JOHANNESBURG (miningweekly.com) – ASX- and JSE-listed Resource Generation (Resgen) on Tuesday said it had signed an agreement to acquire land next to the company’s Boikarabelo coal mine in Limpopo, and agreed to a put option under which it could acquire further coal tenements.
The properties being acquired are the farms Swelpan and Kleinpan, accounting for over 2 096 ha of potential prospective land at a cost of about A$4-million.
The company said Swelpan contained significant coal resources and is contiguous to its black-empowered partner Ledjadja Coal’s Boikarabelo coal tenements. The bulk of the Kleinpan property contains no defined coal resources but it provided an ideal location for the 1 320 MW power station that India-based power firm CESC proposed to build.
“This proposed power station would enable the Boikarabelo mine to start its second stage expansion earlier than originally planned,” Resgen MD Paul Jury said in a statement.
Diversified miner Exxaro Resources owns the coal tenements on four properties in the surrounding area, including those on Swelpan and Kleinpan. With the aim of acquiring these assets, Ledjadja has granted a put option to Exxaro under which Exxaro can sell the prospecting rights over the four properties to Ledjadja.
Any such transfer would be subject to approval by the Department of Mineral Resources (DMR) under the Mineral and Petroleum Resources Development Act.
The coal tenements contain an indicated resource of 974.5-million tons, excluding shale content, and the coal qualities are consistent with the rest of the Boikarabelo tenements. Should Exxaro exercise the put option and the DMR approve the transfer, the Boikarabelo mine will increase its total resource by 31% to 4.09-billion tons.
“These transactions provide two significant enhancements to shareholder value. The acquisition of the land enhances our ability to expand to Stage 2, while the additional coal tenements would deliver ideal mining synergy, enabling a continuation of the mine’s strike length in an easterly direction, enhancing efficient mining,” Jury said.
Last week, the Limpopo Department of Economic Development, Environment and Tourism approved the construction of the Boikarabelo mine, which would produce 12-million tons of coal a year, equating to around six-million tons of product coal in the first phase.