Wrap Text
Feasibility study delivered to Eskom and final burn test nearing completion
The Waterberg Coal Company Limited
(formerly Range River Gold Limited)
(Incorporated in Australia)
(Registration number ABN 64 065 480 453)
ASX: WCC | JSE: WCC | ISIN:
AU000000WCC9
(“WCC” or “the Company”)
ASX Release
FEASIBILITY STUDY DELIVERED
24 February 2014
TO ESKOM AND FINAL BURN TEST
NEARING COMPLETION
THE WATERBERG COAL COMPANY LETTER OF INTENT SIGNED WITH
LIMITED
ABN 64 065 480 453 ARDBEL
Level 1
Highlights
330 Churchill Avenue - Eskom Feasibility Study delivered
Subiaco WA
Australia - Final bulk sample burn test presently underway
- Final Coal Supply Agreement negotiations continue
Tel:+61 8 9200 4243 - Letter of Intent for Engineering and Procurement
Fax: +61 8 9200 4469 and Construction Contractor Signed
Contact: The Waterberg Coal Joint Venture Partners (WCJVP) are pleased
Mr Brian McMaster to report that they have completed a Feasibility Study (Study) into
Executive Chairman the development of an opencast mining operation to produce 10
million tonnes of coal (Product) per annum for Eskom for an initial
E-mail: term of 30 years.
info@waterbergcoal.com.au
The reported Mineral Resources and Ore Reserves are consistent
with, and extracted from the previous announcement “Substantial
Directors: JORC Resource Expansion Highlights World Class Project” dated
Brian McMaster 24 October 2013; and WCC’s quarterly activities report dated 31
Stephen Miller January 2014 (together, the Announcements). WCJVP is also
Mathews Phosa required to advise that: “This information was prepared and first
Jonathan Hart disclosed under the JORC Code 2004. It had not been updated
Daniel Crennan since to comply with the JORC Code 2012 on the basis that the
Scott Funston information has not materially changed since it was last reported.”
WCJVP confirms that all material assumptions underpinning the
ASX / JSE Symbol: production target as stated in the Announcements continue to
WCC
apply and have not materially changed. However, in satisfaction
of ASX Listing Rules 5.16 and 5.17, WCC restates these
assumptions and includes other assumptions relating to the
relevant production target.
Permitting
The Study has been carried out on the resources that reside within
two tenements; Smitspan 306LQ and Masssenburg 305LQ. They
are two of four tenements held under a Mining Right that the South
African Department of Mineral Rights granted in a NOMR
reference LP 30/5/1/1/2/184MR to Sekoko Coal Pty Ltd in terms of
Section 23(1) of the Mineral & Petroleum Resources Development
Act (MRPDA) over farms Smitspan 306LQ, Massenberg 305LQ,
Minnasvlakte 258LQ and Hooikraal 315LQ on 17 August 2011.
Resources and Reserves
In compliance with ASX Listing Rule 5.16; the Announcements detailed the JORC Compliant Resource
Statement as representing a substantial increase in the coal resource of the Waterberg Coal Project
Properties. This JORC Compliant Resource Statement doubled the resource of the measured resource
to 2.070 billion tonnes with total resources of 3.883 billion tonnes being covered under the tenements
under a Mining Right.
All of the coal deposits the subject of the Study comprise successions of Beaufort and Ecca Coal
Measures In the Study, SRK Consulting (Pty) Limited (December 2012) declared a coal resource of
1.183 billion tonnes (GTIS) on the two farms Smitspan 306LQ and Massenberg 305LQ only, of which
1.004 billion tonnes was in the Measured category. This Resource estimate is compliant with both the
JORC and SAMREC codes and has been signed off by Competent Person: Mr SelloNzama, PrSciNat
(SACNASP) (SRK Consulting).
The resource has been modified from a total of 1,042.57 Mt, consisting of 981.81 Mt within the
Measured and 60.76 Mt in the Indicated category. This was based on an area covering the whole
of Smitspan and the northern section of Massenberg.
The first modification was to limit the resource area to a boundary that had been laid out with
consideration to statutory mining boundaries as well as allowing room for mine infrastructure such
as: railway line, service road and water-supply lines. A total of 36.5 m was left on the eastern
boundary for infrastructure requirements.
Production Target
The Study has been undertaken in accordance with the requirements of the memorandum of
understanding entered into with Eskom Holdings Limited (Eskom) dated 23 March 2012 (as
amended) wherein, inter-alia, the WCJVP is to deliver 10 million tonnes per annum of Product (as
specified by Eskom) on a take or pay basis for an initial period of 30 years. The Study was
prepared by SRK Consulting of Johannesburg, South Africa. In developing the Study (and
production targets) to produce the Product and tonnages required by Eskom, the following
assumptions have been made:
- a mining loss of 6%, contamination of 2% and external moisture of 2% were applied to the
resource to modify into a Mineable Reserve of 896.02 Mt in the Proved category and
55.45 Mt in the Probable category. Coal blocks with yield percentage of less than 25% will
not be sent to the plant for processing. This is to minimise the quantity of feed stock
required to achieve the desired product tonnes. In order to derive Product tonnages, the
geological modelled theoretical yield was discounted for external contamination and a
Plant modifying Factor of 90% efficiency was applied;
- the production target is developed from the Mining Schedule applied to the Proved and
Probable Ore Reserves;
- all the material assumptions underpinning the production target as stated in the
Announcements continue to apply and have not materially changed;
- the Mining schedule for the Study targeted the production of a ?30.0 % ash percentage (air
dried) and a sulphur percentage of ?1.2% (air dried); and
- The estimated Proven Reserves contained within the Study are 283.75 million tonnes of
Product and the Probable reserves of 18.07 million tonnes of Product. These Reserve
estimates have been signed off by Competent Person Eddy Rikhotso, PrEng (ECSA) (SRK
Consulting).
