Name and Location
Morupule South coal project, Botswana.

Client
Hodges Resources.

Project Description
The Morupule South project has a current Joint Ore Reserves Committee-compliant resource estimate (gross in situ) of 2.45-billion tons, of which 110-million tons are in the measured category, 173-million tons in the indicated category and 2.167-million tons are inferred.

A scoping study on the Morupule project has proved the economic viability of the project. The study has concluded that the project can be developed through a staged process, with the initial stage supporting an operation for the domestic/regional coal markets and a run-of-mine (RoM) ranging from 1.5-million tons to 3-million tons a year.

Value
Capital cost estimates for developing a 1.5-million-ton-a-year operation is A$55.76-million for a contractor-operator model and A$111.1-million for an owner-operator model, which includes contingencies estimated at 30% and engineering, procurement and construction management estimated at 12%.

Duration
Not stated.

Latest Developments
Hodges Resources has secured a 75% shareholding in the Morupule South coal project.

Hodges paid $500 000 on the execution of the agreement and spent a further $3-million in exploration over a two-year period.

The miner recently completed a 2 500 m drilling programme over a shallow coal area within the eastern block of the project, which completed the outstanding expenditure commitment for the joint venture.

Hodges MD Mark Major says that the project area is becoming more active, with the government of Botswana tendering the refurbishment of the Morupule A power station and announcing a request for prequalification from independent power producers for a 300 MW power development next to the nearly completed Morupule B power station.  These power stations will be less than 8 km from the proposed mine.

Developments in the rail haulage sector are also taking shape, with freight operator Transnet revealing plans to open the rail link from neighbouring South Africa's Waterberg coalfield into Botswana by 2020.

The project is moving towards feasibility study levels.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Too early to state.

Contact Details for Project Information
Hodge Resources MD Mark Major, tel +61 8 9322 6412 or email info@hodgeresources.com.au.