Guys • NMR have released their first results for Takatokwane South and this is much larger than I had expected. • • They have a raw coal target of 2.0Bt as an extension to the existing 4.2Bt raw coal resource at Takatokwane, to the north. Total 6.2Bt Raw. If I estimated a conversion factor of 0.5 between the raw and washed coal, this could result in a total washed coal resource of around 3.4Bt. • • The best coal is in an extension to the east and south-east of the existing resource • • The exploration target is predicted from the existing drill results (13 of 16 holes returned) so we can have some confidence on this. the 8km by 16km block containing the coal in the exploration target dips shallowly to the north with the same seams seen as those at Takatokwane however the estimation uses only Seam 2 which is consistently encountered in the new area which hosts the best developed and highest yielding coal. This new area could host the best coal of the entire combined project. • Phase 2 drilling will commence shortly to get the area into an Inferred resource category, but more importantly, identify the best areas in which to concentrate on drilling an Indicated resource whihc would form the basis of the PFS. • • At a 1.6 SG, the CV's (4,800 to 6,000 Kcal/Kg) and other elements look OK. Sulphur is still in a wide range. We would expect washed coal to be better. Some of these seams are off a considerable thickness and being closer to surface in this area, will favour open pit mining with relatively low strip ratios. • • This all looks very good. I will speak to the company this morning.
NMR Price at posting:
5.7¢ Sentiment: Buy Disclosure: Held
