combustible material in coal expressed as a percentage
Bituminous coal A medium quality coal mostly used in raising steam for the generation of electricity
Borehole Core or chips extracted form a cylindrical hole during drilling
Borehole log A graphical representation of the information revealed by vertical diamond drilling
cm Centimetre
CP Competent Person
CPR Competent Person’s Report
CV Calorific Value being a measure of contained heat measured in MJ/kg
CSV Comma Separated Values, the most common import and export format for spreadsheets and databases
DAF vols or DAFVM or Dry-ash-free volatiles
The volatiles expressed as percentage without the other proximate analyses (Ash and moisture)
DEAT Department of Environment and Tourism (South Africa)
DM dense medium
DME Department of Minerals and Energy
DMS dense medium separation
DTM digital terrain model
EMP Environmental Management Plan
EMPR Environmental Management Programme Report
g Grams
GDP Gross Domestic Product
GTIS Gross Tonnes In-situ with no modifying factors
Ha or Hectare A measurement of area 100m by 100m
HQ Diamond drill core size 63.5mm in diameter
Injula Injula Mining Operations (Pty) Ltd
in situ tonnage Measure of mass of coal in the ground containing inherent moisture
ISO International Standards Organisation
JORC The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves
JSE Johannesburg Securities Exchange
m Metre
MJ/kg Mega Joule per kilogram
MPRDA South African Minerals and Petroleum Resources Development Act of 2002 (ACT No. 28 of 2002)
Mt Million Tonnes
Mt/a Million Tonnes per annum
MTIS Mineable Tonnes In-situ
MW Mega Watt
RBCT Richards Bay Coal Terminal
RD Relative Density
ROM Run of Mine
SAMREC South African Code for Reporting Mineral Resources and Mineral Reserves
SANS South African National Standard
SANAS South African National Accreditation System
Stripping Ratio or SR The amount of overburden that must be removed to gain access to a unit amount of coal, expressed as cubic metres of overburden to tonnes of coal. A stripping ratio commonly is used to express the maximum volume or weight of overburden that can be profitably removed to obtain a unit amount of coal.
T Tonnes
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Kangala (Elof) Coal Project Page: 1 Independent Competent Persons Report – 31 May 2010
1 INTRODUCTION
1.1 Scope of Work
In April 2008 Coffey Mining was appointed by Universal Coal Plc (“Universal Coal”) to
complete an Independent Competent Person’s Report (“CPR”) of the Kangala Coal Project.
The CPR assessed the reliability of the information available for the exploration areas and
the potential of the coal deposit.
Following a drilling programme in 2008 and 2009 that included thirty seven surface cored
drillholes on the farm Wolvenfontein 244 IR, Universal Coal requested Coffey Mining (South
Africa) to update the 2008 CPR.
Universal Coal, incorporated in England and Wales, and its subsidiaries, incorporated in
South Africa, (together “the Group”) are focused on exploration for coal in the Republic of
South Africa. Universal Coal, through a wholly owned South African subsidiary, Universal
Coal Development 1 (Pty) Ltd, concluded the purchase of a 70.5% share of the prospecting
rights that comprise the properties referred to as the Kangala Coal Project, constituting
certain portions of the farms Wolvenfontein, Middelbult and Modderfontein, from Injula
Mining Operations (Pty) Ltd (“Injula”).
The current directors of Universal Coal have an interest in Injula. None of the past directors
of Universal Coal or its promoters has any interest (current or past) in Injula, its associated
parties, or in the coal project which is the subject of this report.
All units are metric, unless otherwise stated i.e. tonnes are reported as metric tonnes. All
tonnages are quoted on an air dry basis.
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Kangala (Elof) Coal Project Page: 2 Independent Competent Persons Report – 31 May 2010
1.2 Participants
The participants consist of a number of technical experts that were brought together by
Coffey Mining to complete the 2008 CPR and this updated CPR. These are the “Competent
Persons” as defined in the SAMREC code, Sections 9 and 10 and in terms of Section 10 of
the JORC Code (The resumes are presented in Appendix 1). The participants in the review
and their individual areas of responsibility are listed as follows:-
Alan Goldschmidt, Coffey Mining Senior Consultant – Resource Geology
(BSc (Hons) Geology, B.Com, Pr.Sci.Nat, MGSSA) – Primary author, CPR update.
David van Wyk, Associate Consultant (Geocoal Services).
(BSc (Geol), Pr.Sci.Nat, FGSSA, MGSSA) (SACNASP Registration number. 401964/83) -
Data review, geological interpretations, coal resource estimation for the Middelbult and
Modderfontein properties, report preparation. He is the competent person for the
Modderfontein & Middlebult resource estimates.
David van Wyk is a registered natural scientist and is conducting the CPR under the
auspices of the South African Council for Natural Scientific Professionals (“SACNASP”),
280 Pretoria Street, Silverton, which is a body recognised by SAMREC. David van Wyk is
also familiar with and adheres to the new South African Minerals and Petroleum Resources
Development Act of 2002 (ACT No. 28 of 2002) and the revised SAMREC 2007 code and
the commodity specific coal code, namely SANS 10320:2004, the South African Guide to
the systematic evaluation of coal resources and coal reserves. Mr. van Wyk resides at
26 Croyden Circle, Port Alfred, South Africa.
Mr. van Wyk has more than 27 years experience in the South African Coal industry. He has
a BSc. Geology degree from Rhodes University; is a Past President, fellow and member of
the Geological Society of South Africa. He is a council and executive member of the South
African Council for Natural Scientists and has written a number of published and
unpublished articles on coal. He is also a qualified coal plant operator.
Nico Denner, Consultant (Gemecs)
(BSc(Hons) Geology, MBA, Pr.Sci.Nat, MGSSA) - Data review, geological interpretations,
coal resource estimation for Wolvenfontein property, report preparation. He is the
competent person for the Wovenfontein resource estimate.
Mr. Denner has involved in mineral resource estimation for more than 10 years. He has
specialised in resource modelling and resource estimation. Nico Denner is a registered
natural scientist and is conducting the CPR under the auspices of the South African Council
for Natural Scientific Professionals (“SACNASP”), 280 Pretoria Street, Silverton, which is a
body recognised by SAMREC. Nico Denner is also familiar with and adheres to the new
South African Minerals and Petroleum Resources Development Act of 2002 (ACT No. 28 of
2002) and the revised SAMREC 2007 code and the commodity specific coal code, namely
SANS 10320:2004, the South African Guide to the systematic evaluation of coal resources
and coal reserves. For the past three years has worked as a geological consultant dealing
primarily with coal and platinum projects. Nico Denner presently works as part of Gemecs
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(Pty) Ltd, an independent group of consultants. Their office is located in Visiomed Office
Park, 269 Beyers Naude Drive, Blackheath, South Africa.
Kees Dekker, Associate Audit Manager
(MSc (Geoch), B.Com, MBA, Pr.Sci.Nat) (SACNASP Reg. No. 400236/06) – author, Initial
CPR document.
Kathleen Body, Coffey Senior Consultant – Resources
(BS (Geol) Pr.Sci.Nat) - Peer review
Independence is assured by the fact that the Competent Persons, or any of the Competent
Person’s staff and associates involved in this report, do not hold any equity in Universal
Coal or Injula or their subsidiary or associated companies, or have a direct or indirect
interest in any project that is the subject of this report. Fees for the preparation of this report
are being charged at standard rates with expenses reimbursed at cost. Payment of fees
and expenses is in cash and is in no way contingent upon the conclusions drawn in this
report.
1.3 JORC and SAMREC Codes
This report has been compiled in compliance with the, guidelines of the Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC). The
CPR has also been compiled in compliance with the recommendations and guidelines set
out in the revised 2007 South African Code for The Reporting of Exploration Results,
Mineral Resources and Mineral Reserves (SAMREC) Code, and all participants of this
report qualify as Competent Persons in terms of the JORC and SAMREC Codes.
Within the cover of the SAMREC Code, particular reference is taken of Section 6,
Commodity Specific Reporting For Coal as well as the guidelines laid out in
SANS 10320:2004 (South African Guide to the systematic evaluation of coal resources and
coal reserves). This standard provides a detailed framework for reporting on coal resources
and reserves for the purpose of the Securities Exchanges and defines common terminology
to be used in public reporting with the SAMREC Code.
Figure 1.3_1 is a diagram showing the relationship between the level of geological
knowledge and resource categories.
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Figure 1.3_1 JORC: Relationship between Resources and Reserves and Degree of Knowledge
Source: JORC Code
1.4 Site Visits and Data Reviewed
Mr van Wyk visited the project area on 8 August 2007 and again on 15 August 2007.
The data and information made available to Coffey Mining are summarised as follows:-
! The initial geological report, dated May 2007, which was written by MJ Malan of Injula,
based on historical borehole data and reviewed by Coffey Mining.
! Electronic copies of the borehole coordinates, detailed borehole logs and analytical
data (raw and washed) and hard copies of the original logsheets and analytical sheets,
which were purchased from the Council for Geoscience, South Africa.
! This report is an update of a previous CPR compiled in March 2008. It includes
information derived from more recent surface drilling within the Wolvenfontein area.
The Drilling of thirty seven diamond cored drillholes was completed in August 2009.
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1.5 Property Description
1.5.1 Location
The Kangala Coal Project is located approximately 65km east of Johannesburg in the
Delmas District, Mpumalanga Province (Figure 1.5.1_1). The nearest towns are Delmas,
Devon and Leandra.
Figure 1.5.1_1 Map Showing Geographic Location of the Kangala Coal Project Mineral Properties
The Kangala Coal Project consists of portions of three properties, referred to as
Wolvenfontein, Middelbult and Modderfontein.
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1.5.2 Physiography and Infrastructure
The topography of the various properties is typical rolling Highveld savannah grasslands
with some dams, pans and small rivers. There are wetland areas that could influence the
location of any opencast operations.
Wolvenfontein
The topography of the Wolvenfontein property is flat lying to gently undulating, varying from
1,560m amsl in the east to 1,590m a.m.s.l. in the west and north (Figure 1.5.2_1). Two
northeast flowing streams drain the farm. Marshes are associated with the streams. The
land use of the portions to which this report refers is predominantly arable land (dry land).
The property is surrounded by adjoining farms. The Delmas-Nigel tarred road (R42)
traverses the farm in the south.
Figure 1.5.2_1 Map Showing Physiography and Infrastructure at Wolvenfontein Portions 1 and R/E of Portion 2
Middelbult
The Middelbult property is flat lying, varying from 1,570 metres a.m.s.l. in the northeast to
1,605 metres amsl in the southwest (Figure 1.5.2_2) and drained by two northeast flowing
tributaries of the Bronkhorstspruit River. The land use of the portions to which this report
toW
eilaagte
R42
Nigel
35 Km
Delmas
6 Km
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refers, is predominantly arable land under irrigation. A marsh is associated with the stream
in the southern part of the farm. The Springs-Delmas tarred road and the Johannesburg-
Witbank railway line are situated two kilometres to the north.
Figure 1.5.2_2 Map Showing Physiography and Infrastructure at Middelbult Portions 40 and 82
Modderfontein
The Modderfontein property is flat-lying, with the topography averaging 1,580m a.m.s.l. and
sloping gently towards the east (Figure 1.5.2_3). No streams are present on Portion 1. The
land use is predominantly arable land.
The property is bounded by adjoining farms in the north, west and south and smallholdings
on the east. A tar road linking the R555 with the R50 traverses the farm in the southeast. A
homestead and farming complex is located towards the southern part of the property. The
N12 highway from Johannesburg to Witbank passes one kilometre to the south.
MIDDELBULT 235 IR
0 1000 2000 4000 m
SCALE
N
40
00
0
35
000
2 895 000
2 900 000
Topograhic Contours (20m)
Roads Drainage
Railway line
Rights Granted
1620
1600
1580R555Springs
25 Km
Delmas
2 Km
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Figure 1.5.2_3 Map Showing Physiography and Infrastructure for Modderfontein Portion 1
RIETKOL 237 IR
MODDERFONTEIN 236 IR
46
000
1
2 890 000
44
000
N
0 1 km 2 km
SCALE
Topograhic Contours (20m)
Roads
2 892 000
1580
1560
Rights Granted
N12
Delmas
15 Km
Johannesburg
50 Km
to the
R50
to
Katbosch
fontein
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1.6 The South African Coal Mining Industry
1.6.1 Production
In 2007, South African mines produced 247.7 million tons (Mt) of coal. Of this 182.8Mt were
sold locally for R19.7 billion, and 67.7Mt realised R24.4 billion on export markets. South
Africa has estimated recoverable coal resources of R31 billion tons in 2007. In terms of coal
production South Africa is ranked sixth (6th). South Africa has extensive coal resources and
reserves (Table 1.6.1_1).
The South African coal industry remains highly concentrated, with almost 90% of the
saleable coal being supplied by only five mining groups in 2006: Anglo Coal, BHP Billiton
Limited, Sasol Limited, Exxaro Resources Limited and Xstrata Plc. Of the ROM coal
produced approximately 53% was derived from open cast mining, with the remaining
underground production predominantly by bord-and-pillar (38% ROM coal), stooping (5%)
and longwall (3%).
As most of the coal currently being mined in South Africa occurs as thick seams at relatively
shallow depths, it is amenable to mining by relatively cheap production techniques. In 2008
South Africa was rated as the 5th largest holder of coal reserves in the world at 48.0 billion
tonnes (Table 1.6.1_1).
Table 1.6.1_1
Project Kangala Coal Project
South Africa’s Coal Reserves (Anthracite and Bituminus) and Production Relative to Global Statistics (2008)
Country Reserves
# Production
#
Mt % Mt %
China 2,200 14.6 2,782 40.6
US 108,950 25.5 1,063 15.5
India 54,000 12.7 512 7.5
Australia 36,800 8.6 402 5.9
Russian Federation 49,088 11.5 327 4.8
South Africa 30,408 7.1 250 3.7
Indonesia 1,721 0.4 229 3.3
Germany 152 0.0 192 2.8
Poland 6,012 1.4 144 2.1
Kazakhstan 28,170 6.6 115 1.7
Turkey 7,814 1.8 86 1.3
Ukraine 15351 3.6 77.3 1.1
Other 26,006 6.1 679 9.9
Total 426,672 100.0 6,859 100.0 # BP Statistical Review of World Energy 2009
There are indications that India and the Far East will be a growing market for South African
lower quality coal, with domestic production in these areas not capable of supplying a
rapidly increasing demand for electrical power. For
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1.6.2 Demand
South Africa’s indigenous energy resource base is dominated by coal. Internationally, coal
is the most widely used primary fuel, accounting for about 36% of the total fuel consumption
of the world’s electricity production. Coal meets about 88% of South Africa’s primary energy
needs.
