Name and Location
Boikarabelo coal project, Limpopo, South Africa.

Client
Resource Generation (Resgen).

Project Description
Boikarabelo has probable reserves of 744.8-million tonnes, a measured resource of 1.1-billion tonnes, an indicated resource of 551.7-million tonnes and an inferred resource of 1.5-billion tonnes.

The Boikarabelo coal seam is between 20 m and 30 m below surface, enabling low-cost, opencut mining. The seam is between 120 m and 130 m thick, with zones of varying-quality thermal and soft coking coal.

The mine will be developed using a two-phased approach to limit upfront capital expenditure. The first phase will deliver about 14-million tonnes of run-of-mine coal a year, which will equate to about six-million tonnes of product coal. Of this, three-million tonnes will be exported and three-million tonnes will be used domestically.

Phase 2, planned for 2022, will involve ramping up production to 20-million tonnes of product thermal coal.

The project includes a 40 km rail link to the existing rail network.

Boikarabelo hosts a life-of-mine of up to 100 years.

Net Present Value/Internal Rate of Return
Not stated.

Value
The estimated capital cost for the project is $480-million.

Duration
Resgen black economic-empowerment subsidiary Ledjadja Coal received the Boikarabelo mining rights from the Department of Mineral Resources in April 2011.

Initial construction of the mine started in the first quarter of 2013 and is scheduled for completion in the second half of 2017.

The mine is expected to begin production in late 2017.

Latest Developments
Resgen has slammed an attempt by certain shareholders to overthrow the board, claiming illegal collective action by Shinto Torii, Noble Resources International and the Public Investment Corporation (PIC), led by Shinto parent company Altius Holdings.

Shinto, which holds a 10.7% stake in Resgen, requested a shareholders at the end of September meeting to have the four current directors sidelined on the basis that they had failed to obtain the funding required to progress the Boikarabelo coal mine development, in Limpopo.

The ASX-listed coal explorer subsequently requested Altius withdraw its 249D request to avoid jeopardising a newly acquired $480-million financing package, which could potentially be withdrawn should there be a change of directors.

On September 30, Resgen announced the signing of a memorandum of agreement with Swiss private company HAB & JPR Privée that would be more favourable than the “incomplete proposals” received from the club of financiers, including Noble Group and PIC.

Resgen had also written to the Australian Securities and Investments Commission stating that Altius was acting on behalf of itself, Noble and PIC to replace Resgen’s directors with their own nominees.

The move emerged shortly after Resgen dismissed funding partner Noble’s request for the appointment of additional directors to the boards of the company and its black economic-empowerment subsidiary Ledjadja Coal.

Resgen explained that it had disclosed confidential material information to Altius, Noble Group and PIC during financing negotiations.

“This information may have been used for other purposes in breach of this condition. If shareholders vote to remove Resgen’s existing board, this potential breach is unlikely to be pursued,” the company claimed in a statement on Thursday, adding that other actions in response to the matter were being considered.

Key Contracts and Suppliers
Digby Wells Environmental (mining right application, mine-waste licence, environmental authorisation process for power plant); RSV Enco (engineering, procurement and construction management, or EPCM, for mine construction); FLSmidth Roymec (coal handling and preparation plant); RCE (rail design and construction); Ceenex (water EPCM services), Komatsu Financial Limited Partnership (mobile equipment fleet); and EHL Energy (transmission lines).

On Budget and on Time?
First production has been delayed to late in 2017.

Detailed mining and engineering plans, together with the results of tenders, support the estimated first-stage cost of the mine of $480-million.

Contact Details for Project Information
Resgen (Australia), tel +61 2 9376 9000, fax +61 2 9376 9013 or email info@resgen.com.au; or (South Africa), tel +27 12 345 1057 or fax +27 12 345 5314.
Boikarabelo mine site, tel +27 14 944 0199.
Digby Wells Environmental, tel +27 11 789 9495 or +27 11 504 1400, fax +27 11 789 9498 or +27 11 504 1446, or email info@digbywells.co.za.
RSV Enco, tel +27 11 498 6010, fax +27 11 498 6210 or email enco@rsvenco.com.
RCE, tel +27 12 450 0040 or fax +27 12 450 0060.
FLSmidth Roymec, tel  +27 10 210 4000 or fax +27 10 210 4050.
Ceenex, tel +27 12 347 2620.
Komatsu Financial Limited Partnership, tel +1 888 500 6001 or fax +1 847 437 3199.
EHL Energy, tel +27 11 370 7400 or fax +27 11 834 4203.