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Oracle Coalfields Plc

Oracle Coalfields Plc

Oracle Coalfields is an AIM listed (AIM:ORCP) coal developer.  The company’s primary interest is the Thar Coalfield Block VI licence area located in the Sindh Province, south-eastern Pakistan,  a 1.4 billion tonnes resource with 529 million tonnes JORC mineral resource and 113 million tonnes JORC proven reserves within the mining area of the licence.

Oracle Coalfields is traded in the ISDX Exchange HERE

Oracle Coalfields Plc

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Big picture - Why invest in Oracle Coalfields Plc

Oracle Coalfields Plc Snapshot

Incorporated in England and Wales on the 5th July 2006, Oracle listed on the PLUS Markets, in August 2007. The company successfully listed on the Alternative Investment Market (AIM) in the UK, on 20th April 2011.


Oracle Coalfields is a UK based company with coal projects in Pakistan. The Directors identified and are now developing Block VI of the Thar Coalfields asset with initial production targeted for 2014. The Company’s Directors will continue to evaluate global opportunities for investment which have the potential to increase shareholder value, as well as identifying strategic partnerships for coal mining and production.


The company signed Memorandums of Understanding (MOU) for an offtake of its coal, with both Karachi Electricity Company (KESC) and Lucky Cement. KESC is a public listed power company which intends to build a power plant(s) at the mouth of the Block VI Thar Coalfield in order to address the power cuts and load shedding in Pakistan. Lucky Cement is a public listed major cement producer in Pakistan.


Oracle CoalfieldsOracle Coalfields


Oracle Coalfields was incorporated in England and Wales on 5th July 2006 as a public limited company under the Companies Act 1985.

In July 2006, Oracle Coalfields engaged Dargo Associates Limited, an international coal consultancy based in the UK, to assist with its investigation of prospective areas of interest and to evaluate coal prospects in the Sindh Province.


In 2007, Oracle Coalfields’ 80% owned subsidiary, Sindh Carbon Energy Limited, was granted two licences for coal development by the Sindh Coal Authority and Mines and Minerals Development, Government of Sindh. The first licence, Indus East, was granted on 8th February, 2007, and the license for Block VI of the Thar Coalfield, was granted on 14th November, 2007. Sindh Carbon Energy Limited’s, primary focus is the development of Block VI of the Thar Coalfield. The Indus license is currently held in abeyance as the company focuses on Thar Coalfield Project.


Oracle Coalfields listed on the PLUS Markets primary exchange in August 2007 following a placing with three cornerstone investors. In order to aid liquidity, additional fundraising was completed in September 2007 and June 2008.


The first licence granted, Indus East, covers 100 square kilometres of semi-arid land. The work programme at Indus East commenced in early November 2007. The second licence granted, Block VI of the Thar Coalfield, covers 66.1 square kilometers. Oracle Coalfields completed further drilling to take the project to 529 million JORC mineral resource covering an area of 20 km².


Oracle Coalfields through its subsidiary has formally applied for the mining lease. In December 2009 Oracle Coalfields signed Memorandums of Understanding (MOU) for an offtake of its coal, with both Karachi Electricity Company (KESC) and Lucky Cement. KESC is a public listed power company which intends to build a power plant(s) at the mouth of the Block VI Thar Coalfield in order to address the power cuts and load shedding in Pakistan. Lucky Cement is a public listed major cement producer in Pakistan.

Projects and Maps


The coal at the Block VI licence is of a lignite quality, ensuring that it is most suited to combustion in power generation. Further coal tests have been carried out by TES Bretby Ltd in the UK, Bahria University, Karachi, and the Fuel Research Centre, part of Pakistan Council of Scientific and Industrial Research (PCSIR), Karachi, which confirmed the coal quality is suitable for power generation and industry, especially for the cement sector. Rock samples were tested by Strata Surveys Ltd and additional testing at Scientifics Laboratory of the UK. All testing is done under ASTM standards. It is intended that the company will undertake development of an open pit coal mine.