Electricity, as a key strategic economic sector, underpins government’s growth and
development objectives. The Department of Minerals and Energy has several policies to
ensure an adequate supply of electricity-generation capacity and that the distribution
infrastructure is maintained.
Ever increasing demand for electricity in an expanding economy has brought the era of
excess capacity to an end. Eskom’s net generating reserve margin is about 8% compared
to the internationally accepted range of between 15% and 18%. Between October 2007 and
February 2008, the country suffered major supply interruptions as load shedding had to be
implemented to manage the energy shortage.
Eskom’s power stations are ageing. In many cases, refurbishment is necessary to extend
their economically useful life. Continued high-load factors at the stations (required to meet
demand) has put severe stress on all parts of the plant as they are frequently required to
operate outside initial design parameters. These loads require a high level of planned
maintenance.
Additional power stations and major power lines are being built to meet rising electricity
demand in South Africa. The approved capacity expansion budget is R343 billion to 2013
and is expected to grow to more than a trillion rand by 2026. Ultimately, Eskom will have to
double its capacity to 80,000 MW by 2026.
Eskom announced its intention to begin diversifying its primary energy mix (using less coal)
five years ago. It is building open-cycle gas turbines at Atlantis and Mossel Bay, of which
1,024 MW was commissioned in 2007 in record time. In addition, Eskom plans to build a
100MW wind facility in the near future, pending licensing approvals. Feasibility studies
continue regarding other renewable-energy and gas-plant initiatives.
Figure 1.6.2_1 shows the power demand – capacity relationship over time to illustrate the
urgent need for additional power generation capacity in South Africa.
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Figure 1.6.2_1 Diagram Showing Power Demand (in MW) and Power Station Capacities over Time.
From Wood and Mackenzie Research Consulting
The South African power producer Eskom has announced a R150 billion capital expansion
programme for the five years until 2012 aimed at increasing its power generation capacity
by 22,000MW by 2017. Although Eskom has a policy of reducing its reliance on coal from
88% currently to 78% by 2012, mainly by increasing use of nuclear energy, coal will still be
the predominant source of energy (Figure 1.6.2_2). Eskom expects to have to raise its coal
purchases by about 44.9 million tons a year by 2025 to meet the forecast power demand,
according to a statement by Rob Lines, acting General Manager – Generation Primary
Energy of Eskom, in January 2007.
Figure 1.6.2_2 Diagram Showing Power Demand and Supply as Forecast by Eskom.
HENDRINA
MATIMBA
KENDAL
MAJUBA
CAMDEN RTS
OCGTINGULA
MEDUPI
0
10,000
20,000
30,000
40,000
50,000
60,000
55 60 65 70 75 80 85 90 95 00 05 10 15 20 25 30 35 40 45 50 55 60
Year
Me
ga
wa
tt In
sta
lle
d
55 60 65 70 75 80 85 90 95 00 05 10 15 20 25 30 35 40 45 50 55 60
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Another major demand component is the export of higher grade coal, predominantly to
Europe. South African coal exports to India in 2009 exceeded 22Mt over double that of
2008. There are indications that India and the Far East will be a growing market for South
African lower quality coal, with domestic production in these areas not capable of supplying
a rapidly increasing demand for electrical power.
The RBCT Phase V project will result in an increase of the export capacity from 72Mt/a to
91Mt/a by the end of the first quarter in 2010. The 19Mt/a coal export capacity increment
will be divided between RBCT (9Mt/a), South Dunes Coal Terminal (6Mt/a) and to the new
coal exporters grouped together as the Coal Industry Task Team (4Mt/a).
Figure 1.6.2_3 illustrates that historically and in the future export and rail capacity
consistently falls short of projected RBCT capacity.
Figure 1.6.2_3 Port (RBCT) Capacity vs. Rail and Export Capacities.
From Wood Mackenzie Research Consulting
Universal Coal has no export allocation through RBCT, which can only be applied for upon
completion of a bankable feasibility study. Previously coal producers without access to
RBCT were at a significant disadvantage, robust internal demand for coal has resulted in
prices at mine gate being similar for inland coal and export coal of similar qualities. Given a
continuation of surplus export capacity local purchasers of coal will have to compete at least
in the short to medium term with coal prices set on the global market.
77 77 77 77 77 77 7879
81
96 96 96 96 96 96 96 96 96 96 96 96
50
55
60
65
70
75
80
85
90
95
100
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
Year
Mt
Port Capacity Rail Capacity Exports
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1.7 Mineral and Surface Rights and Approvals Critical to Project
Coffey Mining has been provided documentation by Injula confirming that the New Order
Prospecting Rights have been granted to Injula on Middelbult, Modderfontein, and part of
Wolvenfontein. Table 1.7_1 summarises the current status of the mineral rights.
Table 1.7_1
Kangala Coal Project
Summary of New Order Prospecting Rights Beneficially Held via Universal Coal Development 1 (Pty) Ltd
Asset Permit Number Interest
(%) Status
Licence Expiry Date
Licence Area (ha)
Comments
Prospecting Right in Middelbult 235 IR, Portion 40 & 82
MP30/5/1/1/2/641PR 70.5 Exploration 5/11/2011 942 Section 11
granted
Prospecting Right in Wolvenfontein 244 IR, Portion 1and R/E of Portion 2
MP30/5/1/1/2/904PR 70.5 Exploration 5/11/2011 951 Section 11
granted
Prospecting Right in Modderfontein 236 IR, Portion 1
MP30/5/1/1/2/639PR 70.5 Exploration 5/11/2011 127 Section 11
granted
Total 2020
The prospecting rights were granted under the terms and conditions contained in the
Mineral and Petroleum Resources Development Act, 2002 (Act no. 28 of 2002) (MPRDA).
This act grants the owner exclusive prospecting rights as well as the exclusive right to apply
for a Mining Right, which Universal Coal applied for in May 2009. Injula and Universal Coal
have entered into agreements with most of the current surface right holders to ensure a
good working relationship. Copies of the agreements have been made available to Coffey
Mining. A listing of surface rights and titles is presented in Table 1.7_2.
Table 1.7_2
Kangala Coal Project
Listing of Surface Rights and Titles over Granted Prospecting Rights
Property Size (Ha)
Surface Rights
Owner Access
Agreements
Wolvenfontein 244 IR, Portion 1 and R/E of 2 951 Kallie-Madel Trust Yes
Middelbult 235 IR, Portion 40 & 82 942 Portion 40: VV2 Eiendomme
Portion. 82: JF Du Plessis Yes
Modderfontein 236 IR, Portion 1 127 MJ Potgieter No
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1.8 Permitting
The Environmental Management Plan (EMP) as required in Section 39 of the MPRDA has
been approved by the Department of Minerals and Energy and the Financial Guarantee for
rehabilitation has been provided.
To the best of Coffey Mining’s knowledge there are no legal reasons, or outstanding legal
proceedings that could prevent any activities planned by Universal Coal or any of its
subsidiaries or associated companies.
Coffey Mining considers the coal resources are stated in accordance with JORC and
SAMREC requirements.
1.9 Disclaimer
Coffey Mining has based its work on the Kangala project area on information largely
provided by Universal Coal. This information includes third party unpublished information.
Coffey Mining has endeavoured, by making all reasonable enquiries, to confirm the
authenticity and completeness of the third party technical data upon which this report is
based. However, Coffey Mining does not warrant the authenticity or completeness of any
such third party information. A final draft of this report was provided to Universal Coal, along
with a written request to identify any material errors or omissions.
Neither Coffey Mining, nor the authors of this report, is qualified to provide extensive
comment on legal facets associated with ownership and other rights pertaining to the
Kangala project area. Coffey Mining did not see or carry out any legal due diligence
confirming the legal title of the properties that form part of the Kangala project area.
Coffey Mining considers the coal resources for the Kangala project area stated in
accordance with the guidelines contained in the JORC Code (2003).
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2 GEOLOGY
2.1 Regional Geology
The Kangala project is located within the Springs-Vischkuil block on the western edge of the Witbank
Coalfield (Figure 2.1_1).
In the Springs-Vischkuil block the coal seams are inconsistently developed, and where present, more
closely resemble those of the South Rand Coalfield. Three seams, namely the Top, Mid and Bottom
seams are recognized. The Top and Mid seams can possibly be correlated with the No. 5 and No. 4
and No. 3 seams of the Witbank Coalfield and the thicker Bottom seam appears to represent a
combination of the No., 2 and No. 1 seams.
Figure 2.1_1
Kangala Coal Project The Witbank Coalfield (After Smith and Whittaker 1986)
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2.2 Local Geology
The characteristics of the coal seams present within the Kangala project area are detailed below (refer
to Figure 2.2_1):
Top Seam (5 Seam): The Top seam is generally between 0.5m and 1m thick and consists of dull to
bright coal with thin intercalated shale bands. The seam is located approximately 20m above the Mid
Seam and irregularly distributed in the area.
Mid Seam (4 Seam): Measurements of the thickness of the Mid seam vary between 0.98 m to 3.75m.
The Mid seam consists of high quality bright to dull coal with high sulphur content (mostly sulphide-
type). A carbonaceous shale inseam parting, between 5cm and 10 cm thick, may be present. The
seam can yield 65% to 75% RB1-type export thermal coal after washing.
Bottom Seam (2 Seam): The thickness of the Bottom seam is usually between 8.45m and 17.5m, but
can attain thicknesses of up to 30m within local basement lows. The seam is located approximately
1.5m below the Mid Seam and consists of four coal plies, namely the BA, BB, BC and BD bands,
separated by carbonaceous shale partings, between 35 cm and 83 cm thick:
The BA coal ply varies in thickness from 0.5 m to 2.75 m, averaging 1.17 m. At Kangala the
BA band typically consists of dull coal and is split into two units by a carbonaceous shale
parting (BAP) approximately 35 cm thick. The BA band (inclusive of the parting) can yield
between 40% and 45% Eskom quality coal at a wash density of 1.90 g/cm3.
The BB coal ply is approximately 1m thick and is separated from the BA band by an
approximately 30 cm thick shale parting. The BB band typically consists of dull to lustrous
coal. The BB coal band can yield approximately 70% Eskom quality coal at a wash density of
1.90.
The BC coal ply is on average 8.6 m thick and consists of an upper (BC1) and lower (BC2)
unit usually separated by a 10 cm thick carbonaceous shale parting. The BC coal band is
separated from the BB coal band by an approximate 35cm thick carbonaceous shale parting.
The BC1 unit is approximately 4.1 m thick and consists typically of bright to dull coal capable
of yielding between 30% and 65% 26 Mj/kg CV coal at a wash density of 1.60. The BC2 unit
is on average 4.5m thick and consists of dull to lustrous coal yielding approximately 75% to
80% Eskom grade coal at a wash density of 1.90.
The BD coal ply is sporadically developed, varying in thickness from 0.5 m to up to 9 m within
basement lows. The BD coal band typically consists of up to 5 coal units separated by
carbonaceous shale partings between 10 cm and 90 cm thick. The coal is dull and of a poor
quality.
The coal measures are underlain by Dwyka tillites between 1 m and 20 m thick, averaging 11.6 m. The
underlying basement consists of dolomite and chert of the Malmani Group and typically displays karst
features.
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Figure 2.2_1
Kangala Schematic Coal Stratigraphic Column
.
3 EXPLORATION
3.1 Exploration History
Prospecting for coal at Kangala started in the 1980’s and at that time was carried out by the
companies Southern Sphere (Pty) Ltd and Ingwe Coal Corp. Ltd. Data is available from 28
boreholes that formed part of this initial exploration programme. After examination of the
available data Coffey Mining consider it reasonable to assume that all past drilling was
diamond drilling using conventional equipment and TNW core size. This is borne out by the
mass of coal sample reported which corresponds to standard TNW core. Coal measures in
the Witbank - Springs coalfield are normally drilled either by HQ wireline or TNW diamond
drilling. For
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Universal Coal commenced with follow-up exploration in 2008 and to date has completed 37
holes on the Wolvenfontein property. All drilling was diamond drilling using conventional
equipment and TNW core size. As with the historical data intersections are vertical and
intersection widths are regarded as true thicknesses given the near horizontal nature of the
seams.
3.1.1 Drilling Density
Wolvenfontein resources have been reported according to JORC code and Australian
Guidelines for Estimating and reporting of coal. The guidelines differ to those of SAMREC in
terms of resource classification and borehole coverage.
The SAMREC requirements for coal resource classification from SANS 10320 are
summarised in Table 3.3.1_1 and those of JORC in Table 3.3.1_2
Table 3.1.1_1
Kangala Coal Project
SAMREC Requirements for Coal Resource Classification from SANS 10320
SAMREC Classification Boreholes Grid Approx.
Ha/boreholeQualification
Inferred coal resource 1 3km 1,000 Taking into account lateral continuity
Indicated coal resource 1 500m 25 Multiple seam deposit
Indicated coal resource 1 1km 100 Thick interbedded seam
Measured coal resource 1 350m 12.5 Both analytical and physical
Table 3.1.1_2
Kangala Coal Project
JORC guidelines for Coal Resource Classification from Australian Guideline for coal 2003
JORC Classification Boreholes Grid Approx.
Ha/boreholeQualification
Inferred coal resource 1 4km 1,600
Indicated coal resource 1 1km 100 None
Measured coal resource 1 500m 25
The recent drilling at Wolvenfontein has resulted in sufficient data being available for the Main
Resource area (the northern extent) to be mostly classified as a Measured coal resource. For
the Southern Resource area at Wolvenfontein and the other properties drilling is generally
sparse and not sufficient for coal resource qualification higher than an Inferred coal resource
category. For
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Figure 3.1.1_1
Kangala Coal Project Borehole Location and Drill Density at Wolvenfontein
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Figure3.1.1_2 Borehole Location and Drill Density at Middelbult
Figure 3.1.1_3 Borehole Location and Drill Density at Modderfontein
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3.1.2 Data Location, Digital Terrain Model and Topographic Control
As part of the most recent drilling at Wolvenfontein, the collar coordinates of the 37 holes
drilled (WN244_001 to WN224_0333, WN244_035 to WN244_037 and WN244_039) were
surveyed by a qualified surveyor from Trevor Cuflin Surveys. Additionally, over 1700 further
points were surveyed over the Main Resource Block for the purpose of creating an accurate
Digital Terrain Model (DTM) where opencast mining is planned.
