JOHANNESBURG (miningweekly.com) – As emerging coal miner Minergy posts its maiden results for the year ended June 30, much work has been completed in the background to bring to fruition the full potential of the Masama project, in Botswana.

So far, the potential of the resource, which was beyond expectations, had proven far superior to any other coal operations, even South Africa’s renowned coalfields, Minergy CEO Andre Boje told Mining Weekly Online on Tuesday.

Discussing the expectations and potential of the prospect, located some 50 km from Gaborone, Boje explained that of the 347-million tons of high-quality coal contained across 120 km², some 70-million tons was amenable to opencast mining and easily accessible.

To date, 74 diamond core boreholes and 22 reverse circulation boreholes have been drilled, totalling 5 570 m over an area of 147 km².

Minergy also planned to submit a mining licence application for the project by the end of this month, with expectations that the mining licence will be granted by the second quarter of 2018.

“We have engaged extensively with the various government departments and the response has been most encouraging,” Boje pointed out, noting the government’s one-stop shop approach was attracting investors into the country.

Further, a revised competent person’s report is being finalised, mine plans are in place, markets have been identified and offtake agreements are being negotiated.

Boje expects to complete the process of appointing the suppliers of the processing and wash plants, as well as appointing a mining contractor by the end of October, with three contractors and three suppliers shortlisted – all of which were South African companies.

Once the mining contractors have developed and established the mine, which will likely be in a year’s time, the low-cost, long-life opencast mine had a short lead time to production.

Initial production of 1.2-million tons of saleable coal a year at Masama is planned, ramping up, when required, to a production capacity of 2.4-million to 3.45-million tons a year during steady state, with an initial mine life of around 20 years.

With the focus shifting to coal production for supply to the regional and export markets away from coal for power generation, Boje was confident of Minergy’s favourable position to leverage both the regional and international market trends by focusing on the 18-million to 20-million-ton-a-year regional coal market with future expansion to supply the international coal markets.

In addition, Boje pointed out that Masama was 150 km to 200 km closer to the target market than other producers and had access to key infrastructure such as rail and road.

Seaborne thermal coal was now trading at more than $89/t, up from $50/t a year ago, which also bodes well for continued strength in international and regional pricing, he told Mining Weekly Online during an interview.

Meanwhile, the company is eyeing a secondary listing by July 2018 on either the JSE, the ASX or London’s Aim.

Minergy in April successfully listed on the Botswana Stock Exchange, following the raising of P72-million through a private placement.

Now, the board has also deemed it prudent to investigate the ASX and Aim as alternative listings as a means to find the right fit for the company.