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PETMIN LIMITED - Resource and Reserve update and Samval valuation

Release Date: 03/03/2014 17:47
Code(s): PET     PDF:  
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Resource and Reserve update and Samval valuation

PETMIN LIMITED
Incorporated in the Republic of South Africa
Registration Number 1972/001062/06
Share Code JSE: PET
ISIN: ZAE000076014
("Petmin" or "the Company")

RESOURCE AND RESERVE UPDATE AND SAMVAL VALUATION FOR
PETMIN'S SOMKHELE ANTHRACITE MINE FOLLOWING A COMPETENT
PERSON REVIEW BY SRK

SRK Consulting (South Africa) (Pty) Ltd (SRK) has completed a Competent Person Report
(CPR) of Petmin's Somkhele Anthracite Mine which includes a review of Resources and
Reserves as per the SAMREC Code and a SAMVAL valuation.

The SAMVAL evaluation for Somkhele indicated a fair value of ZAR 1 639 million and is
based on a LoM of 14 years. Somkhele is in the process of finalizing further exploration and
mine design work in order to include the resources that are currently not included in the
RoM reserves noted below. Management estimates the inclusion of these areas could further
extend the life of the operation to 19 years.

The updated Resources and Reserves are depicted below. The coal resources are reported
inclusive of the coal reserves as at 1 December 2013. The resource estimates declared by
SRK (Table 1) represent the raw resources for the full seam, including all parting material.
Resource estimates declared by Snowden (Table 2) represent only the coal, and do not
include parting material. In addition, the Snowden resource estimates and qualities are
quoted for a product wash density of 1.6 gcm3.

Table 1: Average B Seam Coal Resource Estimates and Raw Coal Qualities (adb) (SRK, Effective date 01 December 2013) 

                                                                                                Average Raw Qualities (adb) 
SAMREC      Mining         Average            Geological 
                     Seam              GTIS                   MTIS  Calorific       Ash     Volatile      Fixed     Moisture   Total                             
Category     Method            ARD                 Loss                    Value   Content       Matter     Carbon      Content Sulphur 
                                        (Mt)       (%)        (Mt)    (MJ/kg)       (%)          (%)         (%)         (%)     (%) 

Measured    OP & UG   B    1.77     47.64        5       45.26      20.46     37.08         5.64       54.55        2.63    0.63 
Indicated   OP & UG   B    1.78     12.52       10       11.26      19.36     39.84         5.39       52.45        2.32    0.64 
Inferred      OP      B    1.73     12.64       14       10.84      20.85     36.73         6.17       54.91        2.19    0.60 
TOTAL       OP & UG   B    1.76     72.80        7       67.36      20.34     37.49         5.69       54.25        2.50    0.63 

Notes: 
Areas: Emalahleni, Gwabalanda, KwaQubuka, KwaQubuka North, Luhlanga, Mahujini, Ophondweni 
Emalahleni qualities cannot be divided into separate OP and UG categories 
Resources are quoted for the full seam and include all parting material 
OP = Open Pit 
UG = Underground 
ARD = Apparent Relative Density 
adb = air dry basis 
GTIS = Gross Tonnes In Situ 
MTIS = Mineable Tonnes In Situ 
Average ARDs and qualities have been weighted by the GTIS 
Slight differences may arise due to rounding 

Table 2: Average B Seam Coal Resource Estimates (adb) (Snowden, Effective date 15 August 2006) 

                                                                                                                                         
                             Product                                                Average Product Qualities at Wash Density 1.6 gcm3  (adb) 
SAMREC      Mining                              Geological 
                     Seam    Wash      GTIS                  MTIS     Theoretical    Calorific     Ash      Volatile   Moisture       Total 
Category    Method                                Loss 
                             Density                                        Yield        Value      Content    Matter     Content       Sulphur                                  
                             (gcm3)     (Mt)       (%)        (Mt)        (%)        (MJ/kg)        (%)        (%)         (%)            (%) 
                         
Measured      OP    B       1.6     10.911       10       9.820      73.56          29.2       15.86       8.74         1.8           0.67 
Indicated     OP    B       1.6     16.568       20       13.254      72.2          29.2        16.8        9.1         1.8           0.66 
Inferred      OP    B       1.6     51.443       50       24.722      71.0          29.1        16.9        9.2         1.9           0.64 
TOTAL         OP    B       1.6     78.922       62       48.796     72.33          29.2       16.54        9.1        1.83           0.66 

                                                                                  
Notes: 
Resources for Areas 1 and 3 are reported on a coal-only basis 
OP = Open Pit 
adb = air dry basis 
GTIS = Gross Tonnes In Situ 
MTIS = Mineable Tonnes In Situ 
Slight differences may arise due to rounding 
                    
The reserve estimates declared by SRK (Table 3) represent the reserves for the full seam,
including all parting material. Reserve estimates declared by Snowden (Table 4) represent
only the coal, and do not include parting material and therefore the RoM estimates do not
represent the total minable RoM.

The reserve estimates declared by SRK have taken recent mining into account and have
further been discounted by the practical plant yield as well as the theoretical product yield to
derive the saleable tonnage. The reserve estimates declared by Snowden have been depleted
by SRK to show the current RoM estimates (coal only), but only the discount factors used
by Snowden in the 2006 CPR have been used to derive the current estimated saleable
tonnages.

