Name and Location
De Wittekrans coal project, Mpumalanga, South Africa.

Client
South Africa-focused thermal coal miner Continental Coal.

Project Description
The De Wittekrans project is located in the Ermelo coalfield, 15 km south-east of Hendrina, a town in Mpumalanga.

The total Joint Ore Reserves Committee-compliant saleable coal reserves for the coal project comprise 16.2-million tonnes of proven reserves and 27.6-million tonnes of possible coal reserves.

The project will operate as a conventional opencast and underground mine, targeting the production of 3.6-million to 4-million tonnes of run-of-mine coal over a 30-year life-of-mine, with about 27% of the total saleable reserves to be mined from the proposed opencast mine and 73% to be mined from the proposed underground mine development.

Optimisation studies envisage a phased development for the project, with an initial seven-year opencast mining operation and underground development proposed to start in the third production year, with access from the highwall. Underground mining of a conventional bord-and-pillar operation is planned, with six continuous miner sections.

Value
Preliminary optimisation work on the De Wittekrans project has indicated the potential to substantially improve the project economics and reduce capital costs through the utilisation of existing coal plants and rail sidings and/or construction of the wash plant under a build, own, operate and maintain contract.

It has concluded that capital costs could be reduced from an estimated R342-million to R161-million to first coal production. Surface infrastructure and sidings costs have fallen from R554-million to R444-million and underground development costs have remained the same at R838-million.

Duration
Subject to the receipt of regulatory approvals and market conditions, Continental Coal is expected to make a final development decision on the De Wittekrans project by the second half of 2013.

Latest Developments
The South African Department of Mineral Resources has granted Continental Coal a mining right for the De Wittekrans coal project.

The approval of the Continental Coal’s integrated water use licence, which was submitted in the fourth quarter if 2012, is expected in the first quarter of 2014.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Too early to state.

Contact Details for Project Information
Continental Coal CEO Don Turvey, tel +27 11 881 1420 or fax +27 11 881 1423.