Joint venture (60:40) Firestone Energy and Sekoko coal
Highly prospective Waterberg coalfield in South Africa that currently supplies Eskomís coal power stations, Exports, Mittal, Implats, PPC and others.
Extent of property
The project consists of eight farms in the Waterberg coalfield totalling 7,979 hectares. The identified area over the Smitspan farm (first phase base case) indicates a mine layout covering 507 hectares extending for 3.5km east to west and 1.8km north to south. This area contains 258Mt (ROM) which will produce 120Mt of domestic coal for local power stations and a further coal of export quality coal with an average yield of 67% on selective mining basis..
Reserves and resources
Measured resource at Smitspan is now estimated at 120Mt.
Life of mine
21 years at an average stripping ratio of 2.1 on saleable tons.
Firestoneís flagship Waterberg project has completed the Bankable Feasibility Study of which the definitive feasibility study was completed in October 2010 and the Off-take agreement with Eskom was signed in January of 2011. Funding to construct the mine is currently being raised. The mining right application was submitted in July 2010 and is expected to be granted before the end of May 2011. All supporting documents including Environmental Impact Assessments and Social Labour Plan were submitted with Mining Right application.
Estimated R0.5billion (A$71.4 million) to establish the first phase of the operation while the NPV is estimated between R300 and R500 million (A$42.8 to A$71.4 million).
More on the Waterberg coalfield
The Waterberg coalfield extends for approximately 85km in a westerly direction from Lephalale and has a 40km north south extent and contains approximately 50% of South Africaís remaining coal resources with thick, near surface coal seams. The coalfield is located within the growth area for Eskom supply with the 4,800MW Medupi power station currently under construction and a further 4,000MW power station in the planning phase. Firestone is on track to start mining operations by the end of 2010. Ramp-up will be determined by the timing of offtake agreements.