Universal Coal indicates positive economics at Kangala thermal coal mine

Sunday, 03 Jul 2011

With the draft BFS at the Kangala already showing 'positive economics the final report due in September 2011 is eagerly anticipated. Better still, drilling will commence outside the current feasibility area, potentially adding resources to the current life of mine plan. With the draft BFS at the Kangala already showing 'positive economics, the final report due in September 2011 is eagerly anticipated. Better still, drilling will commence outside the current feasibility area, potentially adding resources to the current life of mine plan.

Universal Coal continues to deliver a positive news flow from the company South African operations, with the draft Bankable Feasibility Study for the Kangala project showing positive economics. Universal is targeting at Kangala an initial 3 million tonne per annum run-of-mine open pit coal operation.

The first draft of the BFS from AMEC-Minproc indicates positive economics for Kangala in its current proposed form with the results currently being reviewed by senior management with recommendations to be made to the board. The results are expected to be further optimised over the next couple of weeks.

The Kangala mine will produce both an Eskom grade and 5,400 Kcal/kg grade thermal coals from a Phase 1 operation, from within the open pit reserve area.

Importantly, Universal Coal is continuing discussions with various companies that have resources or mining operations in close proximity to the Kangala project that could lead to an upward revision of the potential returns identified by AMEC- Minproc in the draft study.

Mr Tony Harwood chairman is very encouraged by the draft results commenting “We are pleased with the positive draft results of the report received from AMEC-MinProc and we will be reviewing this study to improve further the project economics.”

He said that "We are also investigating various options and opportunities to add significantly to the Kangala project and create value to benefit this exciting project."

Universal Coal and will now proceed to review and optimize the project in order to improve the already positive techno-economics and to improve the level of engineering and estimate accuracy.

The final BFS is expected by the end of September 2011.(sourced from ProactiveInvestors)