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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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