For the historical data, there is no evidence in any of the reports, plans or borehole logs of any
certified surveyors submitting certified co-ordinates and elevations. Borehole co-ordinates
were recorded on most of the borehole graphic logs and these corresponded to those in the
Council for Geoscience database. Where the coal is deep, no topographic control was
available and the elevation of the boreholes collars were assigned an elevation derived from
the regional digital terrain model. For the purpose of this exercise, this is sufficient, but it will
be necessary to create a more accurate Digital Terrain Model (DTM) where opencast mining
is planned. This could be a source of error and the proposed drilling programme, which is
provided for in the budget, will have to twin boreholes to verify the positions and elevations of
at least two boreholes per property. Once the proposed drilling programme is complete, it is
recommended that a topographic DTM is modelled by digitising contours from the orthophotos
or flown (helicopter laser) survey before the results of the drilling programme are modelled.
3.1.3 Drill Core Logging
For the historical data, the Council for Geoscience provided copies of the filed graphic
borehole logs, analysis sheets and core recovery sheets. Although the presentation of the
logs could be improved, the data is considered accurate and reliable. It is noted that core
recoveries have been calculated. The core is considered to have been logged by
experienced geologists. The analyses were done either by McLachlan and Lazar (Pty) Ltd or
Ingwe Coal’s Koornfontein Mine coal laboratory. There is no record of samples being split for
inter lab umpire analyses, duplicates for cross checks or round robins between the
laboratories. Both coal laboratories had excellent reputations for coal analyses at that time
and are therefore considered to have provided reliable analyses. The data is considered of a
sufficient standard for coal resource estimation.
For the 2008 and 2009 drilling at Wolvenfontein, the core was logged by competent geologists
from Coffey Mining and Geosphere Drilling, with suitable experience of the coal deposits of
the greater Elof area. The logging data is considered of a sufficient standard for coal resource
estimation.
3.1.4 Sampling, Analytical Procedures and Checks
Graphic sample logs were provided for the historical holes by the Council for Geoscience and
it is considered that this was done by competent geologists.
Apart from the most recent drilling programme at Wolvenfontein, the rest of the drilling,
sampling and logging was undertaken in the 1980s. For this historical data, the procedures in
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obtaining and recording the data could not be verified. The verification of the historical
analyses was undertaken by examining the relationships between, inter alia, Calorific Value
(CV), ash, density and volatile matter to confirm that they are valid for the type of coal.
The laboratories used for the historical analyses were, at the time that the samples were
analysed, not SANAS accredited laboratories, but participated in coal laboratories round
robins that produced acceptable results. These laboratories currently have good reputations,
but remain uncertified. The laboratory procedures were not documented in any of the
historical reports. Data verification has been completed on the historical data by Coffey
Mining as far as is practically possible. It is recommended that the proposed drilling
programmes include twinned holes to verify historical data and to increase the confidence
level of the historical data.
Boreholes WN224_001 to WN224_006 were geologically sampled by Coffey Mining SA and
boreholes WN244_007 to WN244_039 by Geospere Drilling. Downhole wireline geophysical
surveys were conducted by Geoline Services. The sampling intervals were based on
downhole density plots and completed in accordance with the sampling procedures used by
Total Coal South Africa (Pty) Ltd on their adjacent project. The laboratory used for analyses
was Inspectorate M & L Coal Laboratory in Middelburg, which has an ISO 17025 accreditation
from SANAS. Standard laboratory quality control and quality assurance procedures were
undertaken by Inspectorate M&L laboratory. Further checking of sample FROM and TO
distances was performed on data that was formatted for use in the GBIS software.
3.2 Planned Exploration Programmes
Coffey Mining recommends the completion of the following borehole programmes at Kangala,
including the twinning of holes to verify the previous drilling programme information.
Furthermore the following exploration procedures should be adhered to:
! Downhole geophysics (wireline logging) should be done for all new drillholes,
! All cores should be photographed.
! All sampling intervals should be determined using the wire line logging.
! All analyses should be completed at Inspectorate M & L Coal Laboratory in Middelburg.
In addition, an aeromagnetic survey should be commissioned to help establish the location of
dolerite dykes and sills.
Table 3.2_1 summarises the clients cost estimate of the proposed future prospecting works
programme to be completed at the Kangala Coal Project. The detail prospecting works
programme is attached as Appendix 3.
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Table 3.2_1
Kangala Coal Project
Prospecting Budget
Phase Activity Planned Holes Number of
Samples
Period Cost
(Rand)
1 Data review, Mapping - - 3 Months Completed
2Wolvenfontein Measured Resource Drilling
38 (2,520 m) 660 6 Months Completed
3Middelbult & Modderfontein Measured Resource Drilling
50 (2,460m) 615 9 Months 3,807,000
Total 88 1,275 18 Months 3,807,000
Table 3.2_2 presents the estimated budget expenditure over time and for each property. The
focus of attention will in future be largely on Middelbult and Modderfontein.
Table 3.2_2
Kangala Coal Project
Exploration Expenditure Programme for Each Property
Property Year Ending 30/6/10
(R’000)
Year Ending 30/6/11
(R’000)
Total
(R’000)
Middelbult 1,598 1,598 3,196
Modderfontein 611 - 611
Total 2,209 1,598 3,807
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4 WOLVENFONTEIN COAL RESOURCES
4.1 Sample Data Assumptions for Modelling Purposes
The assumptions made in compiling the structural and quality model, based primarily on data
received from Universal Coal, are that:
! All data from drilling and sampling was reliable
! The borehole collars had been accurately surveyed
! All sampling was correctly labelled and reported against correct sample ID’s
! Core recoveries and core losses were accurately determined
! The laboratory results were correctly reported
4.2 Methodology
4.2.1 Data Verification
The following data were received from Universal coal in electronic format:
! Borehole collar survey file
! Borehole lithology descriptions
! Borehole seam unit interpretations
! Downhole geophysical logs
! Surface survey points
! Original analytical reports sheets from the coal laboratory.
A new borehole database was created in Micromine GBIS. All the relevant borehole
information was imported into this borehole database. This included borehole collars,
lithological descriptions, unit interpretations, geophysical logs, raw and fractional analyses.
Lithological descriptions were verified against the downhole geophysical logs, and coal seam
correlations validated. Coal sample positions were verified against coal seam occurrences,
and raw coal analyses were compared to lithological descriptions.
A number of analytical tests and routines were used to validate all the raw and washability
data as received from the laboratory. Anomalies were identified, queried and corrected were
possible, otherwise flagged and removed from the final modelling dataset.
A number of non coal partings were identified that was only analysed as raw coal. These
were mainly carbonaceous shales and siltstone layers. To ensure proper washability
estimation, and to accurately estimate the total product yield of each seam, dummy
washability curves were generated for these non coal partings within GBIS at relevant float For
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fractions. All the samples were normalised in GBIS to produce cumulative washability curves
for each sample, that was used in the modelling of the coal products.
4.2.2 Borehole summary
A total of 42 boreholes are present in the database. Of these 5 boreholes are historical holes,
and 37 current boreholes drilled by Universal Coal. Only 8 boreholes did not intersect any
coal. This was mainly due to the basement topography, weathering or dolerite intersections.
A list of boreholes is presented in Table 4.2.2_1. Borehole types are used to identify coal and
non coal boreholes. Types defined as follow:
! M – Coal present, used for coal modelling
! DWK – No coal intersected due to Dwyka basement
! DMT – No coal intersected due to dolomite basement
! DOL – No coal intersected due to dolerite intersection
! H – Historical borehole with coal
! HNC – Historical borehole – no coal present
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Table 4.2.2_1
Kangala Coal Project
Wolvenfonttein Borehole Summary
BHID X Y Z TYPE EOH
WN244001 "34088.600 "2898337.200 1587.700 M 66.73
WN244002 "34061.600 "2898761.800 1591.700 M 45.83
WN244003 "34494.100 "2898742.300 1591.600 M 39.20
WN244004 "33660.000 "2898610.600 1588.600 DWK 30.00
WN244005 "34243.600 "2899200.700 1593.800 M 67.62
WN244006 "33651.500 "2899169.000 1590.500 M 59.11
WN244007 "33781.633 "2897988.476 1584.576 DMT 47.22
WN244008 "34024.491 "2897927.274 1583.603 DOL 35.24
WN244009 "34346.179 "2897962.076 1579.327 M 29.26
WN244010 "34529.786 "2898241.575 1583.503 M 29.32
WN244011 "34283.493 "2898239.557 1585.063 DWK 29.22
WN244012 "34053.957 "2898154.946 1585.411 M 23.24
WN244013 "33782.579 "2898239.833 1585.823 M 67.94
WN244014 "33784.370 "2898490.807 1588.058 M 53.22
WN244015 "34034.679 "2898491.654 1589.655 M 83.22
WN244016 "34283.856 "2898489.646 1589.033 M 47.32
WN244017 "34534.594 "2898492.028 1587.901 M 54.57
WN244018 "34282.100 "2898740.337 1592.140 M 53.30
WN244019 "33783.400 "2898740.330 1589.992 M 59.24
WN244020 "33534.591 "2898740.164 1589.244 M 55.80
WN244021 "33284.289 "2898987.329 1587.287 M 47.30
WN244022 "33534.501 "2898991.854 1592.176 M 65.24
WN244023 "33800.422 "2899003.525 1594.065 M 55.55
WN244024 "34029.963 "2898991.150 1595.188 M 65.30
WN244025 "34283.428 "2898991.415 1594.090 M 47.24
WN244026 "34035.627 "2899296.585 1596.179 M 71.30
WN244027 "33845.159 "2899294.560 1594.573 M 53.27
WN244028 "33538.398 "2899287.398 1590.865 M 59.24
WN244029 "33286.613 "2899250.306 1587.005 M 47.24
WN244030 "33531.842 "2899495.032 1584.260 M 65.27
WN244031 "33795.382 "2899548.285 1590.934 M 41.30
WN244032 "34034.349 "2899542.748 1595.739 M 53.30
WN244033 "33935.519 "2899753.352 1585.765 M 41.30
WN244035 "33283.439 "2898736.195 1588.723 DWK 35.30
WN244036 "33441.328 "2898263.400 1582.192 M 53.24
WN244037 "33279.617 "2897735.122 1582.254 DMT 29.27
WN244039 "33148.687 "2900239.909 1587.671 M 71.24
DM127 "33784 "2900095 1585 HNC 20.00
DM132 "34125 "2901152 1592 H 55.00
DM138 "33491 "2901815 1594 H 50.00
DMMT344 "32600 "2899669 1577 H 20.00
WF2 "32818 "2900876 1587 HNC 20.00For
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A summary of the seam roof and floor elevation as well as seam thickness for each seam is
summarised in Table 4.2.2_2:
Table 4.2.2_2
Kangala Coal Project
Wolvenfontein Roof, Floor and Width Statistics
Borehole Top Bottom Seam!
Name Elevation Elevation Thickness
DM132 1552 1552 0.43
DM138 1565 1562 2.77
WN244001 1548 1547 0.83
WN244002
WN244003
WN244005 1553 1551 2.17
WN244006 1548 1547 0.92
WN244009
WN244010
WN244012
WN244013 1550 1550 0.53
WN244014
WN244015 1549 1548 1.69
WN244016
WN244017
WN244018 1572 1570 1.48
WN244019
WN244020 1563 1562 1.12
WN244021
WN244022 1560 1559 0.96
WN244023 1556 1555 1.13
WN244024
WN244025
WN244026 1561 1558 2.35
WN244027 1564 1563 0.90
WN244028 1564 1562 1.28
WN244029 1560 1559 0.96
WN244030
WN244031
WN244032
WN244033
WN244036
WN244039 1548 1546 1.76
Mean_Value!!: 1557 1556 1.33
Max_Value!!!: 1572 1570 2.77
Min_Value!!!: 1548 1546 0.43
No.!Samples!: 16 16 16
Seam!M
Borehole Top Bottom Seam!
Name Elevation Elevation Thickness
DM132 1551 1542 9.18
DM138 1561 1552 9.21
DMMT344 1571 1567 3.66
WN244001 1544 1522 22.87
WN244002 1563 1549 14.27
WN244003 1568 1555 13.04
WN244005 1549 1529 20.84
WN244006 1546 1532 14.55
WN244009 1562 1557 4.74
WN244010 1572 1571 1.26
WN244012 1567 1565 1.46
WN244013 1548 1519 29.49
WN244014 1563 1549 13.52
WN244015 1546 1526 20.79
WN244016 1565 1553 11.57
WN244017 1559 1542 16.84
WN244018 1570 1557 12.70
WN244019 1557 1548 8.57
WN244020 1561 1545 16.49
WN244021 1564 1554 9.95
WN244022 1559 1543 15.28
WN244023 1554 1543 11.43
WN244024 1569 1551 17.68
WN244025 1562 1555 6.60
WN244026 1557 1540 17.05
WN244027 1562 1547 15.70
WN244028 1562 1546 15.69
WN244029 1558 1541 17.16
WN244030 1542 1531 11.27
WN244031 1572 1560 11.81
WN244032 1571 1554 17.01
WN244033 1571 1557 13.22
WN244036 1564 1563 1.39
WN244039 1545 1520 25.13
Mean_Value!!: 1560 1547 13.28
Max_Value!!!: 1572 1571 29.49
Min_Value!!!: 1542 1519 1.26
No.!Samples!: 34 34 34
Seam!B
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No sampling data were available for the historical boreholes. Only 10 SM seam and 26 SB
seam intersections were sampled in the recent boreholes. The Raw coal composite values
for each borehole is summarised in Table 4.2.2_3:
Table 4.2.2_3
Kangala Coal Project
Wolvenfontein Roof, Raw Coal Composite Values
4.2.3 Geological modelling
Geological modelling was performed using Gemcom MinexTM software. Minex provides the
best geology and mine planning tools for coal and other stratified deposits, ensuring
resources are evaluated accurately and mined efficiently. The typical coal seam profile of the
Wolvenfontein area consists of two main seams, each consisting of a number of intraseam
partings as illustrated in Fig 4.2.3_1. The two main seams were labelled as SM – Mid Seam,
and SB – Bottom Seam.
