Great news. Cashed up... $295m in the bank. Tata can't help but...

Great news. Cashed up... $295m in the bank. Tata can't help but be impressed. Stage 1 mining on track. Due for the rerating back to $10 short term IMO. Mallyon well connected for maximum value for shareholders. Get on board.


The ann:

Benga Feasibility Study

Riversdale is pleased to announce the completion of a Feasibility Study for the Benga Coal Project in the Tete Province of Mozambique. The Feasibility Study will be provided for review and comment to Tata Steel Limited, who has a 35% interest in the project. Following this review, it is envisaged that the project will be considered by the joint venture company for development approval.
The Feasibility Study is based on Coal Reserve and Coal Resource estimates released by Riversdale in April 2009. Coal Reserves total 273.3 million tonnes, comprising Proved Reserves of 181.3 million tonnes and Probable Reserves of 92.0 million tonnes. Coal Resources total 4.0 billion tonnes, comprising Measured Resources of 313.9 million tonnes, Indicated Resources of 720 million tonnes and Inferred Resources of 2,990 million tonnes. Coal Resources are reported inclusive of Coal Reserves (that is Coal Reserves are not additional to Coal Resources).
Phased Development Plan
The Feasibility Study contemplates three principal stages of development to align with the completion and subsequent expansion of rail, port and river barging infrastructure in Mozambique.
The initial Stage 1 development at 5.3 million ROM tonnes per year will produce approximately 1.7Mtpa of high quality hard coking coal and 0.3Mtpa of export thermal coal.
A Stage 2 expansion by 2014 will include the installation of a second module of the coal preparation plant and increase ROM production to 10.6 million ROM tonnes per year to produce 3.3Mtpa high quality hard coking coal and 2Mtpa export thermal coal.
The final stage is anticipated to increase coal production to approximately 20 million ROM tonnes per annum through installation of two additional coal preparation plant modules. The decision on the timing of the Stage 3 expansion will depend, amongst other things, on future coal market conditions and the availability of port, rail and barging capacity at that time.

Stage 1 mine production and coal preparation plant startup is planned to commence in early 2011, with export of coal from the Port of Beira expected to commence upon commissioning of the third party operated Sena railway and refurbishment of the coal export facility at Beira, presently anticipated for the second quarter of 2011.
Stage 2 production is targeted to commence no later than 2014 and will be timed to coincide with the opening of a new purpose built multi-user coal terminal at the Port of Beira as well as the commencement of barging operations.
The Feasibility Study has confirmed that the project exceeds Riversdale’s required rate of return with capital costs of US$260 million for Stage 1 (excluding working capital) and an additional US$150 million for Stage 2.
The Benga Project is a conventional truck and shovel operation utilising 100 and 150 tonne off road trucks and hydraulic excavators. Mining will be conducted by a mining contractor. The coal handling and preparation plant is a 2 x 800 tph, two stage plant incorporating dense media cyclones, reflux classifiers and flotation cell. The Benga project has an average ROM strip ratio of 2.8 over a 25 year mine life.
Barging
As announced previously, Riversdale is investigating the feasibility of transporting coal by barge down the Zambezi River from Benga to a floating transloader moored offshore from the river mouth at Chinde – a total distance of 553 kilometres.
Earlier this year, Riversdale undertook detailed bathymetric and hydrology surveys of the full length of the river from the Benga mine site at Tete to 10 kilometres beyond the mouth of the river. The results of this survey together with other work are encouraging and the company has commenced a full feasibility study of barge transportation. The company has also recently engaged a leading firm of Canadian based naval architects and a preliminary design for the river barge, shuttle tugs and push boats is now complete. Riversdale has initiated a tender process for a transloader to be operated off Chinde under contract. The feasibility study will evaluate large scale barging capacity on the Zambezi River capable of supporting an expanded Benga Project as well as Riversdale’s other development projects in the Tete region.
Funding
Riversdale is adequately funded for its 65% share of the Benga Stage 1 development (US$169 million) with cash reserves of A$295 million and minimal debt. Financing for subsequent phases of the project will be progressed at a later stage.
Steve Mallyon
Managing Director