Table 3: Average B Seam Coal Reserve Estimates and Saleable Coal Qualities (adb) (SRK, Effective date 01 December 2013) 

                                                                                                        Average Theoretical Product Qualities 
                                                                     Practical                                         (adb) 
                                      Previous           Current              Theoret-
 SAMREC     Mining         MTIS              Depletion             Plant                 Saleable 
                     Seam              RoM               RoM                 ical Yield               Ash    Volatile   Fixed Moisture 
 Category   Method                                                   Yield 
                                                                                                       Content Matter    Carbon  Content 
                              (Mt)     (Mt)     (Mt)     (Mt)       (%)        (%)       (Mt)      (%)      (%)      (%)      (%) 
Proved        OP      B    8.61     8.17     0.45     7.72       96       43.96       3.26    16.88     7.01    74.58     1.53 
Probable    OP & UG   B   24.28    23.04        -    23.04       96       45.35      10.03    17.77     5.59    73.33     3.31 
Proved & 
Probable     OP & UG   B   32.89    31.21     0.45    30.76       96       44.99      13.55    17.59     5.87    73.58     2.96 


Notes: 
Proved Reserves for Luhlanga 
Probable Reserves for Emalahleni, Gwabalanda, KwaQubuka, KwaQubuka North, Luhlanga, Mahujini, Ophondweni 
OP = Open Pit 
UG = Underground  
adb = air dry basis 
MTIS = Mineable Tonnes In Situ 
RoM = Run of Mine 
Average qualities have been weighted by the MTIS 
Slight differences may arise due to rounding 

Table 4: Average B Seam Coal Reserve Estimates and Saleable Coal Qualities (adb) (SRK adjustment of Snowden, Effective 01 December 2014) 

                                                                                                Average Theoretical Product Qualities (adb) 
                                         Previous             Current   Practical 
 SAMREC     Mining           MTIS               Depletion                         Saleable     Ash     Volatile    Fixed    Moisture 
                       Seam               RoM                 RoM        Yield 
 Category   Method                                                                            Content   Matter     Carbon    Content 
                                 (Mt)     (Mt)      (Mt)      (Mt)       (%)      (Mt)       (%)       (%)       (%)         (%) 
Proved        OP      B      9.820     9.33     4.65       4.68      68.6      3.21     15.86     8.74      73.60        1.8 
Probable      OP      B     13.254    12.59        -      12.59      68.6     8.638     16.80     9.10      72.30        1.8 
TOTAL         OP      B     23.074    21.92     4.65      17.27      68.6     11.85     16.40     8.95      72.85        1.8 

Notes: 
Proved and Probable Reserves for Area 1 
OP = Open Pit 
adb = air dry basis 
MTIS = Mineable Tonnes In Situ  
RoM = Run of Mine 
Average qualities have been weighted by the MTIS 
Slight differences may arise due to rounding 

The above stated reserves exclude 58 million and 64.1 million respectively of Measured and
Indicated resources and Inferred resources that were not used in the current life - of - mine
(LoM) model, as no detailed mine plans were available at the time of the CPR.

In accordance with the contents of the SAMREC and SAMVAL Codes, the CPR has been
prepared under the direction of the Competent Persons (the “CPs”) and Competent Valuator
(“CV”) who assume overall professional responsibility for the document.

The CP with overall responsibility for the CPR is Mr. Roger Dixon Pr Eng (Engineering
Council of SA, 20000060), Fellow of the Southern African Institute of Mining and
Metallurgy, who is Chairman and Corporate Consultant with SRK. Mr. Dixon is a mining
engineer with 43 years' experience in the mining industry and has supervised many due-
diligence reviews and engineering studies in Southern Africa and internationally. Mr. Dixon
also takes responsibility for the reporting of the SRK Coal Reserves.

The CP with responsibility for the reporting of the SRK Coal Resources is Mrs. Lesley
Jeffrey, Pr.Sci.Nat. (SACNASP, 400115/01). She is a member of the Geological Society of
South Africa, and a Principal Geologist with SRK. Mrs Jeffrey is a coal geologist with more
than 25 years' experience in the mining industry and has been responsible for the reporting
of Coal Resources on various properties in southern Africa during the past 29 years.

The CP with responsibility for the valuation of the project is Mr. Andrew McDonald, C Eng
(UK, 334897), a Fellow of the South African Institute of Mining and Metallurgy and
Member of the Institute of Materials, Minerals and Mining. Mr. McDonald is a fulltime
associate of SRK and a Competent Valuator (SAMVAL). He has been involved in the
financial valuation of mining-related projects for over 18 years.

The CPs noted above consent to the inclusion in the announcement of the matters based on
this information in the form and context in which it appears.

The complete SRK CPR report can be viewed on the Petmin website.

Enquiries:

Petmin
Bradley Doig
+27 11 706 1644
Media
Jonathon Rees (Communications and investor relations)
+27 76 185 1827

Sponsor and Corporate Adviser
River Group

Johannesburg
3 March 2014
         



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