Borehole RD AS IM VM CV TS FC
Name gm/cc % % % MJ/kg % %
DM132
DM138
WN244001
WN244002
WN244003
WN244005
WN244006
WN244009
WN244010
WN244012
WN244013 1.66 35.7 3.1 7.6 18.5 1.07 53.6
WN244014
WN244015
WN244016
WN244017
WN244018 1.73 52.9 5.1 16.7 11.5 0.61 25.4
WN244019
WN244020 1.56 32.4 4.4 24.5 20.4 1.79 38.7
WN244021
WN244022 1.47 19.9 4.2 30.1 23.9 3.09 45.8
WN244023 1.39 13.2 4.4 32.2 27.8 4.15 50.3
WN244024
WN244025
WN244026 1.69 47.5 3.5 20.0 14.7 2.52 29.0
WN244027 1.39 11.0 4.8 32.5 27.3 2.71 51.7
WN244028 1.36 14.2 1.8 31.0 27.0 1.21 53.0
WN244029 1.41 14.8 2.7 20.5 27.4 2.55 62.0
WN244030
WN244031
WN244032
WN244033
WN244036
WN244039 2.04 73.0 2.9 8.5 4.0 1.38 15.6
Mean_Value!!: 1.61 36.1 3.7 21.8 18.5 2.08 38.5
Max_Value!!!: 2.04 73.0 5.1 32.5 27.8 4.15 62.0
Min_Value!!!: 1.36 11.0 1.8 7.6 4.0 0.61 15.6
No.!Samples!: 10 10 10 10 10 10 10
SEAM!M
Borehole RD AS IM VM CV TS FC
Name gm/cc % % % MJ/kg % %
DM132
DM138
DMMT344
WN244001
WN244002
WN244003
WN244005
WN244006
WN244009 1.85 59.3 3.2 12.6 10.1 0.65 24.9
WN244010 1.82 49.7 3.1 14.3 14.1 0.33 32.9
WN244012 2.12 72.6 3.4 9.8 5.4 0.16 14.2
WN244013 1.76 45.5 3.9 16.9 14.8 0.76 33.6
WN244014 1.74 45.6 3.0 12.3 14.4 0.82 39.0
WN244015 1.71 42.9 4.4 18.0 15.3 1.03 34.7
WN244016 1.67 36.8 4.8 15.1 17.3 0.79 43.4
WN244017 1.73 42.4 3.9 18.1 15.3 0.59 35.7
WN244018 1.69 39.7 4.9 15.1 16.0 0.89 40.3
WN244019 1.71 44.4 2.6 16.7 14.5 0.59 36.3
WN244020 1.76 48.2 4.3 17.2 13.6 1.18 30.3
WN244021 1.86 57.1 7.1 7.6 8.9 0.66 28.2
WN244022 1.72 41.4 4.2 18.5 15.6 0.93 35.8
WN244023 1.63 33.9 4.5 19.5 18.8 1.20 42.2
WN244024 1.71 42.9 4.5 16.4 15.3 0.72 36.1
WN244025 1.64 36.5 4.1 15.8 17.8 1.79 43.6
WN244026 1.77 40.2 4.3 19.3 16.1 1.78 36.1
WN244027 1.70 38.9 4.4 20.5 16.6 0.89 36.2
WN244028 1.68 39.8 3.7 16.5 16.6 2.24 40.0
WN244029 1.67 37.5 3.7 17.3 17.4 2.77 41.5
WN244030 1.9 61.1 5.1 7.2 7.3 1.15 26.5
WN244031 1.69 42.9 3.8 16.4 15.4 2.76 36.9
WN244032 1.79 50.0 3.8 14.9 13.2 0.85 31.3
WN244033 1.65 36.6 4.4 16.8 17.7 1.32 42.2
WN244036 2.02 72.0 1.9 11.8 4.9 0.14 14.3
WN244039 1.77 51.7 3.0 10.2 12.7 0.54 35.1
Mean_Value!!: 1.73 44.2 4.1 15.8 14.8 1.14 35.9
Max_Value!!!: 2.12 72.6 7.1 20.5 18.8 2.77 43.6
Min_Value!!!: 1.63 33.9 1.9 7.2 4.9 0.14 14.2
No.!Samples!: 26 26 26 26 26 26 26
SEAM!B
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Figure 4.2.3_1
Typical Coal Seam Profile at Wolvenfontein
Ply A2 0.33m
Mid Seam
Bottom Seam A Unit
Bottom Seam B Unit
Bottom Seam C Unit
Bottom Seam D Unit
0.98m
Ply BB 0.80m
Ply A1 0.68m
Ply BC1 4.08m
Ply BC2 4.60m
Ply BD1 0.70m
Ply BD2 0.93m
Ply BD3 0.54m
Ply BD4 0.59m
MP
BAP
BP1
BP2
BCP
BP3
BP4
BP5
Coal
Carbonaceous shale
Tillite
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These two main seams were modelled on their own to determine the coal structure over the
project area. The Mid Seam is subdivided into three units namely:
! MT – Top coal portion
! MP – inseam parting
! MB – Bottom coal portion.
Similarly the Bottom coal seam is subdivided into 4 coal and 3 intra seam partings namely:
! BA – Bottom seam A Unit
! BP1 – Inseam parting
! BB – Bottom seam B Unit
! BP2 – Inseam parting
! BC – Bottom seam C Unit
! BP3 – Inseam parting
! BD – Bottom seam D Unit
Lastly the 4 coal units within the Bottom seam are subdivided into smaller units according to
the presence of additional inseam partings as illustrated in fig 4.2.3_1.
Sections were used across the resource area to ensure all these correlations are consistent,
and were verified against the lithological logging as well as downhole geophysical logs.
Structural models were created of each of these sets of units to enable detailed resource
reporting of seams, seam units and detailed seam splits.
The surface topography (as surveyed) was used to validate the collar elevations of the
boreholes. The collars were used together with the surface survey observations to construct
a surface topography grid in Minex on a 15x15m grid, covering all of the potential coal
resource area. In each borehole the limit of softs, weathering as well as potential free dig
depths were recorded, enabling the modelling of these layers across the resource area.
These volumes are important for mine planning purposes.
The stratigraphical sequence was verified in Minex (including gaps and overlaps) before
structural modelling commenced. Each coal seam, unit and partings were modelled on a grid
of 25x25m, based on the average borehole spacing in the project area. Roof and floor
surfaces were created in 3D for each layer, as well as a thickness grid for each seam. Coal
extrapolation was limited to 125m from the last borehole which is half the average borehole
spacing. Lastly the pre-Karoo topography surface was constructed using the Dwyka or
basement floor intersection in each borehole. The final structural model were created, using
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the topographic surface, weathering limit and basement floor as cutting surfaces to remove
coal where it intersects these surfaces.
Raw coal qualities were modelled for each seam and unit as mentioned above. Qualities
modelled are: RD (Relative density), CV (Calorific Value), AS (Ash), IM (Inherit Moisture), FC
(Fixed carbon), VM (Volatile matter) and TS (Total Sulphur). All qualities reported hereafter
are on an air dried basis. A lateral composite were calculated within Minex, based on the
seam/unit that was selected for the model. Grids for each quality variable were created on a
25x25m grid, and used to report the raw coal qualities.
Coal product washablities were performed for a number of different coal products as specified
below:
! Primary coal product at a wash RD of 1.60.
! Primary coal product at a wash RD of 1.90.
! Primary coal product at a CV of 26.0MJ/kg, and secondary product at a CV of 20.5MJ/kg.
The washability modelling was done using the washability module in Minex. Thereafter for
each product, each variable were estimated using the Minex gridding system, to enable
reporting of these qualities for each seam, unit and layer as defined.
4.2.4 Coal Resource Estimation
The main resource area was identified using the following cut-off parameters on the Bottom
seam:
! Seam thickness <1.0m excluded
! Raw ash >60% excluded
! The wetland boundary in the south and the farm boundary in the west were used to
terminate the resource extents
! The wetland in the central area was used to separate the Main Resource Area from the
Southern Resource Area (Figure 3.1.1_1).
The area to the south of the wetlands, has limited borehole coverage, including a number of
historical boreholes without analytical data. Due to the presence of some positive coal
intersections, and the proximity to the main resource area, a southern resource block could be
identified. No coal quality cut-offs were applied in defining the resource, due to limited
borehole analytical data. Coal in this area is mainly classified as an inferred resource.
Resource classification was done according to the JORC code guidelines. Borehole spacing
up to 500m was used to classify a measured resource, and up to 1000m to classify an
indicated resource. Only boreholes where the relevant seam was analysed were considered
as point observations to be used for resource classification. Figures 4.2.4_1& 4.2.4_2
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illustrate the resource class for each seam. SB is classified as measured (green) across the
resource area, whereas SM is classified mainly as measured (green) and parts as indicated
(yellow). Inferred resources are shown in grey.
Figure 4.2.4_1 Seam SB Resource Classification at
Wolvenfontein
Figure 4.2.4_2 Seam SM Resource Classification at
Wolvenfontein
In situ coal resources were reported for each seam within the resource boundary area only. A
seam thickness of less than 0.5m was excluded for both the SM and SB seams. Raw coal
qualities and RD’s were applied to the coal volumes according to the modelled grids across
the area. Average relative densities per seam/unit at Wolvenfontein are summarized in Table
4.2.4_1.
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Table 4.2.4_1
Kangala Coal Project
4.3 Gross and Mineable In-situ Resources and Raw Qualities
Gross in-situ resources for the Wolvenfontein area are presented in Table 4.3_1. Resources
are reported for both the SM and SB seams, excluding a seam thickness of less than 0.50m.
Gross in situ coal resources for the Wolvenfontein resource area amount to 67.475 million
tonnes. A geological loss of 10% for both seams is suggested in the main resource area to
make provision for potential geological losses that might occur in the area. Due to increased
uncertainty, as well as expected dolerite intrusions, a geological loss of 20% is suggested for
the southern resource area. In situ tonnes after geological and mining losses (MTIS) amount
to 51.760 million tonnes. Gross in situ tonnes and Mineable in situ tonnes are presented
below in table 4.3_1.
Seam RD Unit RD Layer RD
SM 1.61 MT 1.54 MT 1.54
MP 2.19 MP 2.19
MB 1.66 MB 1.66
SB 1.77 BA 1.83 BA1 1.79
BAP 2.05
BA2 1.71
BP1 2.04 BP1 2.04
BB 1.64 BB 1.64
BP2 2.04 BP2 2.04
BC 1.64 BC1 1.63
BCP 1.83
BC2 1.63
BP3 2.03 BP3 2.03
BD 1.82 BD1 1.77
BP4 2.03
BD2 1.76
BP5 2.07
BD3 1.75
BP6 2.00
BD4 1.75
BP7 2.00
BD5 1.75
Wolvenfontein
Average!relative!densities!per!seam/unit
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Table 4.3_1
Gross and Mineable In-Situ Coal Tonnages for Wolvenfontein
The in-situ resources for the Main Resource area (refer to Figure 3.1.1_1) with Raw coal
qualities is presented in Table 4.3_2:
Table 4.3_2
Gross and Mineable In-Situ Coal Tonnages and Raw Qualities (air-dried basis) for the Main Resource area at Wolvenfontein
Resources for the Southern resource area are presented in Table 4.3_3.
Table 4.3_3
Gross and Mineable In-Situ Coal Tonnages and Raw Qualities (air-dried basis) for the Southern Resource area at Wolvenfontein
Both coal seams are subdivided into a number of units and partings as described in detail
under 4.2.3 and illustrated in Fig 4.2.3_1. A summary of the resources for the Major Coal
Units and partings within the Wolvenfontein Main Resource Area is presented in Table 4.3_4.
