[miningmx.com] — OPTIMUM Coal said on Wednesday it has bought two prospecting rights in close proximity to its Koornfontein operations, envisaged to extend Koornfontein’s lifespan by 12 years.
In a notice to shareholders, Optimum said it concluded a deal with Umcebo Mining to acquire the rights for R420m, payable in cash from the company’s reserves.
The rights are located approximately 10km from Koornfontein, on the Mpumalanga highveld close to Ermelo, and have an in-situ coal resource of some 120 million tonnes of thermal coal, of which Optimum believes over 35 million tonnes are extractable as run-of-mine tonnage.
“In order to maximise the value of the resource, the company plans to construct an overland conveyor from the.prospecting rights area to Koornfontein, utilising Koornfontein’s processing plants to wash the coal and its rapid load-out infrastructure to load trains efficiently,’ read the statement.
It said the newly required assets would likely be mined by opencast methods, and was expected to be developed for first coal delivery in 2015.
Koornfontein’s current export life of mine from the Gloria 2 seam is around four to five years. The development of the new assets would enable the group to continue to produce saleable export coal for an additional 12 years at the current rate of 1.5 million tonnes per year.
“Additionally, over and above the export product, this resource is expected to yield some 500,000 tonnes per annum of thermal coal within Eskom quality specifications,’ read the statement.
It said the agreement is subject only to regulatory consent from the department of mineral resources for the renewal and transfer of ownership of the prospecting rights to Optimum Coal. The effective date is expected to be no later than November 2011.
“We have targeted these reserves for some time,’ said Optimum Coal CEO Mike Teke. “The prospecting rights will provide us with a critical, high value export life extension at Koornfontein Mines, unlocking the underutilised infrastructure and maximising value for the 1.5 million tonnes per year RBCT entitlement owned by Koornfontein.
“We (also) now have more flexibility to explore options to potentially provide the lower quality 4 seam coal to Eskom.’