SPRINGBOK FLATS EASTERN COMPLEX

The Springbok Flats Eastern Complex  Project area is located within the Springbok Flats Basin, which spans an area of approximately 8,000km², located within 28°00’E and 29°30’E longitude and 24°15’S and 25°30’S latitude. The major towns and villages in the area include: Bela-Bela (previously Warmbaths), Modimolle (Nylstroom), Mookgophong (Naboomspruit) and Roedtan.

 

The presence of coal in various parts of the Springbok Flats has been discussed on several occasions. Wagner et al (1927) compiled a report dealing primarily with the Karoo Succession in the Springbok Flats. Drilling was done with a jumper drill and therefore no analyses for the coal were reported. A report by Visser et al (1959) reveals more detail regarding the properties of the coals in the Roedtan area. During this investigation, 27 boreholes were drilled in the north-eastern Springbok Flats Basin.

In 1970 – 1973 a further investigation was conducted by the Geological Survey of South Africa. During this investigation an attempt was made to correlate the various coalfields in the Northern Transvaal (now Limpopo Province). Subsequent investigation proved some of these correlations to be inaccurate. TNC, a subsidiary of General Mining Corporation Limited, embarked on a large-scale exploration program during 1973, covering the entire Springbok Flats. The program, which included drilling more than 1,400 boreholes and 300 deflections and metallurgical studies, was put on hold in 1982, due to surplus energy capacity in South Africa.

A total of 425 boreholes lie within or immediately adjacent to, the HolGoun Assets, giving an average borehole density of 1 borehole per 98 hectares over the whole area. There are 93 historic boreholes within the East Complex, 6 of which were twinned during the 2007 exploration programme conducted by HolGoun. HolGoun possesses additional borehole information covering areas outside of the Prospecting Rights and these have been included in the geological model to enhance confidence around the margins of the HolGoun Assets. It is the opinion of SRK that the density, distribution, and quality of data is sufficient to allow an estimate of the Coal Resources to be made at an appropriate level of confidence.

HolGoun completed a Twinning Campaign during 2007 with a view to confirming the historical borehole data (stratigraphy, interval thicknesses, ore horizons, coal quality and uranium grades). A total of 20 boreholes were completed, constituting twin holes drilled adjacent to historical boreholes, with the separation distances between twin and historical pairs approximately 15 to 20m. The twin sites covered a representative selection of geological conditions from the Uranium and Steam Coal area in the west (Settlers sub-basin) to the Coking Coal area in the east (Tuinplaats sub-basin).

GEMECS submitted a comprehensive report detailing the Twinning Campaign and the results therefrom. The report is entitled “Comparison between historical and modern twin boreholes on the Springbok Flats, Limpopo, South Africa”, GEMECS Project Number GMX-08-0016.

The geological structural and coal quality model was constructed by GEMECS utilizing Gemcom’s Minex Horizon Module (version 4.1J). Borehole intersection elevations, thicknesses and coal qualities were gridded using the General Gridding algorithm with a unit cell size of 100 x 100m in order to produce a continuous 3-dimentional geological model. Structural influences such as palaeo-highs, dolerite sill transgressions and no-coal areas were accounted for in the model. The full seam thicknesses are modelled in order to determine the gross in situ coal volumes. In situ coal qualities (raw and products) were determined by gridding the borehole seam composite values.

Resource Estimation are an Inferred Steam Coal Resource of GTIS 91mil and MTIS of 77mil, with MJ/kg averaging between 23.70 and 26.53CV, and Inferred Coking Coal Resource of GTIS 70mil and MTIS of 60mil, with MJ/kg averaging between 23.83 and 29,74CV

 

The preliminary economic assessment of the East Complex indicates that the HolGoun assets can support a profitable coking and steam coal operation for more than 30 years. The preliminary economic assessment of the east Complex is seen to yield a NPV at 10% real discount of ZAR1,920million (US$248million) with an IRR of 42%.

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