SEAM CLASS GROSS Geological! In!situ Mining Mineable!In!situ
In!situ!Tonnes Loss Tonnes Loss Tonnes
SM MEASURED !927!000 10% 834!300 10% !750!870
SM INDICATED !125!000 10% 112!500 10% !101!250
SM INFERRED 1!249!000 20% 999!200 10% !899!280
TOTAL!SM 2!301!000 1!946!000 1!751!400
SB MEASURED 34!257!000 10% 30!831!300 10% 27!748!170
SB INFERRED 30!917!000 20% 24!733!600 10% 22!260!240
TOTAL!SB 65!174!000 55!564!900 50!008!410
TOTAL!SEAMS 67!475!000 57!510!900 51!759!810
MAIN!RESOURCE!AREA
AREA SEAM CLASS GROSS Geological! In!situ Mining Mineable!In!situ SEAM_THICK RD CV AS IM VM FC TS
NAME In!situ!Tonnes Loss Tonnes Loss Tonnes (m) (MJ/kg) (%) (%) (%) (%) (%)
Resource SM MEASURED !927!000 10% 834!300 10% 750!870 0.98 1.52 21.1 29.5 3.8 24.3 42.4 2.24
Resource SM INDICATED !125!000 10% 112!500 10% 101!250 0.98 1.68 15.7 42.6 4.1 13.5 39.5 1.09
TOTAL!SEAM SM TOTAL!SEAM 1!052!000 946!800 852!120
Resource SB MEASURED 34!257!000 10% 30!831!300 10% 27!748!170 14.05 1.73 14.9 43.8 4.1 16.2 35.9 1.21
TOTAL!SEAM SB TOTAL!SEAM 34!257!000 30!831!300 27!748!170
TOTAL!SEAMS TOTAL!SEAMS 35!309!000 31!778!100 28!600!290
RAW!COAL!QUALITY
AREA SEAM CLASS GROSS Geological In!situ Mining Mineable!In!situ SEAM_THICK RD CV AS IM VM FC TS
NAME In!situ!Tonnes Loss Tonnes Loss Tonnes (m) (MJ/kg) (%) (%) (%) (%) (%)
SouthRes SM INFERRED 1!249!000 20% !999!200 10% !899!280 1.30 1.93 8.0 63.1 2.9 11.1 22.9 1.48
SouthRes SB INFERRED 30!917!000 20% 24!733!600 10% 22!260!240 17.50 1.76 13.0 49.8 3.5 11.4 35.4 0.94
TOTAL 32!166!000 25!732!800 23!159!520
RAW!COAL!QUALITY
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Table 4.3_4
Gross In-Situ Coal Tonnages and Raw Qualities (air-dried basis) for the Major Coal Units and Partings within the Main Resource Area at Wolvenfontein
MAJOR!COAL!UNITS!AND!PARTINGS
CLASS SEAM INSITU_TONNES AREA COAL_AREA COAL_VOLUME SEAM_THICK RD CV AS IM VM FC TS
MT !867!400 1!446!992 986!557 599!454 0.61 1.44 24.4 19.4 4.1 26.2 50.2 2.32
MP !169!500 1!446!992 634!975 77!455 0.12 2.19 1.1 87.1 2.5 6.8 3.6 0.60
MB !139!600 1!446!992 711!297 89!615 0.13 1.53 22.0 25.2 5.1 25.6 44.1 1.93
TOTAL!PARTING !169!500
TOTAL!COAL 1!007!000
TOTAL!SEAM 1!176!500
BA 2!733!700 1!446!992 1!293!722 1!515!767 1.17 1.8 12.8 49.4 3.8 16.3 30.5 1.63
BP1 !857!900 1!446!992 1!279!333 417!793 0.33 2.05 4.3 74.2 3.0 11.2 11.5 0.90
BB 1!669!600 1!446!992 1!291!845 1!033!869 0.80 1.61 18.9 32.7 4.8 20.0 42.5 1.40
BP2 !881!200 1!446!992 1!323!750 432!311 0.33 2.04 4.1 73.3 2.9 12.2 11.6 1.50
BC 19!700!100 1!446!992 1!396!319 12!030!693 8.62 1.64 18.9 32.8 4.8 18.4 44.0 1.29
BP3 2!202!300 1!446!992 1!286!215 1!075!028 0.84 2.05 3.6 75.0 2.7 11.9 10.5 0.58
BD 5!778!700 1!446!992 1!253!684 3!201!749 2.55 1.80 12.6 50.2 3.1 13.8 32.9 1.10
TOTAL!PARTING 3!941!400
TOTAL!COAL 29!882!100
TOTAL!SEAM 33!823!500
TOTAL!SEAMS 35!000!000
RAW!COAL!QUALITY
RAW!COAL!QUALITY
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A summary of the resources for the individual coal plies and in-seam partings within the
Wolvenfontein Main Resource Area is presented in Table 4.3_5.
Table 4.3_5
Gross In-Situ Coal Tonnages and Raw Qualities (air-dried basis) for the Detail Coal Plies and In-seam Partings within the Main Resource Area at Wolvenfontein
The BC Unit of the Bottom seam is the most prominent and consistently developed coal ply
and represents 72% of the proposed mineable resources at Wolvenfontein.
The high quality Mid seam represents approximately 4.5% of the proposed mineable
resource.
The sulphur content and volatile matter content of the coal seams generally decreases
downwards from the Mid seam to the base of the Bottom seam.
COAL!PLYS!AND!IN!SEAM!PARTINGS
CLASS SEAM INSITU_TONNES AREA COAL_AREA COAL_VOLUME SEAM_THICK RD CV AS IM VM FC TS
MT !867!400 1!446!992 986!557 599!454 0.61 1.44 24.4 19.4 4.1 26.2 50.2 2.32
MP !169!500 1!446!992 634!975 77!455 0.12 2.19 1.1 87.1 2.5 6.8 3.6 0.60
MB !139!600 1!446!992 711!297 89!615 0.13 1.53 22.0 25.2 5.1 25.6 44.1 1.93
TOTAL!PARTING !169!500
TOTAL!COAL 1!007!000
TOTAL!SEAM 1!176!500
BA1 1!508!600 1!446!992 1!268!073 861!252 0.68 1.75 15.0 43.2 4.0 17.6 35.3 1.82
BAP !524!900 1!446!992 1!171!106 255!649 0.22 2.05 4.0 73.6 2.8 11.4 12.3 1.80
BA2 !665!200 1!446!992 1!180!490 390!713 0.33 1.70 15.9 40.4 4.3 18.8 36.5 1.17
BP1 !856!700 1!446!992 1!278!082 417!233 0.33 2.05 4.3 74.2 3.0 11.2 11.5 0.90
BB1 1!669!700 1!446!992 1!291!845 1!033!869 0.80 1.61 18.9 32.7 4.8 20.0 42.5 1.40
BP2 !880!200 1!446!992 1!323!750 431!833 0.33 2.04 4.1 73.3 2.9 12.2 11.6 1.49
BC1 9!110!800 1!446!992 1!365!665 5!577!954 4.08 1.63 19.1 32.0 5.2 18.4 44.4 1.41
BCP !177!500 1!446!992 1!271!826 95!754 0.08 1.85 10.6 55.8 3.2 16.3 24.7 0.62
BC2 10!341!900 1!446!992 1!370!670 6!311!456 4.60 1.64 18.9 33.1 4.4 18.2 44.4 1.20
BP3 2!202!300 1!446!992 1!286!215 1!075!028 0.84 2.05 3.6 75.0 2.7 11.9 10.5 0.58
BD1 1!518!900 1!446!992 1!241!798 866!549 0.70 1.75 14.2 45.7 3.3 14.3 36.7 1.21
BP4 !606!000 1!446!992 1!131!068 293!595 0.26 2.07 5.3 71.8 2.6 11.9 13.7 0.31
BD2 1!866!000 1!446!992 1!154!841 1!071!047 0.93 1.74 15.1 42.6 3.2 13.7 40.5 1.17
BP5 !702!800 1!446!992 743!202 336!166 0.45 2.09 2.8 78.7 2.9 11.0 8.1 0.60
BD3 !742!500 1!446!992 775!733 419!860 0.54 1.77 14.6 45.4 3.4 16.1 35.2 0.75
BP6 !75!600 1!446!992 462!312 37!827 0.08 !!!!!!!!! !!!!!!!!!! !!!!!!!!!! !!!!!!!!!! !!!!!!!!! !!!!!!!!!
BD4 !174!000 1!446!992 511!108 99!471 0.19 !!!!!!!!! !!!!!!!!!! !!!!!!!!!! !!!!!!!!!! !!!!!!!!! !!!!!!!!!
BP7 !9!500 1!446!992 114!483 4!783 0.04 !!!!!!!!! !!!!!!!!!! !!!!!!!!!! !!!!!!!!!! !!!!!!!!! !!!!!!!!!
BD5 !92!600 1!446!992 132!625 52!947 0.40 !!!!!!!!! !!!!!!!!!! !!!!!!!!!! !!!!!!!!!! !!!!!!!!! !!!!!!!!!
TOTAL!PARTING 6!035!500
TOTAL!COAL 27!690!200
TOTAL!SEAM 33!725!700
TOTAL!SEAMS 34!902!200
RAW!COAL!QUALITY
RAW!COAL!QUALITY
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4.4 Physical Seam Characteristics
The following sections provide details of the physical characteristics for the various coal
seams present at Wolvenfontein.
Mid Seam
The Mid seam occurs from 10m below surface to in excess of 40m below surface within
basement lows in the northern and central part of the area (Figure 4.4_1). The average depth
for the Mid seam is approximately 31 m below surface.
Figure 4.4_2 illustrates the distribution and thickness of the Mid seam at Wolvenfontein. The
Mid seam varies in thickness from 0.5 m to 2.50 m and is absent or eroded along the
basement highs in the central and southern part of the Main Resource area.
Bottom Seam
The Bottom seam is present from 10m below surface in the southwest of the Main Resource
area to up to 50m below surface within basement lows in the northern and central part of the
Figure 4.4_1 Mid Seam Depth below Surface at Wolvenfontein
Figure 4.4_2 Mid Seam Thickness at Wolvenfontein
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deposit (Figure 4.4_3). The average depth for the Bottom seam is approximately 36 m below
surface.
Figure 4.4_4 illustrates the thickness of the Bottom seam at Wolvenfontein. The Bottom seam
varies in thickness from 6.0 m to up to 30.0 m within a prominent basement low in the
northeast of the Main Resource area, averaging 14.05 m in thickness.
Figure 4.4_3 Bottom Seam Depth below Surface at Wolvenfontein
Figure 4.4_4 Bottom Seam Thickness at Wolvenfontein
4.5 Coal Quality and Products
Coal washability was performed as described in paragraph 4.2.3. Wash product yields and
qualities are reported for the different selections at different wash products. Table 4.5_1
provides a summary of the coal qualities for the relevant seams, units and layers within the
Northern Resource area at Wolvenfontein. Table 4.5_2 provides a summary of the coal
qualities for the proposed mining units in the Northern Resource area at Wolvenfontein. For
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Table 4.5_1
Washabilities for the Detail Coal Plies and In-seam Partings within the Northern Resource Area at Wolvenfontein (Air-dried basis)
Table 4.5_2
Washabilities for the Selected Mining Units within the Main Resource Area at Wolvenfontein (Air-dried basis)
COAL!PLYS!AND!IN!SEAM!PARTINGS
CLASS SEAM INSITU_TONNES PYL PCV PAS PIM PVM PTS PWD PYL PCV PAS PIM PVM PTS PWD PYL PCV PAS PIM PVM PTS PWD SYL SCV SAS SIM SVM STS SWD
MT !867!400 77.2 27.5 11.7 4.1 31.0 2.52 1.60 79.8 27.1 12.8 4.1 30.7 2.75 1.90 70.0 27.1 13.3 3.7 30.4 2.9 2.24 14.1 !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!!
MP !169!500 0 !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! 1.60 0 !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! 1.90 0 !!!!!!!!!! !!!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! 0 !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!!
MB !139!600 73.7 !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! 1.60 92.0 !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! 1.90 49.8 !!!!!!!!!! !!!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! 44.5 !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!!
TOTAL!PARTING !169!500
TOTAL!COAL 1!007!000
TOTAL!SEAM 1!176!500
BA1 1!508!600 24.4 23.6 21.2 4.5 26.4 3.14 1.60 48.8 20.1 29.9 4.3 22.3 2.54 1.90 11.5 26.0 16.5 3.9 30.0 2.95 1.47 24.6 20.5 28.6 4.4 22.2 2.87 1.75
BAP !524!900 0 !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! 1.60 0 !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! 1.90 0 !!!!!!!!!! !!!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! 0 !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!!
BA2 !665!200 21.8 21.1 24.7 4.2 25.0 1.35 1.60 60.3 18.1 35 4.1 20.7 1.24 1.90 12.1 26.0 16.4 4.5 28.7 1.62 1.48 22.2 20.5 29.4 4.2 22.2 1.17 1.64
BP1 !856!700 0 !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! 1.60 0 !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! 1.90 0 !!!!!!!!!! !!!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! 3 !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!!
BB1 1!669!700 46.2 23.8 21.2 5.2 24.2 1.08 1.60 71.7 21.6 26.4 5.0 22.4 1.08 1.90 24.9 26.0 16.6 5.1 26.9 1.15 1.52 38.9 20.5 28.9 4.9 20.6 1.01 1.79
BP2 !880!200 0 !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! 1.60 0 !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! 1.90 0 !!!!!!!!!! !!!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! 0 !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!!
BC1 9!110!800 46.0 25.5 17.1 5.7 21.8 0.94 1.60 74.3 22.4 24.4 5.4 20.4 1.04 1.90 38.7 26.0 16.2 5.7 22.3 0.92 1.59 21.6 20.6 28.3 5.1 19.5 1.17 1.75
BCP !177!500 0 !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! 1.60 0 !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! 1.90 0 !!!!!!!!!! !!!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! 0 !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!!
BC2 10!341!900 44.3 24.4 19.9 4.5 21.3 0.87 1.60 81.4 20.6 28.8 4.4 19.1 0.83 1.90 22.5 26.0 16.2 4.5 22.2 0.96 1.50 41.5 20.5 29.3 4.5 18.9 0.85 1.77
BP3 2!202!300 0 !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! 1.60 0 !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! 1.90 0 !!!!!!!!!! !!!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! 0 !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!!
BD1 1!518!900 17.5 21.8 26.3 3.7 16.9 1.27 1.60 39.4 17.8 35.6 3.8 15.1 1.05 1.90 6.3 !!!!!!!!!! !!!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! 15.8 20.5 29.4 3.7 15.9 1.25 1.65
BP4 !606!000 0 !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! 1.60 0 !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! 1.90 0 !!!!!!!!!! !!!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! 0 !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!!
BD2 1!866!000 25.2 22.8 23.4 3.5 17.3 0.85 1.60 62.8 19.4 31.9 3.2 15.1 1.07 1.90 7.1 26.0 15.1 3.5 20.3 1.51 1.42 39.4 20.5 29.0 3.3 15.3 1.00 1.79
BP5 !702!800 0 !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! 1.60 0 !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! 1.90 0 !!!!!!!!!! !!!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! 0 !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!!
BD3 !742!500 8.5 !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! 1.60 30.3 !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! 1.90 3.2 !!!!!!!!!! !!!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! 9.8 !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!!
BP6 !75!600 !!!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!!! !!!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!!
BD4 !174!000 !!!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!!! !!!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!!
BP7 !9!500 !!!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!!! !!!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!!
BD5 !92!600 !!!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!!! !!!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!!
PRODUCT!AT!RD!1.60 PRODUCT!AT!RD!1.90 PRODUCT!AT!CV!26.0 SECONDARY!PRODUCT!AT!CV!20.5
PRODUCT!AT!RD!1.60 PRODUCT!AT!RD!1.90 PRODUCT!AT!CV!26.0 SECONDARY!PRODUCT!AT!CV!20.5
MINING!SELECTIONS
CLASS SEAM INSITU_TONNES PYL PCV PAS PIM PVM PTS PWD PYL PCV PAS PIM PVM PTS PWD PYL PCV PAS PIM PVM PTS PWD SYL SCV SAS SIM SVM STS SWD
!!!!!!!! MM 1!192!000 68.0 27.0 12.8 4.6 30.6 2.52 1.60 72.3 26.3 14.6 4.5 30.0 2.66 1.90 65.8 26.8 14.2 3.9 30.4 2.94 2.18 7.7 !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!! !!!!!!!!!
