Name and Location
Boikarabelo coal project, Limpopo, South Africa.

Client
Resource Generation (ResGen).

Project Description
Boikarabelo has probable reserves of 745-million tons, a measured resource of 1.1-billion tons, an indicated resource of 551.7-million tons and an inferred resource of 1.5-billion tons.

The Boikarabelo coal seam is between 20 m and 30 m below surface, enabling low-cost, opencut mining. The seam is between 120 m and 130 m thick, with zones of varying quality thermal and soft coking coal.

The mine will be developed in a two-phased approach to limit upfront capital expenditure (capex). The first phase will deliver about 12-million tons of run-of-mine coal a year, which will equate to about six-million tons of product coal. Of this, three-million tons are destined for the export market and three-million tons will be used domestically.

Phase 2, planned for 2019, will involve ramping up production to 20-million tons of product coal.

The project includes a 36 km rail link to the existing rail network.

Boikarabelo hosts a life-of-mine of up to 100 years.

Value
ResGen has reported that it will save about $120-million in construction costs at its Boikarabelo mine, after it secured electricity supply from the grid.

The estimated capital cost for the project has now been reduced to $630-million, reflecting the flexibility by State-owned power utility Eskom and its commitment to supply power for Stage 1 of the mine development by as early as 2014.

Duration
ResGen’s black economic-empowerment (BEE) subsidiary, Ledjadja Coal, received the Boikarabelo mining rights from the Department of Mineral Resources in April 2011.

Construction of the mine is scheduled to start by the first quarter of 2013 and will take about 24 months to complete.

The mine is expected to begin production in 2015.

Latest Developments
ResGen has issued a secured debenture to Noble Resources International to raise $20-million in funding to progress the Boikarabelo coal project.

This will augment available funding and progress construction activities at its Boikarabelo coal mine, after delays in the completion of initial project debt finance.

Further, ResGen has signed an export coal offtake agreement with Noble Resources for the supply of 2.5-million tons of coal after production starts at the mine, with coal prices set to an internationally recognised index at the time of each shipment.

ResGen and Noble Resources are also discussing a strategic marketing alliance for Boikarabelo coal.

Key Contracts and Suppliers
Digby Wells Environmental (mining-right application, mine-waste licence, environmental authorisation process for power plant), RSV Enco (engineering, procurement and construction management for mine construction) and RCE (rail design and construction).

On Budget and on Time?
First production has been delayed to the first half of 2015.

Detailed mining and engineering plans have reduced the estimated first-stage cost of the mine to $630-million.

Contact Details for Project Information
ResGen (Australia), tel +61 2 9376 9000, fax +61 2 9376 9013 or email info@resgen.com.au; or (South Africa), tel +27 12 345 1057 or fax +27 86 539 3792.
Digby Wells Environmental, tel +27 11 789 9495 or +27 11 504 1400, fax +27 11 789 9498 or +27 11 504 1446, or email info@digbywells.co.za.
RSV Enco, tel +27 11 498 6010, fax + 27 11 498 6210 or email enco@rsvenco.com.
RCE, tel +27 12 450 0040 or fax +27 12 450 0060.