Photo by: Bloomberg
JOHANNESBURG (miningweekly.com) – A recent update to the reserves estimate for dual-listed Resource Generation’s (Resgen’s) Boikarabelo coal mine has increased its measured and indicated tonnes to 994.81-million tonnes, up from the previous 664.2-million tonnes.
Its marketable coal reserves, however, decreased from 430.6-million tonnes to 267.09-million tonnes, based on an export-quality product with an average of 14% ash and an average 25.73 MJ/kg calorific value determined on an air dried (AD) basis; and a domestic power station product with an average 31.43% ash and an average 19.5 MJ/kg calorific value determined on an AD basis.
The company noted that its export/domestic business model has also resulted in a meaningful increase in the net present value (NPV) and internal rate of return (IRR) of the project, with the previously announced 2010 estimated coal resources and coal reserves being based on a single, low-quality product for sale to domestic power stations.
Its new business model has resulted in the export-quality product having an average yield of 23.68% and the domestic power station product having an average yield of 19.61%.
This equates to an overall average yield of 43.3%.
The run of mine of 616.85-million tonnes equates to a life-of-mine of more than 40 years at a yearly production rate of 15.12-million tonnes and sales for a similar period at a rate of 6.55-million tonnes a year – the company’s production target.