TOTAL!SEAM SM 1!192!000
!!!!!!!! MAB 6!126!000 22.1 23.9 20.9 4.9 24.8 1.66 1.60 38.8 21.1 27.6 4.7 22.3 1.59 1.90 11.8 26.0 16.5 4.7 27.9 1.94 1.50 18.8 20.5 28.9 4.8 21.1 1.52 1.70
!!!!!!!! MC1 9!110!000 46.0 25.5 17.1 5.7 21.8 0.94 1.60 74.3 22.4 24.4 5.4 20.4 1.04 1.90 38.7 26.0 16.2 5.7 22.3 0.92 1.59 21.6 20.6 28.3 5.1 19.5 1.17 1.75
!!!!!!!! MC2 10!523!000 43.6 24.4 19.9 4.5 21.3 0.87 1.60 80.0 20.6 28.8 4.4 19.1 0.83 1.90 22.1 26.0 16.2 4.5 22.1 0.97 1.50 41.3 20.5 29.3 4.5 18.9 0.84 1.76
!!!!!!!! MD 8!104!000 9.9 22.6 24.4 3.3 17.3 1.05 1.60 21.6 18.5 34.0 3.4 15.3 0.93 1.90 1.2 26.0 15.6 3.3 21.9 1.50 1.41 9.5 20.5 30.1 3.2 16.2 0.93 1.59
PRODUCT!AT!RD!1.90 PRODUCT!AT!CV!26.0 SECONDARY!PRODUCT!AT!CV!20.5PRODUCT!AT!RD!1.60
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The CV (Mj/kg) and yield distribution for the Mid Seam are illustrated in Figures 4.5_1 and 4.5_2. The
Mid seam is typically a good quality coal that yields (68%) 27.0 Mj/kg CV product with low ash, high
volatiles and high sulphur content.
Figure 4.5_1 Mid Seam CV (Mj/kg) (air-dried basis) distribution at a
wash RD of 1.60 at Wolvenfontein
Figure 4.5_2 Mid Seam Yield (%)(air-dried basis) distribution at a
wash RD of 1.60 at Wolvenfontein
The CV (Mj/kg) and yield distribution for Ply BA of the Bottom seam are illustrated in Figures
4.5_3 and 4.5_4.
The BA ply consists generally of high-ash dull coal and prominent intra-seam carbonaceous
shale parting that yields (± 50%, inclusive of the carbonaceous parting) D-grade steam coal
suitable for domestic power production (Eskom) at a wash density of 1.90.
The CV (Mj/kg) and yield distribution for Ply BB of the Bottom seam are illustrated in Figures
4.5_5 and 4.5_6.
The BB ply consists generally of dull to bright coal that yields (± 71%) D-grade steam coal
suitable for domestic power production (Eskom) at a wash density of 1.90.
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Figure 4.5_3 Bottom (Ply BA) Seam CV (Mj/kg) (air-dried basis) distribution at a wash RD of 1.90 at Wolvenfontein
Figure 4.5_4 Bottom (Ply BA) Seam Yield (%)(air-dried basis)
distribution at a wash RD of 1.90 at Wolvenfontein
Figure 4.5_5 Bottom (Ply BB) Seam CV (Mj/kg) (air-dried basis) distribution at a wash RD of 1.90 at Wolvenfontein
Figure 4.5_6 Bottom (Ply BB) Seam Yield (%)(air-dried basis)
distribution at a wash RD of 1.90 at Wolvenfontein
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The CV (Mj/kg) and yield distribution for Ply BC1 of the Bottom seam are illustrated in Figures
4.5_7 and 4.5_8.
The BC1 ply consists generally of bright coal that yields between 20% and 60% (± 39%
average) 26 Mj/kg CV primary product suitable for domestic and export steam coal markets
and an addition ± 21% secondary product suitable for domestic power generation (Eskom).
The CV (Mj/kg) and yield distribution for Ply BC2 (inclusive of the BCP parting) of the Bottom
seam are illustrated in Figures 4.5_9 and 4.5_10.
The BC2 ply consists of bright to dull coal that yields D-grade (± 80% average) steam coal
suitable for domestic power production (Eskom) at a wash density of 1.90.
Ply BD of the Bottom seam typically yields a low CV, low volatile coal.
Figure 4.5_7 Bottom (Ply BC1) Seam CV (Mj/kg) (air-dried basis) distribution at a wash RD of 1.60 at Wolvenfontein
Figure 4.5_8 Bottom (Ply BC1) Seam Yield (%)(air-dried basis)
distribution at a wash RD of 1.60 at Wolvenfontein
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4.6 Stripping Ratio and Mining Parameters
The coal at the Northern Resource area of Wolvenfontein is typically shallow and all
extractable by open-pit.
The mining selection at Wolvenfontein, based on seam thickness and product qualities, are
defined as follows (refer to Table 4.5_2):
! MM is equivalent to SM seam
! MAB is the combination of plies BA, BP1, BB, and BP2 of the Bottom seam.
! MC1 is equivalent to ply BC1 of the Bottom seam.
! MC2 is the combination plies BCP and BC2 of the Bottom seam.
! MD is the combination of the remaining BD and DP plies of the Bottom seam.
The stripping ratio, expressed as cubic metres of overburden and partings (for the
abovementioned mining selection) that need to be removed per ton of coal, is shown in Figure
5.3.1_6. The diagram illustrates that the stripping ratio is low and predominantly below 2:1,
averaging approximately 1.60:1 if the BD ply is excluded from the mining selection.
Figure 4.5_9 Bottom (Ply BC2) Seam CV (Mj/kg) (air-dried basis) distribution at a wash RD of 1.90 at Wolvenfontein
Figure 4.5_10 Bottom (Ply BC2) Seam Yield (%)(air-dried basis)
distribution at a wash RD of 1.90 at Wolvenfontein
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Figure 4.6_1 Map Showing the Stripping Ratio for the Mining Selection (cubic
metres/tonne) at Wolvenfontein
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5 MIDDELBULT AND MODDERFONTEIN COAL RESOURCES
5.1 Sample Data Assumptions for Modelling Purposes
The assumptions made in compiling the physical and analytical models based primarily on the
historical data are that:-
! All data from previous drilling and sampling was reliable.
! The boreholes had been accurately surveyed.
! All sampling was correctly labelled and reported against the correct sample ID’s.
! Core recoveries and core losses were accurately determined.
! The laboratory results were correctly reported.
5.2 Methodology
5.2.1 Data Verification
For all the available data the following verification procedures were conducted where
appropriate. The borehole logs and tables in the geological reports were verified and
captured into an excel database. All available hard copy borehole logs were checked against
the digital database. This database was made read only to prevent any of the data being
corrupted. The database consisted of the borehole name, the X & Y co-ordinates, the collar
elevation, the depth to the roof and floor of each seam. From this information the widths of
each seam as well as the elevations of the roof and floor of each seam were calculated.
The analytical data was captured in a similar manner but in three CSV files, a header record,
a samples record and an analyses record. These files were also made read only to prevent
data being corrupted. A number of check algorithms were run to check for negative seam
widths and partings. The algorithms standardise wash fractions, calculate raw Relative
Densities (“RD”) from proportion of raw ash in the samples as well as using the standard
methodologies for compositing samples using width and raw RD using
WashProduct ®.software.
The analyses files were read into a database for verification, composting and washing
simulation. Numerous check routines verified the data, composited the samples as well as
simulating and reporting quality outputs. The mining block limitations were set based on the
following parameters:-
! Width.
! Dolerite sill breakthroughs.
! Quality and farm boundaries. For
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5.2.2 Geological Modelling
Geological modelling was performed using 3D Surfer Software ®. All roof and floor elevations
were gridded using a normalised kriging algorithm. Grid sizes were determined by borehole
spacing and a minimum grid size of 25 metres. Grids in areas that did not meet the minimum
criteria were excluded from the coal resource area and were blanked out. (Seam width of 1m,
Dry Ash Free Volatile Material (DAFVM) of 26%, CV 16MJ/kg). Volumes were then calculated
for each of the coal resource blocks by subtracting the elevation floor grid from the elevation
of the roof grid surface. The volume was then multiplied by the average Raw RD to calculate
the Gross In-situ Tonnage (GIST).
5.2.3 Coal Resource Estimation
Only the estimated geological loss factor was taken into account to determine a mineable
tonnes in-situ (MTIS) resource for each resource block. This factor accounts for losses that
may occur resulting from geological features that have not been identified from the current
borehole spacing.
Qualities and yields were simulated using the Washproduct Software®. Yields and Raw
Qualities for each resource block were simulated and then tabulated.
A number of parallel exercises were previously conducted by the author and by Coffey Mining
with other Software modelling packages such as Datamine ® and Minex ® and no significant
differences were observed.
5.3 Gross In-situ Coal Resource Volumes and Raw Qualities
The gross-in-situ volumes and raw qualities for the various coal deposits were established for
seams thicknesses in excess of 1m. The following sections give details of the coal
characteristics for the deposits of the Middelbult and Modderfontein properties.
5.3.1 Middelbult
Mid (No 4) Seam at Middelbult
Figure 5.3.1_1 illustrates that the Mid (No 4) Seam coal is shallowest in the northwest with a
depth of 12 metres below surface increasing in depth towards the south east where it exceeds
28m. The average depth for the Mid (No. 4) seam is 20m below surface.
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Figure 5.3.1_1 Map Showing the Depth to Roof Contours for Mid (No. 4) Seam at Middelbult
Figure 5.3.1_2 is a graphical interpretation of the Mid (No. 4) Seam thickness, which is best
developed in the northwest at 7.4m getting progressively thinner to the southwest at a width of
0.6m for an average width of 3.3m over the area.
Figure 5.3.1_2 Map Showing the Thickness Contours for Mid (No. 4) Seam at Middelbult
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The contoured raw CV for the Mid (No. 4) seam presented in Figure 5.3.1_3 expressed in
MJ/kg varies from 12MJ/kg to 21MJ/kg with the highest values in the south and north and an
average value of 16MJ/kg.
Figure 5.3.1_3 Map Showing the Raw Calorific Value Contours for Mid (No. 4) Seam at Middelbult
Table 5.3.1_1 gives a summary of the raw coal qualities for the Mid (No. 4) Seam coal
resources at Middelbult before modifying factors were applied to define the mineable coal
resource.
Table 5.3.1_1
Kangala Coal Project
Mid (No. 4) Seam Raw Coal Qualities at Middelbult
Seam Statistic Moisture
%
Ash
%
Volatiles
%
Fixed Carbon
%
DAF Vols
%
Sulphur
%
CV (MJ/kg)
Mid (4U + 4L) Average 3.81 36.37 25.12 34.70 41.99 2.14 17.83
Mid (4U + 4L) Maximum 5.02 41.42 30.63 45.18 42.53 3.29 25.64
Mid (4U + 4L) Minimum 3.24 19.16 23.30 31.47 40.40 1.66 15.28
The table shows that the average raw qualities are slightly below Eskom requirements. The
coal in this area has a high reactivity and with a de-stoning plant or selective mining the
quality would be acceptable to Eskom for the Lethabo Power Station.
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Bottom (No. 2) Seam at Middelbult
Figure 5.3.1_4 shows how Bottom (No. 2) Seam at Middelbult sub-outcrops in the east and
becomes progressively deeper to the west where it reaches a maximum depth of over 45
metres.
Figure 5.3.1_4 Map Showing the Depth to Roof Contours for Bottom (No. 2) Seam at Middelbult
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Figure 5.3.1_5 depicts the thickness contours for Bottom (No. 2) Seam at Middelbult.
Figure 5.3.1_5 Map Showing the Thickness of Bottom (No. 2) Seam at Middelbult
The average qualities of Bottom (No. 2) Seam at Middelbult as shown in Table 5.3.1_2 are
slightly below Eskom requirements and would possibly have to be de-stoned to increase the
Calorific Value to satisfy Eskom.
Table 5.3.1_2
Kangala Coal Project
Bottom (No. 2) Seam Raw Coal Qualities at Middelbult
Moisture
%Ash % Volatiles %
Fixed
Carbon %
DAF Vols
%Sulphur % CV (MJ/kg)
Average 3.22 39.39 15.31 42.08 26.36 1.50 17.73
Maximum 4.64 50.50 28.87 50.50 37.48 4.10 23.31
Minimum 2.64 20.43 9.80 33.80 16.25 0.77 13.42
Stripping Ratio at Middelbult
The coal at the Northern Resource area of Middelbult is typically shallow and extractable by
open-pit. For
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The all seam strip ratio, expressed as cubic metres of overburden and partings that need to
be removed per ton of coal, is shown in Figure 5.3.1_6. The diagram illustrates that the
stripping ratio is low and is predominantly below 3, whereas the South African industry uses
as rule of thumb that coal available at a ratio below 7 is suitable to open cast mining.
Figure 5.3.1_6 Map Showing the All Seam Strip Ratio at Middelbult
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5.3.2 Modderfontein
Mid (No. 4) Seam at Modderfontein
In the absence of borehole data within the granted area no iso-contours could be generated
for the Mid (No. 4) Seam, which is known to be present from boreholes on neighbouring
properties, obtained from the Geosciences Council. Table 5.3.2_1 has estimated raw coal
qualities for Mid (No. 4) Seam at Modderfontein based on the analyses of samples from the
adjoining properties.
The average qualities of the Mid (No. 4) Seam at Modderfontein are slightly below Eskom
requirements. The coal in this area has high sulphur content and would possibly have to be
de-stoned to lower the sulphur content and increase the Calorific Value to satisfy Eskom.
Table 5.3.2_1 Kangala Coal Project
Mid (No. 4) Seam Raw Coal Qualities at Modderfontein
Moisture %
Ash % Volatiles %Fixed
Carbon % DAF Vols
%Sulphur % CV (MJ/kg)
Average 3.71 32.51 21.54 42.24 33.77 2.47 19.84
Maximum 4.70 38.70 25.60 44.60 45.23 3.19 22.47
Minimum 1.80 25.50 14.90 38.47 20.50 1.48 17.49
Bottom (No. 2) Seam at Modderfontein
Table 5.3.2_2 has estimated raw coal qualities for Bottom (No.2) Seam at Modderfontein
based on the analyses of samples from the adjoining properties. The average raw qualities of
the Bottom (No. 2) Seam at Modderfontein are well below Eskom requirements and selective
mining and de-stoning would be required to increase the raw quality of the coal to an
acceptable quality for Eskom.
