Midwinter Resources NL (ASX: MWN) has identified an opportunity to expand its interests in the ferrous metals industry by the potential acquisition of a high-quality, metallurgical coal project, in proximity to Midwinter’s existing iron exploration assets. The details of the acquisition opportunity were included in an ASX announcement dated 31 January 2012.

Midwinter’s consultant geologist, John Doepel, of Continental Resource Management Pty Ltd (CRM), visited the project during January 2012 as part of the preliminary due diligence performed by Midwinter prior to entering into the agreement and information obtained to date on the Mpaka Metallurgical Coal Project is outlined below.

MPAKA EXPLORATION TARGET

Introduction
Midwinter Resources NL has entered into an agreement to acquire 100% of the issued capital of Teeman (Pty) Ltd, a company incorporated in Swaziland. Teeman’s principal asset is a prospecting right application over approximately 16km2 covering the Mpaka Colliery (Swaziland) which was operated by Gencor until 1992. The Mpaka Prospecting Licence Application 229/2011, lodged on 26/04/2011 by Teeman Investments Pty Ltd, is 
situated immediately to the south of the main highway that joins the capital of Mbabne and the large town of Manzini to the west with the provincial capital of Siteki and the Mozambique port of Muputo to the east. The application area contains the dormant Mpaka Coal Mine (also known as the Emaswati Colliery) within its northwest corner.

Potential Resources
The application has an area of 20.5km2, of which 19.3km2 is over the sedimentary Middle Ecca Series of the Karro Group that contains the high quality anthracite seams of the Lower Coal Zone. Within this zone, the Main Coal Seam is of prime interest. It has an average thickness of 3.7m in the Mpaka area (of one set of 25 bore-holes, 23 intersected thicknesses of the Main Coal Seam between 3.2 and 4.5m, with the other two intersection thicknesses being 2.2m and 1.6m). Within the project area, the seam dips at a shallow angle of the order of 3o to the east and is at depths below surface varying from the order of 50m in the west of the project area to the order of 300m in the east.

The pre-mining volume of The Main Seam within the application area was thus of the order of 19,300,000m2 x 3.7m (70,000,000m3). Assuming a SG of 1.5, this equates to a tonnage of the order of 105Mt. The target resource is, however, less than that, as significant mining of the seam has already occurred, and as the seam has been intruded by a number of dolerite dykes that reduce its total volume, and as de-volatized and fractured coal occurs adjacent to the dykes.

The Mpaka Mine operated from 1964 to 1992, a period of about 29 years. During 1986 it was producing at a rate of about 210,000tpa. It thus may have produced a total of the order of 6Mt coal. As, however, a room and pillar method of mining was used, perhaps pre-mining resources of up to 10Mt may have been mined or sterilized. If, say, an additional 10% of the Main Seam was affected or replaced by dolerite, then the remaining resource potential could be assumed to be of the order of 85Mt.

Published Reserves
The Swaziland Geological Survey and Mines Department, in June 2006, published a document titled “The Mineral Resources of Swaziland”. In the document, “Area 2 Mpaka Mine” is reported to contain Established (In-situ) Reserves of 55.2Mt of coal, including 41.2Mt of Reserves of Mineable coal.

Grade
The Mpaka Coal Deposit is reported in “The Mineral Resources of Swaziland” as being semi-anthracite, with a low volatile matter content of 12% to 14%, an ash content of 14%, a high heat value (29MJ/kg), low sulphur content (0.35%), and a low phosphorous content (0.01%). It is reported as having a yield of 75%.

Exploration Target
CRM has estimated an exploration target for the Mpaka Prospecting Licence Application. CRM’s estimation is summarised below.

“An exploration target for semi-anthracite coal within the Main Seam is present within the Mpaka Prospecting Licence Application. The potential coal resource within the target area is within the range of 55Mt to 85Mt at a yield of between 70% and 80%. Washed coal from the deposit is reported to have quality of the order of:
Moisture 1.3%
Ash Content 14%
Volatile Matter 13%
Phosphorous 0.01%
Sulphur 0.35%
Fixed Carbon 72%
Ash Fusion Temp. 1250oC
Calorific Value 29MJ/kg

The potential quantity and quality of the target are conceptual in nature, as, although;
numerous bore-holes have been drilled into the target Main Seam; and
Midwinter has access to some historical and published documents,
Midwinter has insufficient information to be able to estimate a Coal Resource, and it is uncertain if further exploration will result in the determination of a Coal Resource.”

Further Information
Midwinter is undertaking due diligence on the project and will release further information as it becomes available.