JOHANNESBURG (miningweekly.com) – JSE-listed minerals exploration and development company Miranda Resources on Friday reported that it has advanced towards the commissioning its first coal mine during its financial year, which ended on August 31, 2009.

Miranda had been granted its first mining right for the Sesikhona project, in KwaZulu-Natal, and work on a second mining concession, the Uithoek project, also in KwaZulu-Natal, should be finalised by early 2010. Further, the group’s third mining right at the Burnside project, in the same province, had been submitted to the Department of Mineral Resources.

Miranda argued that its coal-project pipeline over the next three years had moved up the exploration and mining value curve. Critical mass had been added through the drilling and development of existing assets, as well as through the acquisition of some significant new prospects.

The company currently held mining or prospecting rights over more than 20 different coal projects covering about 58 000 ha of land in KwaZulu-Natal alone. Including Mpumalanga and the Limpopo provinces, Miranda Coal was involved in exploration on land spanning more than 73 000 ha.

The Sesikhona mining operations were expected to start during the first quarter of 2010, subject to securing an offtake agreement. Mining-project contractor TWP Projects had completed the first phase of the Sesikhona mine plan design, including a production schedule and overburden profile.

Out of the mine’s measured reserve of 5,4-million tons, a total of 1,6-million tons have been identified for the first phase of opencast mining, giving this phase a three-year life at a production rate of 40 000 t/m. Interest has been received for selling the premium quality anthracite unwashed on a free-on-truck, ex-pit basis, but it was more likely that the coal would be “toll-washed” for a South African Development Community and/or overseas customer base, Miranda stated.

Given that the first phase was opencast, Sesikhona has low upfront capital expenditure requirements. Management will be in a position to consider a number of development options during the course of the next twelve months, subject to the exploration results on Sesikhona itself, as well as on the adjacent Dwala and nearby Majestic projects.

The Sesikhona mining plan could be extended into an underground operation depending on the results of the ongoing drilling programme. Developing the underground sections would not only extend the life of the mine, but would also provide flexibility in terms of the final product to be delivered as well as in maintaining Sesikhona’s committed production targets.

With the Uithoek mining right application having been accepted by the Department of Mineral Resources, and the environmental impact assessment (EIA) completed and submitted by Miranda, granting of the mining right was expected by early-2010 at the latest.

The project held a measured reserve of 6,7-milion tons of lean and bituminous coal, with the latter having coking properties. An additional ten holes is planned before year-end to improve coal quality and washability data, with a view to commissioning a prefeasibility study to confirm management’s internal assessment of the project’s viability.

Production of a coking coal or metallurgical export product, and of a middling product for local power stations, was targeted for the second half of 2010.

The exploration programme included considering additional drilling to extend the resource in a southwestern direction.                                                    

Burnside, which was contiguous to Uithoek, forms a significant focus for Miranda Coal with its large 35,5-million ton resource. The mining right application was submitted and has been accepted during the year under review.

Miranda stated that it had to submit its EIA by April 2010.

Production was targeted to start about 12 months after Uithoek, and many of the infrastructural decisions would be made with both projects in mind. Drilling activities for the period under review fell short of the exploration plan owing to access problems in certain areas. These ware being addressed and a further 23 holes were planned for early in 2010 to bring the openpittable section to a measured resource status.

This, the company added, would also allow for more detailed analysis to be done on determining the specific markets and other mining modifying factors, and would lead into a prefeasibility during the latter part of 2010.


“Miranda Coal, which houses all of the group’s coal projects, has a great deal of confidence in the investment opportunity presented by the exploration, development and mining of coal in northern KwaZulu-Natal. It has set itself the exciting target of opening a new coal mine every year for at least the next five years,” the company said.

The company also had the so-called Boschhoek project in its portfoliom which was expected to represent the next significant step up in the scale of Miranda Coal’s operations should it proceed. But, Boschhoek’s capital expenditure was also likely to exceed any of its other projects, with the coal resource being both larger and deeper, and mining operations likely to be mostly underground.

A number of alternatives were being considered for optimal development of the resource, including accessing it through decline shafts from either or both of the adjacent Burnside and Uithoek projects.

The 2010 exploration programme would consist of a further 10 holes, which was being planned to improve coal washability data. A fairly substantial infill drilling programme of up to 50 holes was also being planned to upgrade the resource to measured status.

The timeline on the Wasbank project, which is adjacent to both Boschhoek and Uithoek, was expected broadly to mirror that of Boschhoek. Although its scale of operations would be significantly smaller, the viability of the Wasbank project was expected to stem from its sharing of the infrastructure and beneficiation capacity of the other Miranda Coal operations in the area.                                                                      

During the period under review, Miranda reported a net loss of R10,5-million, compared with the loss of R4,3-million for the previous financial year.

Headline loss a share was down to 4,5c a share, compared with the headline loss a share of 2,1c a share, mirroring the figures for the basic earnings a share.