Table 5.3.2_2
Kangala Coal Project
Bottom (No. 2) Seam Raw Coal Qualities at Modderfontein
Moisture %
Ash % Volatiles %Fixed
Carbon % DAF Vols
%Sulphur % CV (MJ/kg)
Average 4.40 48.67 13.61 33.32 29.00 0.39 14.36
Maximum 5.90 67.10 20.26 40.83 75.04 1.23 19.15
Minimum 3.84 36.13 8.80 17.30 14.42 0.01 6.08
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Stripping Ratio at Modderfontein
In the absence of borehole data within the granted area the stripping ratio could not be
determined. However, the area shows similar seam characteristics as at Wolvenfontein and
Middelbult and it can be assumed that the stripping ratio is low, allowing for extraction of the
coal by open-cast methods.
5.4 Gross In-situ Resources
5.4.1 Relative Density
Table 5.4.1_1 summarises the relative densities used for the various seams to convert
calculated coal volumes to gross tonnes in-situ (GTIS) coal resources.
The values are derived from washing algorithms that derive the relative densities from the
percentage raw ash in the seam if it has not been reported by the laboratory.
Table 5.4.1_1 Kangala Coal Project
Relative Densities Used for the Various Seams at Middelbult
Area Seam Relative Density Used
Middelbult Mid (No. 4) Seam 1.75
Bottom (No. 2) Seam 1.74
5.4.2 Statement of Gross In-situ Resources
Table 5.4.2_1 presents the estimated gross tonnes in-situ for Middelbult.
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Table 5.4.2_1
Kangala Coal Project
Gross Tonnes In-Situ Tonnage for Middelbult
Resource Area Size
(Hectares)
Average
Width
(metres)
Volume
(‘000 m3)
Relative
Density
Gross Tonnes In-Situ
(‘000 tonnes)
Total 70.5%
Attributable
Middelbult
Mid (No. 4) Seam 187 3.74 6,987 1.75 12,227 8,620
Bottom (No. 2) Seam 171 8.45 14,488 1.74 25,208 17,772
Grand Total Middelbult 37,435 26,392
5.5 Mineable In-situ Resources
5.5.1 Minimum Mining Parameters
Introduction
In terms of the JORC and SAMREC Codes, portions of a deposit that do not have a
reasonable prospect for eventual economic extraction must not be included in the coal
resource statement. Applying minimum economic parameters to the contoured seam
characteristics in Section 5.3 provides coal resource outlines to which other conversions
factors can be applied to yield MTIS.
Mid (No 4) Seam at Middelbult
This resource area was defined by a seam width of >1m, 26% DAF volatiles and a Raw CV of
16MJ/kg. Figure 5.5.1_1 presents the result.
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Figure 5.5.1_1
Map Showing the Coal Resource Outline for the Mid (No. 4) Seam at Middelbult
Bottom (No. 2) Seam at Middelbult
This coal resource was also defined by a seam width of >1m, 26% DAF volatiles and a Raw
CV of 16MJ/kg., with the result presented in Figure 5.5.1_2.
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Figure 5.5.1_2
Kangala Coal Project
Map Showing the Coal Resource Outline for the Bottom (No. 2) Seam at Middelbult
Within these areas a 10% mining loss factor has been applied to convert global in situ coal
resources to mineable in situ coal resources to account for expected losses that are caused
by not reaching the planned, or estimated extremities of the coal seams included in the global
in situ resource.
5.5.2 Geological Loss
The geological losses applied to the various seams and in the various areas are summarised in Table 5.5.2_1. The estimated losses are based on recognised methods for applicable geological losses depending on the level of confidence in the estimated GTIS with 15% applicable for a drill density for Measured Coal Resources to 35% for Inferred Coal Resources.
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Table 5.5.2_1
Kangala Coal Project
Geological Losses Applied to the Coal Seams in the Middelbult area
Area Seam Geological Losses Assumed (%)
Middelbult Mid (No. 4) Seam 25
Bottom (No. 2) Seam 25
5.5.3 Geotechnical Considerations
The modifying factors have not included any specific geotechnical considerations, because of
the absence of such information. Any losses related to geotechnical factors are included
under geological losses and are based on historical experience. The Witbank-Springs Coal
Field has been mined for more than 100 years. Experience of mining and geological losses
due to geotechnical impacts in underground mining and opencast mining are well documented
and cognizance of this has been taken.
5.5.4 Summary of Assumptions Underlying the Mineable Coal Resource Estimation
To convert the GTIS to mineable tonnes in-situ (“MTIS”) the following assumptions and
modifying factors have been applied:-
! Raw Relative Density (RD) is based on the averages for each seam obtained from the
available analyses for each area.
! Dry ash free volatile cut off for coal resource estimation was 26% (which is the accepted
value for South African Coal when unaffected by weathering or dolerite intrusions).
! Minimum seam thickness of 1m.
! Geological losses of between 20% and 35%, depending on drilling density and coal
resource classification.
! A mining loss of 10%
! All tonnages and qualities are quoted air dry.
! Minimum CV of 16 (MJ/kg)
5.5.5 Mineable Coal Resource Statement and Classification
The Mineable Coal Resource estimate for the Middelbult area is presented in Table 5.5.5_1
together with the associated JORC and SAMREC Code resource classification. Total
attributable resources to Universal Coal are 17.815 million tonnes. Of this total the deeper
No.2 Seam accounts for 67% of the coal resource. The product quality of No. 2 Seam would
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be at a raw ash content of approximately 40%. Upgrading of coal by means of selective
mining of better quality subunits, dense medium separation or de-stoning would be required
for certain areas to achieve an Eskom quality product.
Drilling density in the Middelbult area is in the order of a 1km grid and this is sufficient to
report mostly Inferred Resources in terms of the JORC/SAMREC Code confidence levels.
The proposed additional drilling is designed to upgrade the Coal Resource classification.
Table 5.5.5_2 summarises the resources at Middelbult together with the most important coal
qualities. It is noted that the average raw volatile values are low compared to the applied dry
ash free volatile cut-off of 26% because the latter is applied after the moisture and ash
contents have been removed.
Table 5.5.5_1Kangala Coal Project
Estimated Mineable Coal Resources at Middelbult
Resource Area
Gross In-Situ Tonnes
(‘000 tonnes)
GeologicalLoss (%)
Mining Loss % Mineable In-Situ Tonnes
(‘000 tonnes)
Classification
Total Attributable to Universal Coal
Middelbult
Mid (No. 4) Seam 12,227 25 10 8,253 5,818 Inferred
Bottom (No. 2) Seam 25,208 25 10 17,016 11,996 Inferred
Grand Total Middelbult 37,435 25,269 17,815 Inferred
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Table 5.5.5_2
Kangala Coal Project
Summary of Mineable In-Situ Tonnage and Qualities at Middelbult
Seam Mineable In-Situ Tonnes (‘000 tonnes) Average Raw Coal Qualities
Total 70.5% Attributable CV (%) Ash (%) Volatiles (%) Sulphur (%)
Middelbult
Mid (No. 4) Seam Inferred 8,253 5,818 16.17 41.99 19.25 0.95
Bottom (No. 2) Seam
Inferred 17,016 11,996 17.73 39.39 15.31 1.50
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Appendix 1
Curriculum Vitae of Technical Experts
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S U M M A R Y C V – A l a n G o l d s c h m i d t
Qualifications BSc, University of Cape Town, South Africa – 1986
BSc (Hons) University of Cape Town – 1987
GDE (Postgraduate Diploma in Mining Engineering) WITS University, South Africa – 1991
Experience Alan has some 20 years experience in the minerals industry. He has been involved in exploration and mine geology. His expertise is project management, reserve, and resource estimation. Primarily he has been involved with geological block models and geostatistical resource estimation.
Employment Summary
2008 – Present
Coffey Mining, South Africa Senior Resource Geologist
2004 – 2008 SRK Consulting Associate Consultant
2001 – 2004 AST Group (GMSI) Solutions Engineer
2000 – 2001 Anglo American Corporation Senior Resource Geologist
1989 – 2000 Western Areas Limited Geologist
1988 – 1989 Johannesburg Consolidated Investments Ltd Mine Geologist
1986 – 1987 University of Cape Town Research Assistant
1983 – 1985 Harmony Gold Mine Student Geologist
Areas of Expertise Mine and Exploration Geology; Mineral Reserve and Resource reviews, estimation and classification; Geological Mapping/Logging; Database Compilation and Management.
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S U MM A R Y C V – D a w ie v a n W yk
Qualifications BSc Geology and Geography (Rhodes University)
Experience Private consulting service to the coal exploration and mining industry. Mineral rights investigations, GGT, New Minerals Development Bill. The supervision of geological functions on collieries. Departmental business plans, budgets, maintenance of mineral rights, investigations into coal bed methane and discard dumps. The provision of geological services in the form of acquisition, exploration and evaluation of potential new and group coal reserves. Maintenance and design of geological database and filing systems. Underground grade control, coal preparation, plant-mine reconciliation’s, budgeting and execution of major drilling programmes. Strategic planning, reserve rationalisation studies and computerisation of all geological data and daily production. Underground mapping, managing underground and surface diamond drilling, grade control, structural interpretations and dolomite and sinkhole investigation.
Employment Summary
1998 – present GeoCoal Services Private consulting service
1994 – 1998 Ingwe Coal Corporation Manager Geology RSA and Resources
1987 – 1994 Randcoal Services Assistant Consulting Geologist
1983-1987 Douglas Collieries Chieft Geologist
1980 – 1983 Rietspruit and Duvha Opencast Services Chief Geologist
1978 – 1980 Vandyksdrift Colliery Mine Geologist
1973 – 1978 Stilfontein Gold Mining Co (Gencor) Mine Geologist / Chief Geologist
1971 – 1973 St. Albans College Pretoria Geography and Science teacher
Areas of Expertise Extensive experience in the coal exploration and mining industry. Experience in Gold and Diamond mining.
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S U MM A R Y C V – N i c o D e n n e r
Qualifications
MBA (2000-2002) University of Potchefstroom.
B.Sc. Geology (Hons.) (1994) Rand Afrikaans University (RAU), Johannesburg. (UJ)
B.Sc. Geology (1991-1993) University of Potchefstroom.
Experience
Nico has over 14 years of experience in the mining industry, mainly on coal and platinum. During his
career he was employed as mine and exploration geologist, as well as mineral resource manager. He
was involved in numerous mining projects including opencast and underground operations as well as
shaft sinking projects and exploration projects. At Lonmin Platinum he acted as the competent person
for the reporting of resource estimations at the Marikana operations. During his career at Gemecs, Nico
has undertaken a number of coal and platinum resource estimation projects.
Employment summary
2007-Present. Gemecs (Pty) Ltd. Geological consultant
2005-2007. Lonmin Platinum. Mineral Resource Manager
2001-2005. Lonmin Platinum – Manager Geology
1998-2001. Lonmin Platinum - Mine & Snr Mine geologist.
1995-1998. Ingwe Coal (BHP) – Mine Geologist
Areas of Expertise
Resource modelling and resource estimations. Exploration and Mine Geology.
General Info
Name: Nico Johan Denner
Address: Unit 16, Building 5, Visiomed Office park, 269 Beyers Naude Drive, Blackheath Ext 1.
Registration number: SACNASP 400060/98
Membership: GSSA, SEG
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S U MM A R Y C V – K a t h l e e n B o d y
Qualifications B.S Arts and Sciences (Geology) , University of Massachusetts, USA (1986)
Registered Professional Natural Scientist (Pr.Nat.Sci.)(Registration no: 400071/07)
Experience Kathleen has 14 years in exploration and mineral resource evaluation in gold, uranium, copper, platinum and fluorite including target generation, evaluation of prospects through to pre-feasibility stage, and geological due diligence on acquisition targets. Database development and data management programs include both in prospect evaluation and regional scale mining activity. She has successfully transferred oil-field well-logging technology to the hard rock environment.
Employment
Summary
Mar 2006 – Present
Coffey Mining SA (Pty) Ltd Senior Consultant - Resources
Apr 2005 -2006
eReservation Systems, Golden Pond, Canada Geological Advisor
Nov 2004 –April 2006
Independent Researcher and Analyst/Geological Consultant
Oct 2004 - Social Research for Sustainable Development (Pty) Ltd Director
May 1998 – Nov 2004
Own Side Line Business
Nov 1995 - Apr 1998
Gold Fields Trust –Goldfields of South Africa, Foreign Ventures Senior Geologist
Feb 1995 - Nov 1995
Gold Fields Trust –Goldfields of South Africa, Witwatersrand Gold Exploration Geologist
Feb 1994 – Feb 1995
Gold Fields Trust –Goldfields of South Africa, Remote Sensing Unit Geologist
Mar 1988 – Feb 1994
Gold Fields Trust –Goldfields of South Africa, Witwatersrand Gold Exploration Post-Graduate Geologist /Geologist
Nov 1985 – Mar 1988
US Peace Corps Volunteer, Lesotho
Areas of Expertise Structural geology, geological modelling and mineral resource estimation, data management, geological due diligence
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Appendix 2 Country Profile and Explanation of Mining Title as it Applies in South Africa
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Appendix 2: Country Profile and Explanation of Mining Title as it Applies in South Africa
South Africa gained independence from Britain on 31st May 1910 and was declared a republic in 1961.
From 1948 until 1990, the South African political and legal system was based upon apartheid, a
philosophy of separate racial development, underwritten and enforced by white minority governments.
After an extended period of international political pressure and economic sanctions against South
Africa’s policies, the South African government agreed to negotiate a new democratic constitution. In
April 1994, the African National Congress (ANC) became the first democratically elected ruling party.
The new constitutional Bill of Rights provides extensive guarantees, including equality before the law
and a prohibition against discrimination; the right to life, privacy, property, freedom and security of the
person, a prohibition against forced labour; and the freedom of speech.
Economy
South Africa is considered to have the most advanced economy on the African continent and it also
provides the gateway to Sub-Saharan Africa. It is classified as a middle-income emerging market with
well developed financial, legal and judicial systems and modern infrastructure.
