Go Back Email this Link to a friend


Wescoal Holdings Limited - Update On Elandspruit Mining Right

Release Date: 02/10/2013 12:30:00      Code(s): WSL     
WESCOAL HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2005/006913/06)
JSE Share code: WSL ISIN: ZAE000069639
("Wescoal? or ?the Company?)

Update on the Elandspruit Mining Right

Shareholders are referred to the SENS announcement released on 2 August 2013 in which the
completion of the acquisition of the Elandspruit Mining Right from Xstrata South Africa (Pty) Ltd
was announced. Wescoal would like to update the market progress on the project.

The Elandspruit Mining Right contains five potentially mineable coal seams which occur from sub-
outcrop to a maximum depth of about 70 metres below surface All seams are near horizontal in
attitude and appear to be devoid of geological complexities such as faulting or dolerite intrusions.
Consequently the mining approach is expected to prove relatively straightforward.

Wescoal commissioned The Mineral Corporation to undertake a Phase 1 desktop study intended
to investigate a range of conceptual mine development options as a preface to more detailed
feasibility work. The study was based on geological models which delivered the Measured Coal
Resources documented in the Competent Person?s Report of September 2012 as tabulated
below.

                     Seam                       Resources                         In situ Coal Qualities (adb)

                   Thickness                 GTIS        MTIS        IM       ASH        VM        FC        CV          TS
        Name                       RD
                       m                      Mt          Mt         %         %         %         %        MJ/kg        %

        4L            1.64         1.49      2.309       2.078       3.4      19.2      21.0      56.5       24.84      1.11
        3             0.46         1.44      0.968       0.823       2.8      15.4      30.6      51.3       27.27      2.81
        2U            1.83         1.68      6.203       5.582       2.6      35.1      20.3      42.0       18.77      1.18
        2L            2.80         1.61      9.738       8.764       3.0      29.5      20.6      46.9       21.13      0.97
        1             3.32         1.62     14.349      12.914       2.6      30.5      21.7      45.1       21.24      0.93
        Total Resources                    33.567      30.210


              RD - Relative Density, GTIS - Gross Tonnes In-situ, MTIS - Mineable Tonnes In-situ.
              IM ? Inherent Moisture, VM ? volatile matter, FC ? Fixed Carbon, CV ? Calorific Value, TS ? Total Sulphur.
              Coal Resources reported in accordance with the classification criteria of the South African Code for the Reporting of
               Mineral Resources and Mineral Reserves (the SAMREC Code 2008, as amended 2009).
              All Coal Resources classified as measured.
              Coal Resources reported on an air-dried, uncontaminated basis.
              Minimum seam thickness cut-off of 0.5m applied to the Nos 4L, 2U, 2L, and 1 Seams, with 0.4m applied to the No 3
               Seam.
              Combined geological and modelling losses of 10% applied.
              Resource estimates were prepared by Mr Mark C Stewardson of The Mineral Corporation who is registered with the
               South African Council for Natural Scientific Professions (SACNASP Reg No 400119/93) and qualifies as a Competent
               Person as defined by the SAMREC Code. Mr Stewardson consents to the inclusion of the above resource statement.


The results of the Phase 1 desktop study indicated that annual production of approximately 2
million tonnes is targetable over a 15-year mine life at an average strip ratio of 2.3:1.0 (BCM
waste:tonnes coal) for the combined seams. Mine scheduling simulations also indicated that the
grade of as-mined coal should be relatively consistent over the life-of-mine with raw qualities
averaging 21.14MJ/kg calorific value, 30.0% ash, 21.5% volatile matter and 1.08% sulphur
content (air-dried, uncontaminated basis).

The Phase 1 desktop study findings suggest that the most attractive result from a number of
alternative production scenarios was achieved in an option which envisaged marketing raw coal
from the No 1 and No 2 Lower Seams as an Eskom-type product, with raw coal from the No 3
Seam and washed coal from the No 2 Upper and No 4 Lower Seams sold into the Export/Inland
market. Further work is required to test the feasibility of this scenario.

Modelling exercises predicted that washing all mined coal for a 26MJ/kg product (adb) could
achieve an average theoretical yield of 50%. A range of processing alternatives designed to
deliver various sales options to the Export, Inland and Eskom markets are being assessed by
Wescoal. These may involve toll-treating the run-of-mine coal off-site or upgrading through a
dedicated on-site facility.

At this stage of project evaluation, no coal reserves have been declared as further work is
required to develop a final life-of-mine plan as required by the SAMREC Code (2008, as amended
2009).

Wescoal is currently progressing the required environmental authorisations in terms of the
National Environmental Management Act, National Water Act, National Environmental
Management: Waste Act and National Heritage Resources Act and has commenced negotiations
with surface right owners. These processes are expected to be completed during the first half of
2014 following which the commissioning of the Elandspruit mine will commence with production
expected to attain 200,000 tonnes per month by the last quarter of 2014.

The CEO of Wescoal Andre Boje said: ?We are very pleased with the results of the Phase 1 study.
This is a major project for Wescoal and it is receiving senior management?s full attention to ensure
it is commissioned during 2014.?

The Phase 1 desktop study referred to in this announcement is available on the Company?s
website www.wescoal.com. The Phase 1 desktop study has been prepared under the direction of
Mr. John Murphy, a director of The Mineral Corporation and a Registered Professional Natural
Scientist (SACNASP Reg. No. 400004/94). Mr. John Murphy has provided his consent for the
public reporting of the Phase 1 desktop study.



2 October 2013
Johannesburg

Sponsor
Exchange Sponsors

Date: 02/10/2013 12:30:00 Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                             . The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.


                                        
Email this JSE Sens Item to a Friend.

Send e-mail to
© 2017 SHARENET (PTY) Ltd, Cape Town, South Africa
Home     Terms & conditions    Privacy Policy
    Security Notice    Contact Details
Market Statistics are calculated by Sharenet and are therefore not the official JSE Market Statistics. The calculation/derivation may include underlying JSE data.