JOHANNESBURG - Coal of Africa (CoAL) said on Tuesday that it would be submitting an application to the Department of Mineral Resources to extend the New Order Mining Right for its Uitkomst Colliery in KwaZulu-Natal in a bid to align it with the colliery's remaining 17 years life-of-mine.
This comes as the emerging coal exploration, development and mining company released its Summary of Technical Review 2017 which details Uitkomst’s resources and reserves as at 28 February 2017, granted under the new order mining right covering 11,137 hectares, expiring in October 2023.
Uitkomst is a high grade export quality thermal coal deposit with metallurgical applications and currently sells export coal sized 0 to 40mm, as well as peas sized 10 to 25mm.
CoAL acquired 91 percent of the shares and claims in Uitkomst for R275 million from Pan African Resources PLC on 30 June 2017 with the remaining nine percent held by broad-based trusts, including employees and communities.
The colliery comprises a South Adit horizontal shaft using traditional bord-and-pillar mining methods, as well as a planned life-of-mine extension to the north on the adjacent Klipspruit Mining Area, or the North Adit.
The colliery has the required environmental and social permits in place, as well as a valid Integrated Water Use Licence (IWUL) and has applied for an amendment of its IWUL to include the North Adit.
CoAL said Uitkomst has secured long term access to the surface rights required for the colliery and will utilise the South Adit surface infrastructure and processing plant for the washing of run of mine (RoM) coal from the North Adit.
The South Adit generates an average of 45,000 tonnes of RoM coal per month from two underground sections, supplying the owner-operated processing plant.
This coal yields approximately 30,000 tonnes of saleable coal and Uitkomst also purchases RoM coal from collieries situated in the surrounding area to utilise surplus processing plant capacity.
A total of 369,895 tonnes of RoM coal was mined at Uitkomst between 1 March 2017 and 31 August 2017. The company also benefited from R60 million in positive working capital as at acquisition date resulting in positive cash flows as this is realised.
CoAL's chief executive, David Brown, said the addition of Uitkomst was a critical requirement for the company at this stage in its life cycle.
"The Colliery provides CoAL with a cash generating asset that will assist in the funding of the business while the Makhado Project is being developed, covering a significant portion of the Company’s overhead costs," Brown said.
"The high grade metallurgical coal products sold by the Uitkomst Colliery facilitates access to these markets, providing further insight while the hard coking coal marketing strategy for the Makhado Project is being finalised."