South Africa’s gross domestic product is estimated at US$527.4bn for 2005 with an annual real growth
rate of 4.5 per cent. South Africa’s inflation rate has decreased over the last ten years and is estimated
at 4.6 per cent for 2005. South Africa’s exports amounted to US$50.9bn for 2005.
Minerals Industry
South Africa has a mature minerals industry developed from gold and diamond discoveries in the late
1800’s. The country is the world’s largest producer of platinum, gold, chrome and vanadium and ranks
highly in the production of coal, diamonds, iron ore and other base metals. The country’s minerals
industry has primarily been developed by large mining houses over the last century. South Africa hosts
a number of large ore bodies, such as the Bushveld Igneous Complex and Witwatersrand Basin, as well
as extensive coal fields. In terms of the Mineral and Petroleum Resources Development Act 280 of
2002 (“MPRDA”) are owned by the State. Currently, the greatest risks pertaining to the mining industry
in South Africa are the uncertainties arising from the new legislation. These uncertainties relate to
security of tenure i.e. the issuing of new order rights and the conversion of old order rights, as well as
meeting the Black Economic Empowerment (“BEE”) requirements.
Mining Title
The mining industry in South Africa has traditionally been controlled by the “big six” mining houses:
Anglo American - De Beers, Gencor - Billiton, Goldfields, JCI, Anglovaal and Rand Mines, which
dominated gold, platinum, chrome, coal and base metal production in South Africa. With a new
democratic constitution and rising costs from ageing mines came sweeping changes in the industry.
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Appendix 2: Country Profile and Explanation of Mining Title as it Applies in South Africa
Historical Perspective - Legislative Development
Since about 1860, mining regulation in South Africa has continuously evolved to keep pace with
changing technological, economic, and socio-political needs to grow and sustain the country’s
world-class mining industry.
Enactment of the Minerals Act, No. 50 of 1991 (Minerals Act) marked the consolidation of a
substantial legislative modernisation that began in the 1960s. After the first democratic elections in
1994, all government policies and legislation were subject to fundamental review. A White Paper
(governmental discussion document) on minerals and mining policy was published in October
1998. Mine health and safety was given first priority with enactment of The Mine Health and
Safety Act, 1996 (Act No 29 of 1996). The Parliament of South Africa passed The Mineral and
Petroleum Resources Development Act, 2002 (MPRDA) in August 2002, which was subsequently
promulgated by the State President (Government Gazette, 1 May 2004). The MPRDA accordingly
took effect from 1 May 2004 onward.
Mineral and Petroleum Resources Development Act, 2002
The MPRDA sets out the mechanics for converting mineral rights previously held under the
Minerals Act to mineral rights recognised under the MPRDA. Accordingly, in addition to describing
the new legislation, the following sections also refer to relevant background and provisions of the
Minerals Act.
From Private Ownership to State Custodianship
Unique features of the Minerals Act were that it allowed mineral rights to be held privately and that
these rights were severable from rights to particular minerals and surface rights in a particular
property. Over the years, the South African system of mineral rights had consequently developed
into a dual system in which some mineral rights were owned by the State and some by private
holders (mostly farmers). This was on the basis that, in the South African context, mineral rights
are a common-law concept as opposed to the situation in most other countries where mineral
rights are granted by the State in terms of mineral legislation.
This concept of state custodianship of mineral rights (now embodied in the MPRDA) has now
replaced the common law principles previously embodied in the Minerals Act. Enactment of the
MPRDA now places South Africa in line with global mineral ownership principles.
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Appendix 2: Country Profile and Explanation of Mining Title as it Applies in South Africa
MPRDA - Mechanics
The two-stage system under the Minerals Act, that required consent from the mineral owner and
subsequent application to the state for a prospecting or mining authorisation, has now been replaced
under the MPRDA by providing for the Minister to grant prospecting and mining rights directly.
Prospecting and mining rights are limited real rights in respect of the minerals and the land concerned,
which entitle the holder not only to prospect or mine but to carry out all other activities incidental to
prospecting or mining. These rights can also generally be traded with the consent of the Minister.
A prospecting right may be granted for up to five years and may be renewed once for a period not
exceeding three years. Mining rights are granted for a maximum of 30 years but are renewable for an
indefinite number of further periods, each of which may not exceed 30 years. Security in the transition
between prospecting and mining is enhanced in that the MPRDA stipulates that the holder of a
prospecting right has the exclusive right to apply for and be granted a mining right.
Unlike the Minerals Act, in terms of which all applications for the same mineral on the same land have
to be treated as competing applications, the new MPRDA provides that applications received on
different dates will be dealt with in order of receipt. Only those received on the same day will
consequently become competing applications. Another important improvement over the Minerals Act is
the provision for the disclosure of prospecting information once prospecting has been completed. This
requirement should significantly reduce exploration costs in previously explored areas.
The MPRDA has allowed a significant number of international junior mining and exploration companies
to become active in the country for the first time.
Transitional Arrangements
The objects of Schedule II of the MPRDA are to:-
! ensure that security of tenure is protected in respect of prospecting and mining operations being
undertaken;
! give the holder of an old-order right an opportunity to comply with the new MPRDA; and
! promote equitable access to the nation’s mineral resources;
In order to ensure a smooth transition, all applications for prospecting permits, mining authorisations,
consent to prospect or mine, and all environmental management programmes which had been lodged
in terms of the Minerals Act, but not finalised or approved before 1 May 2004 (the date on which the
new MPRDA took effect), are regarded as having been lodged in terms of the MPRDA.
Schedule II of the MPRDA places rights previously recognised under the Minerals Act into four main
categories, three of which are particularly relevant to Injula. For
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Appendix 2: Country Profile and Explanation of Mining Title as it Applies in South Africa
The following definitions stated in Schedule II of the MPRDA are important:-
! ‘“old order prospecting right” – means any prospecting lease, permission, consent, permit or
licence, and the rights attached thereto, listed in Table 1 to this Schedule in force immediately
before the date on which this Act took effect (1 May 2004) and in respect of which prospecting is
being conducted;
! “old order right” – means an old order mining right, old order prospecting right or unused old order
right, as the case may be;
! “unused old order right” – means any right, entitlement, permit or license listed in Table 3 to this
Schedule in respect of which no prospecting or mining was conducted before this Act took effect;
Any old-order prospecting right, as substantiated by a valid prospecting permit issued in terms of the
Minerals Act, continued to be in force until 1 May 2006, subject to the terms and conditions under which
it was granted, provided that the holder lodged the right for conversion within the preceding two-year
period together with certain prescribed information. A specific requirement for conversion was that
prospecting operations must have been conducted on the property prior to conversion and certified that
the intention to continue prospecting existed.
Similarly, any old-order mining right, as substantiated by a valid mining authorisation issued in terms of
the Minerals Act, continued to be in force for a period of five years until 1 May 2009 (the effective date
of MPRDA), subject to the terms and conditions under which it was granted, provided that the holder
lodges the right for conversion within a five-year period together with certain prescribed information. Of
special importance are the requirements that mining operations must have been conducted on the
property, the intention to continue mining, as well as submission of a prescribed social and labour plan.
The applicant for conversion must also provide an undertaking that, with details of the manner in which,
he or she will give effect to the objects of the MPRDA pertaining to empowerment of HDSA and
economic growth and development.
Unused old-order rights, i.e. rights in respect of which no prospecting or mining was being conducted
immediately before 1 May 2004, continued to be in force for up to one year until 1 May 2005. Within this
period of one year, the holder of such an unused old-order right had the exclusive right to apply for a
prospecting or mining right in terms of the MPRDA.
Environmental management programmes approved in terms of the Minerals Act will remain in force
under the MPRDA.
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Appendix 2: Country Profile and Explanation of Mining Title as it Applies in South Africa
Empowerment Charter and Scorecard
Recognising South Africa’s unique history and in pursuance of the objects of the MPRDA, Section 100
requires the Minister to develop a broad-based Socio-Economic Empowerment Charter that will set the
framework, targets and timetable for effecting the entry of HDSA into the mining industry. Since it is a
specific requirement of the MPRDA that the granting of a mining right will expand opportunities for
HDSA, this important Charter was released in October 2002, well in advance of the coming into
operation of the MPRDA.
Targets, timeframes and commitments are discussed in respect of each of the following facets of
empowerment:-
! Human resource development.
! Employment equity (target: 40% participation in management by HDSA in 5 years).
! Non-discrimination against foreign migrant labour.
! Mine community and rural development.
! Housing and living conditions.
! Procurement.
! Ownership and joint ventures (target: 26% ownership by HDSA in 10 years).
! Beneficiation.
A scorecard has been developed to measure the performance of each mining company in respect of
each of these facets. In practice, this will be used to judge applications for mining rights as well as
applications for converting old-order mining licenses into new-order mining rights.
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Appendix 2: Country Profile and Explanation of Mining Title as it Applies in South Africa
Environmental Management
The MPRDA’s requirements for environmental management during prospecting and mining operations
are largely similar to those contained in the Minerals Act. However, now they have been aligned with
the principles and objectives of the National Environmental Management Act, 1998 (Act No 107 of
1998), which is the principal Act governing all environmental matters in South Africa.
Applicants for a mining right are required to conduct an environmental impact assessment and submit
an environmental management programme, while applicants for a prospecting right, mining permit or
reconnaissance permission have to submit an environmental management plan. Prospecting and
mining rights only become effective on the date that the corresponding environmental management
plan or programme has been approved.
In view of long delays, that have often been experienced during the processing of environmental
management programmes in terms of the Minerals Act, new time limits for consultation and approval,
stipulated by the MPRDA, are to be welcomed. Other government departments now have 60 days in
which to comment on environmental management plans or programmes and approval must be done
within 120 days from lodgement of the plan or programme.
Requirements for making financial provision for the remediation of environmental damage, as well as
for the issuing of a closure certificate, are now included in the MPRDA as opposed to the situation
under the Minerals Act where they were dealt with in terms of regulations issued under the Minerals
Act. New features include the requirement that financial provision must be in place before approval of
the environmental management plan or programme and the fact that application for a closure certificate
now becomes compulsory upon lapsing of the right or cessation of activities.
The Mineral and Petroleum Royalty Bill
The logical conclusion of the South African Government’s programme to reform the existing minerals
and mining laws is that the State, now the custodian of those minerals, will impose a royalty. This will
bring the South African dispensation in line with most of the other major mining jurisdictions in the
world, e.g. Canada, Australia, USA. The Government intends to provide for imposition of royalties in
the Mineral and Petroleum Royalty Bill.
The revised bill defines the base of the royalty as “the aggregate of amounts received by or accrued to
the extractor” minus beneficiation cost and transport charges between seller and buyer of the
concentrate. The off-mine charges are therefore been deductible from the royalty base. The
implementation date of the Royalty Bill was 1 May 2009, but this has been deferred to 2010.
Electronic copies of the MPRDA and other regulations can be found at the DME’s website:
www.dme.gov.za.
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Appendix 3 Prospecting Work Programme – Kangala Coal Project
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Appendix 3: Prospecting Work Programme – Kangala Coal Project
The Kangala Coal Project is located approximately 5-10km south of Delmas, Mpumalanga, South
Africa, within the Witbank Coalfield. The project comprises portions of the farms Wolvenfontein
244IR, Middelbult 235IR and Modderfontein 236IR.
Universal Coal proposes an exploration programme designed to verify historical exploration results
and determine the coal deposit limits.
The planned exploration programme is summarised below:-
Phase 1: Data review (3 months) - Completed
Involved the compilation and interpretation of all available historical information and the estimation
of the coal resource base and the coal deposit limits.
Kangala Coal Project
Data Review Budget
Activity Cost (Rands)
Data Acquisition Completed
Data Compilation Completed
Geological Modelling, resource estimation and Competent Persons Report Completed
Equipment and Tools Completed
Total Completed
Phase 2: Classification of Wolvenfontein as a Measured Resource (Completed)
This phase entailed drilling of diamond core holes (conventional TNW) on a 250m x 250m
staggered grid (Figure 1) over the Wolvenfontein projected coal deposit. Approximately 38 holes,
totalling 2,520m were completed at an average drill density of one hole per 12 hectares.
Approximately 660 samples of the coal seams were submitted for proximate analysis (i.e.
moisture, ash, volatile matter, fixed carbon and sulphur content of raw and washed coal) and
determination of the calorific value. Sampling was based on lithological and compositional
characteristics of the coal seams as verified by the down-hole geophysical survey (density) data. .
Kangala Coal Project
Phase 2 Budget
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Appendix 3: Prospecting Work Programme – Kangala Coal Project
Activity Cost (Rands)
Drilling (2,520m at R450/m) Completed
Down hole Geophysics Completed
Surveying Completed
Analysis (660 Samples at R3,000 per sample) incl. of check samples Completed
Geological Services (6 Months) Completed
Geological model and resource estimation Completed
Logistics, consumables Completed
Rehabilitation Completed
Total Completed
Phase 3: Additional Work Required: Middelbult, Modderfontein and southern part of
Wolvenfontein (9 months)
This phase entails infill drilling of diamond core holes (conventional TNW) on a 350m x 350m
staggered grid (Refer to Figure 2). Approximately 50 holes, totalling 2,460m are proposed to be
completed at an average drill density of 1 hole per 12 hectares. Samples (approximately 615) of
the coal seams are proposed to be submitted for proximate analysis (i.e. moisture, ash, volatile
matter, fixed carbon and sulphur content of raw and washed coal) and determination of the
calorific value. Sampling will be based on lithological and compositional characteristics of the coal
seams as verified by the down-hole geophysical survey (density) data.
Kangala Coal Project
Phase 3 Budget
Activity Cost (Rands)
Drilling (2,460m at R450m) 1,312,000
Down hole Geophysics 80,000
Surveying 10,000
Analysis (615 Samples at R3,000 per sample), incl. of check samples 1,875,000
Geological Services (3 Months) 150,000
Geological model and resource estimation (inclusive of CPR) 300,000
Logistics, consumables 50,000
Rehabilitation 30,000
Total 3,807,000
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Appendix 3: Prospecting Work Programme – Kangala Coal Project
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Figure: 1 Map Showing the Planned Drill Grid for Phase I Exploration
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Figure: 2 Map Showing the Planned Drill Grid for Phase II Exploration
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