Mining at Smitspan colliery to start mid 2011

[] — Firestone Energy, the Australian resources company that plans to develop coal projects in South Africa, on Tuesday said mining at the Waterberg Coal Project’s Smitspan colliery site is targeted to commence by mid 2011.

The company also announced that the application by Sekoko Coal, its black
economic empowerment partner, in the Waterberg region, for a coal mining right on
the Waterberg JV Coal project has been accepted by the Department of Mineral
Resources (DMR).

The application covers eight farms and opens the way for Sekoko Coal to submit a scoping report; consult with interested and affected parties; conduct an
environmental impact assessment and submit an environmental management

Firestone Energy said subject to the conclusion of the necessary off-take
agreements, mining at the Waterberg Coal Project’s Smitspan colliery site is targeted to commence by mid 2011 with the resource expected to be exploitable via shallow open-cast mining techniques.

At the end of June, Firestone Energy announced that it had completed the first stage of a definitive feasibility study (DFS), towards the establishment of an opencast coal mine on the Smitspan farm.

The DFS showed that the Smitspan farm contained sufficient coal to produce
around 120-milion tonnes of coal for power stations, with some of the higher-grade coal suitable for the metallurgical and the thermal export market, the company stated.

Updating the prefeasibility study released earlier by the company, the DFS showed that a standalone 1.5 million tonnes a year mine would be economically viable within the first five years.

“With the acceptance of the Mining Right application by the DMR and granting of the Mining Right expected in mid 2011, Firestone Energy is now focused on the
construction of the mine and related infrastructure to coincide with the granting of the Mining Right,” said Firestone Energy chairperson John Dreyer.

He added that the company expected to make an announcement on its chosen
mining contractor and off-take agreements before the year end.

“Management has spent much of 2009 planning the development of a ‘quick to
market’ open cut mine. If all progresses according to our schedule, Smitspan will
come into production in the second half of 2011,” said Dreyer.

At 10:33 shares in Firestone Energy were unchanged at 33 cents on the JSE.