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FSE - Firestone Energy Limited - 5.173 Billion Tonnes of coal zones in resource

Release Date: 12/08/2010 08:58
Code(s): FSE
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FSE - Firestone Energy Limited - 5.173 Billion Tonnes of coal zones in resource identified in accordance with Samrec and Jorc codes FIRESTONE ENERGY LIMITED (Registration number: ABN 058 436 794) (SA company registration number: 200/023973/10 Share code on the JSE: FSE Share code on the ASX: FSE ISIN: AU000000FSE6 ("FSE" or "the Company") 5.173 BILLION TONNES OF COAL ZONES IN RESOURCE IDENTIFIED IN ACCORDANCE WITH SAMREC AND JORC CODES The Firestone Energy Ltd/Sekoko Resources Joint Venture is pleased to announce that independent geological consulting company Venmyn Rand (Pty) Ltd have completed a significant upgrade of the shallow coal resources within the Waterberg Coal Region located at the north end of South Africa. HIGHLIGHTS Significant increase of total Coal Zone Resource to 5.173 billion tonnes (+36%) and Coal Gross Tonnes In-situ (GTIS) of 1.881 billion tonnes (+41%) compared to the October 2009 coal resource summary. The main Smitspan farm has now a Measured Resource of 238.67 million tonnes Coal GTIS (+145%) where the 21 year mine life open cast was located and highlighted within the DFS release on 29th June 2010 which included total coal sales of 120.8 million tonnes. The total measured and indicated resource at Smitspan has increased to 714.51 million tonnes (+39%) where the last 12 recent in fill holes all intersected coal. The relatively undrilled Swanepoelpan farm (4 holes) is located directly west and adjacent to the Smitspan large open cast and creates the potential to dramatically extend the DFS open cast design to the west and northwest. Please note the geological 3D Model on Page 4. The comparisons of the 2 Venmyn reports are summarised below:- August 2010 October 2009 Variance (%) (7 farms) (5 farms) ZONE COAL ZONE COAL ZONE TONNAGE COAL TONNAGE (GTIS) TONNAGE (GTIS) (GTIS) (mill (mill (mill (mill tonnes) tonnes) tonnes) tonnes) 5,173.480 1,881.679 3,802.014 1,330.576 +36% +41% August 2010 Venmyn Report Farm Zone Measured Indicated Inferred Total Tonnage GTIS GTIS Coal GTIS GTIS Coal "1" Coal Tonnage Coal "2"
Tonnage (mill (mill (mill tonnes) (mill tonnes) (mill tonnes) tonnes) tonnes)
Smitspan 1,881.758 238.668 475.844 - 714.512 Hooikraal 358.444 - 7.282 155.491 162.773 Minnasvlakte 755.805 - 26.507 230.687 257.194 Massenburg 337.034 - 20.797 109.539 130.336 Vetleegte 570.265 1.224 204.499 17.893 223.616 Swanepoelpan 1,239.974 - 1.072 378.227 379.299 Duikerfontein 30.200 - - 13.949 13.949 Total 5,173.480 239.892 736.001 905.786 1,881.679 October 2009 Venmyn Report Farm Zone Measured Indicated Inferred Total "1" GTIS GTIS Coal GTIS GTIS
Tonnage Coal Tonnage Coal "2" Tonnage (mill (mill tonnes) (mill tonnes) (mill (mill
tonnes) tonnes) tonnes) Smitspan 1,901.058 97.152 416.109 106.836 620.097 Hooikraal 358.444 - 7.282 155.491 162.773 Minnasvlakte 755.805 - 26.507 230.687 257.194 Massenburg 337.034 - 20.797 109.539 130.336 Vetleegte 449.673 - 28.873 131.303 160.176 Total 3,802.014 97.152 499.568 733.856 1,330.576 "1`` Waterberg coal typically occurs interlaminated with shale which for the most part cannot be mined separately from the coal and thus the zone gross in-situ tonnage is the tonnage of coal and shale. "2" In the interest of balanced reporting it is the Company`s intention to also report the gross in-situ tonnage of coal rather than the tonnage of coal and shale. In order to identify the gross in-situ tonnage of coal in each zone, rather than the zone tonnage including the rock, each zone tonnage was discounted by the percent yield at a relative density of 1.9, in effect, removing the influence of the shale) to derive an estimate of the coal tonnage. Since the previous announcement, considerably more analytical information has become available, Smitspan results increased from 55 to 82 boreholes with qualities, and Vetleegte from 13 to 34. This has enabled the resources on these two farms to be upgraded significantly in resource status. In-fill drilling conducted was on; Smitspan, 12 holes, including 6 large diameter holes that were subjected to rigorous coal processing test work both on size and quality analyses. These samples were also composited into the 2.5 ton sample sent for combustion tests on 4 August. Six boreholes on Vetleegte, of which 5 intersected coal and 2 on Massenberg, both intersecting coal and proving an extension of the Vetleegte low phosphorous resource. Bankable Feasibility Study The Bankable Feasibility Study currently nearing completion by Parsons Brinckerhoff has determined that the planned mining area, situated within the measured resources on the Smitspan farm, can be mined economically. This report is anticipated to be released in September 2010, once issued this final BFS report will include the definitive value of the proven reserve on the Smitspan farm. Shareholders are referred to the following website to view the 3D modelling showing all farms and zones: www.asx.com Further information can be obtained by contacting Mr John Dreyer. John Dreyer Chairman +61 (08) 9381-2755 www.firestoneenergy.com.au Competent Persons Statement Information in this announcement (and in the attached report) that relates to exploration results, coal resources or reserves on the properties Smitspan 306LQ, Hooikraal 315LQ, Minnasvlakte 258LQ, Massenburg 305LQ, Swanepoelpan 262LQ and Duikerfontein 263LQ is based on information compliled by Ms Catherine Telfer who is employed by Venmyn Rand (Pty) Ltd and is a member of The Australasian Institute of Mining and Metallurgy and the Geological Society of South Africa. Ms Telfer has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which she is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves" (The JORC Code). Ms Telfer consents to the inclusion in the announcement (and as included in the attached report) of the matters based on her information in the form and context in which it appears. About Firestone Energy Firestone Energy is an independent Australian exploration company focused on developing coal projects in South Africa. The company is currently exploring the richly endowed Waterberg coal field in the Limpopo Province of South Africa. The Company is committed to value-added growth through becoming an independent coal and energy producer at its projects in South Africa. The Company has entered into three joint ventures with Sekoko Resources, a South African black empowerment company (BEE) and Sekoko has two directors on the Board of Firestone Energy. Corporate Details ASX: FSE JSE: FSE Issued Capital: 2,331 million ordinary shares Major Shareholders: Sekoko Resources (Pty) Ltd Colbern Fiduciary Nominees Ltd Bell Potter Nominees Ltd Directors and Officers: Non Executive Directors: John Dreyer (Chairman) Timothy Tebeila (Deputy Chairman) Amanda Matthee Colin McIntyre Managing Director John Wallington Company Secretary Jerry Monzu Contact: Level 1, 63 Hay Street Subiaco, Western Australia 6008 Tel: +61 (0)8 9381 2755 Web: www.firestoneenergy.com.au Company secretary Pretoria 12 August 2010 Sponsor River Group Date: 12/08/2010 Date: 12/08/2010 08:58:01 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`). 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