Name and Location
Morupule South coal project, Botswana.

Client
Morupule South Resources, a joint venture (JV) comprising Hodges Resources (75%) and a private Botswana company (25%).

Project Description
The Morupule project is located to the south of the operational Morupule colliery, in central east Botswana. The project consists of one prospecting licence – PL121/2010, covering 124 km² within the eastern central district of Botswana.

The project has a current measured Joint Ore Reserves Committee-compliant resource of 110-million tonnes, with 173-million tonnes in the indicated category and 2.167-million tonnes of inferred resources.

A scoping study on the project has proved the economic viability of the project. The study has concluded that the project can be developed through a staged process, with the initial stage supporting an operation for the domestic/regional coal markets and a run-of-mine (RoM) ranging from 1.5-million tonnes to 3-million tonnes a year.

Value
Capital cost estimates for developing a 1.5-million-tonne-a-year operation is A$55.76-million for a contractor-operator model and A$111.1-million for an owner-operator model, which includes contingencies estimated at 30% and engineering, procurement and construction management estimated at 12%.

Duration
Not stated.

Latest Developments
The title transfer of the Morupule South project to Morupule South Resources has been completed.

The successful formation of the standalone entity will enable the company to better position the project to attract investment.

Hodges is aiming to secure investor interest in the project and to continue discussions on coal supply agreements. Both strategies are regarded as important steps to expedite the development of the project. Progress here will assist plans to align the project with a major power development group to fulfill the void in the regional power markets in Southern Africa.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Too early to state.

Contact Details for Project Information
Hodge Resources, + 61 8 9322 6412, fax +61 8 9322 6398 or email info@hodgesresources.com.au.