Name and Location
Boikarabelo coal project, Limpopo, South Africa.

Client
Resource Generation (Resgen).

Project Description
Boikarabelo has probable reserves of 745-million tonnes, a measured resource of 1.1-billion tonnes, an indicated resource of 551.7-million tonnes and an inferred resource of 1.5-billion tonnes.

The Boikarabelo coal seam is between 20 m and 30 m below surface, enabling low-cost, opencut mining. The seam is between 120 m and 130 m thick, with zones of varying quality thermal and soft coking coal.

The mine will be developed using a two-phased approach to limit upfront capital expenditure. The first phase will deliver about 14-million tonnes of run-of-mine coal a year, which will equate to about six-million tonnes of product coal. Of this, three-million tonnes will be exported and three-million tonnes will be used domestically.

Phase 2, planned for 2020, will involve ramping up production to 20-million tonnes of product coal.

The project includes a 40 km rail link to the existing rail network.

Boikarabelo hosts a life-of-mine of up to 100 years.

Value
The estimated capital cost for the project has been reduced to $480-million, reflecting reduced costs of the coal handling and preparation plant.

Duration
Resgen’s black economic-empowerment subsidiary, Ledjadja Coal, received the Boikarabelo mining rights from the Department of Mineral Resources in April 2011.

Initial construction of the mine started in the first quarter of 2013 and is scheduled for completion by the end of 2015.

The mine is expected to begin production in the first half of 2016.

Latest Developments
Resgen has secured a loan facility of up to $113-million for the mobile equipment fleet with Komatsu Financial for its Boikarabelo coal project.

“This agreement represents several important elements for the project.  It not only secures the funding required for the mining fleet for stage one of the Boikarabelo mine development, but also establishes a key partnership for further mine expansion to occur,” says Resgen MD Paul Jury.

The transaction clears the way for final infrastructure designs and refines training and maintenance processes to start. It also provides clarity regarding to negotiations for remaining debt.

The loan facility, which will run for five-years, will result in Resgen buying the fleet equipment from Komatsu Southern Africa.

The loan is subject to several conditions, including the signing of the sale agreement for the equipment, the registration of security over the equipment and the signing of the balance of the debt required to complete project construction.

Key Contracts and Suppliers
Digby Wells Environmental (mining right application, mine-waste licence, environmental authorisation process for power plant), RSV Enco (engineering, procurement and construction management for mine construction), FLSmidth (coal handling and preparation plant), Protech Kuthele (earthworks for the rail link, the site infrastructure and roads) and RCE (rail design and construction).

On Budget and on Time?
First production has been delayed by between three and six months to the first half of 2016, following the sudden shutdown of the project's earthworks contractor Protech Khuthele.

Detailed mining and engineering plans, together with the results of tenders, have reduced the estimated first-stage cost of the mine to $480-million.

Contact Details for Project Information
Resgen (Australia), tel +61 2 9376 9000, fax +61 2 9376 9013 or email info@resgen.com.au; or (South Africa), tel +27 12 345 1057 or fax +27 86 539 3792.
Digby Wells Environmental, tel +27 11 789 9495 or +27 11 504 1400, fax +27 11 789 9498 or +27 11 504 1446, or email info@digbywells.co.za.
RSV Enco, tel +27 11 498 6010, fax +27 11 498 6210 or email enco@rsvenco.com.
RCE, tel +27 12 450 0040 or fax +27 12 450 0060.