Coal of Africa has announced another strategic milestone in its strategy to grow into a significant coking coal producer in South Africa.
Its resource and reserve estimate at the Greater Soutpansberg project area, located in the Limpopo Province, has increased by more than 1.3bn mineable tonnes in situ across the measured, indicated and inferred resource categories, largely as a result of the firm's acquisition of assets formerly owned by mining groups Rio Tinto and Kwezi Mining.
The company is currently conducting additional exploration drilling and further increases in the estimated coal resources are anticipated upon completion.
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The update resource estimate includes a 429% increase in the gross tonnes in situ from 1.505bn to 7.957bn, a 404% rise in total tonnes in situ from 1.279bn to 6.443bn, and a 209% jump in mineable tonnes in situ from 0.648bn to 2.004bn. The total licensed area covers 99,719 hectares.
Following the acquisition, the total strike drilled to the amount which is sufficient to enable declaration of resources under the JORC (Joint Ore Reserves Committee) Code has increased from 33 kilometres (km) to 68km. A further 66km of strike remains to be drilled, which the firm believes represents a substantial opportunity for further increases in the overall resource.
Chief Executive John Wallington said: "The additional prospecting rights represent an important development in the evolution of Coal of Africa and its partner Rothe Investments, by consolidating the potential coking and thermal coal assets in the Soutpansberg coalfield.
The company is well positioned to achieve its goal of creating a world class coking coal business producing in excess of 10m tonnes per annum of saleable coking coal over the next ten years. The further upside potential of export grade thermal coal and middlings from our various assets remains attractive.
"On a broader basis, we continue to focus on our near term objectives of ramping up Vele to full production, and finalising the various work streams and Definitive Feasibility Study on the Makhado Project."
The share price rose 9.42% to 37.75p by 09:23.
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