Mining
The geotechnical investigation, concluded by Coffey Mining, included the geotechnical aspects of
both the mining and infrastructure for the Study. The report focused on the geotechnical aspects
relevant to mining and included the following:
- all available existing relevant information;
- geotechnical logging of existing drill core and dedicated geotechnical boreholes;
- laboratory testing on core samples;
- geotechnical slope design for the open pit mine based on the terrace mining method;
- geotechnical input into the mine design and mining strategy; and
- geotechnical studies for the rail siding and infrastructure.
The production volume requirements of the WCJVP mine dictate that a massive mining method be
applied. Due to the nature of the coal reserve, underground methods cannot supply the required
tonnages economically. A “total extraction” mining method is necessary in order to maximise the
recovery of the resource to meet the 10 Mtpa (product), 30-year life-of-mine project requirement.
“Terrace Mining” is the preferred mining method as it can supply the required tonnages and it is
already being successfully applied at the neighbouring Exxaro’s Grootegeluk operation. The
method is most applicable, as the 24 benches of the pit will not allow immediate waste dumping
directly over the pit (as is the case with a dragline and strip mining), and hence necessitate the use
of trucks to haul and dump the waste material on a designated area outside the pit footprint.
The mining operations will take place within Smitspan and Massenberg farms. A 36.5 m servitude
including a railway line, water supply pipeline runs along the eastern borders of Smitspan and
Massenberg and Hooikraal farms. Statutory 9 m servitude (boundary pillar) is allowed for around
the pit where no surface structure exists.
The rock mass analysis and design proposed is valid for an open excavation and is valid to
maximum depth corresponding to the depth of the deepest geotechnical borehole logged. The
maximum planned depth of the bottom coal seams along the northern boundary of Smitspan is at
240m below surface. Rock mass characterization was conducted per geotechnical unit, and the
slope design evaluated per defined geotechnical sector. This Study is therefore considered to be
adequate for a level 3 study as defined in the Guidelines for Open Pit Slope Design (2009).
The Project will employ a truck and shovel fleet for waste and coal mining. Two types of fleet will
be employed. A smaller sized fleet will be used for mining benches with thicknesses less than 3 m
and for Top Soil removal (e.g. CAT 740B ADT's matched with CAT 390DL backhoe's), and larger
sized fleet (e.g. Cat 797F Trucks matched to Cat 6090FS Shovels and CAT 789D Trucks with CAT
994FS Loaders), will be used for mining benches with thicknesses of greater than 3 m, and bulk
coal removal.
In the Study, SRK used estimates supplied for Caterpillar equipment from Barloworld Equipment
for similar projects. The equipment estimates are based on conditions as stipulated in the Original
Equipment Manufacturer (“OEM”) handbook and experience from both SRK and the Barloworld
team.
Processing
- As per Eskom’s request, the Top Coal zone is to be kept separate from the Bottom Coal
Zone.
- The coal quality data indicates that full wash is required for the top zone and a partial
wash (deshaling) will suffice for the bottom zone.
- A conventional coal density separation beneficiation plant is to be built capable of
beneficiating up to 23.5 million tonnes of raw Run of Mine Coal. Based on the latest mine
schedule requirements, at peak production four coal preparation modules are required;
each rated at 825t/h.
The Plant will consist of:
- four x 825 t/h coal preparation modules including high gravity separation utilising dense
medium cyclones;
- spirals for fine coal beneficiation (0.63 x 0.15mm);
- ultra-fine coal (0.15mm) is dewatered in a tailings thickener;
- small and fine coal products will be dewatered with vibrating basket centrifuges;
- tailings to thickener;
- filter plant to dewater thickener underflow; and
- water clarification and reticulation system.
The plant capacity is designed to achieve:
- raw coal feed rate of 22,000,000 t/a (air-dry tonnes/annum).
- plant utilisation (“on coal”) of 6,600 hours per year (550 hr/month).
As previously advised, the Study was completed pursuant to the Memorandum of Understanding
(MOU) with Eskom for the proposed Coal Supply Agreement (CSA), and is confidential.
The WCJVP are presently updating the Study which will be released as a full Bankable Feasibility
Study (BFS) on completion.
A condition precedent of the CSA is for Eskom to complete a burn test on a bulk sample of
approximately 200,000 tonnes of Product. Eskom has now taken delivery of this bulk sample for this
purpose, from Exxaro's Waterberg Grootegeluk Mine. It is expected that this Product testing will be
completed over the next few weeks.
Discussions between the WCJVP and Eskom as to the terms of the CSA are well advanced.
The Company is also very pleased to announce that it has entered into a Letter of Intent with Ardbel, a
joint venture between ELB engineering services and the DRA group, which collectively are the pre-
eminent materials handling and engineering services provider to the mining sector in South Africa as its
preferred Engineering, Procurement and Construction contractor for the proposed development of the
Waterberg Coal Project.
Stephen Miller
Director
The Waterberg Coal Company Limited
24 February 2014
JSE Sponsor
The Standard Bank of South Africa Limited
Date: 24/02/2014 12:20:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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