Oracle Coalfields
MOUs / agreements
Karachi Electricity Supply Company (KESC)
Oracle signed MOU with KESC in December 2009, the third largest electricity producer in Pakistan. The power plant is expected to be built in phases with a total capacity up to 1,100 MW with initial phase to be 300 MW. Oracle has formed a committee with KESC to progress a joint development of the power station and mine.
Lucky Cement
Oracle signed MOU in December 2009 with Pakistan’s major cement producer.
Thar Coalfield Block VI
Oracle CoalfieldsThe Thar Coalfield is located 380 kilometres from Karachi, and covers a total area of 9,100 square kilometers, with a total lignite coal resource in excess of 175 billion tonnes. The coalfield is in close proximity to good infrastructure, with ongoing development of a road and power network in the region.
The China North East Geological Survey Bureau ("CNGB") drilled 35 boreholes at Block VI, totalling 9,852 metres, of which 5,986 metres has been cored. From the drilling, 273 lignite samples were analysed for quality. The drilling indicated that Block VI is focused on a seam with a cumulative thickness of between 16-30 meters at a depth of less than 150 metres. The quality of the lignite coal gives an average heating value of 3,182 kcal/kg, with a high moisture, low ash and sulphur content of less than 1 percent. The depth of the coal seam makes Block VI amenable to opencast mining.
Oracle Coalfields established an MOU with KESC for when the coal mine would be able to produce 1.75 million tonnes of coal per annum for a 300MW coal-fired mine-mouth power plant, which could be increased to 1,100MW, over time. A seven borehole drilling programme was undertaken by the company to validate all historical drilling results of CNGB, and enabled the company’s UK-based independent coal consultants, Dargo Associates Ltd, to define a 1.4 billion resource covering an area of 66.1 km²  of licensing area.  
Oracle CoalfieldsSince May 2008 Oracle has been working on a strategy to take the licence forward toward production. Accordingly Oracle is working towards the completion of a Bankable Feasibility Study. Work for the BFS commenced with subcrop drilling, followed by hydrogeology and geotechnical and geophysical reports, the environmental and social impact assessment of the licensed area is currently being undertaken by Wardell Armstrong International. SRK Consulting has been appointed to undertake the BFS and supervise the drilling programme. The additional drilling programme was initiated in September 2010 for the purpose of a full feasibility study and definitive mine design and was completed in February 2011. 27 geological boreholes were drilled, these comprising four fully cored boreholes, fourteen part cored boreholes and nine open holes. All boreholes and water wells have been geophysically logged using Gamma, Long and Short Spaced Density, Spontaneous Potential (SP) and Single Point Resistance (SPR) logs. Rock core samples were collected from the fully and part cored boreholes for geotechnical testing at the Structural Soils Laboratory in Bristol, UK and for geochemical analysis at Scientifics Laboratory, UK All testing is under ASTM standard. The results of the recent drilling programme indicate cumulative thickness of 16-39m, with a continuous lignite section ranging from 5.6m to 22.9m. In total, 13 discreet lignite horizons have been recorded. Total 6157.99 meters of drilling was completed. Some 500 selected ground points, borehole locations and water well locations have being surveyed for position and elevation, in order to give a realistic topographic profile and datum points for borehole depths.
The hydrogeological programme was devised and overseen by RPS Aquaterra of Australia and local contractor was engaged for the hydrogeology drilling programme. Four test wells and four observation wells were constructed. These wells were tested to determine the hydrogeological characteristics of the upper, middle and lower aquifers, with special reference to the volumes of water required to be pumped out to allow mining, and to variations in groundwater flow within the designated mine area. Samples of the groundwater have been tested at Bahria University laboratory in Karachi for chemical analysis.
Furthermore, eleven Standard Penetration Test (SPT) holes and five trial pits were drilled to determine the exact strength and cohesion of the soils/rocks that will immediately underlie the out of pit dump area and form the top part of the mine walls.
We look forward to keeping investors regularly updated on the progress of the BFS.
Indus East Coalfield
The area covered by the Exploration Licence is in the Indus East coalfield, situated to the east of the River Indus, 140 km east-northeast of Karachi and 66 km south of Hyderabad in Sindh Province, southern Pakistan. The license is currently held under abeyance.
Reserves and Resources
Oracle Coalfields following further drilling has taken the Block VI Thar Coalfield project to  529 million tonnes JORC mineral resources covering an area of 20 km² under a two phased programme. Phase I has proven reserve of 113 million tonnes to be proven once mining lease is issued.
Technical Feasibility Study
The Thar Coalfield is located in the Sindh Province of South East Pakistan some 400km east of Karachi. The Thar Coalfield has been divided into blocks and Oracle Coalfields plc has completed the Technical Feasibility Study of Block VI and has submitted an application for a Mining Lease which is to be issued in the near future.
The FS has confirmed a JORC compliant reserve of 529Mt of lignite suitable for Power Generation and for use in the cement industry and a detailed mine design has been prepared. The design is based upon detailed geological, geotechnical and hydrogeological investigation and analysis and has demonstrated the feasibility of operating a mine with up to 5Mt pa capacity.
Oracle has entered into discussions with an international mining contractor with a view to opening up the mine in a phased development to provide coal for power and the cement industry.
A mine mouth Power Plant will be required to take the bulk of the coal and this will be a staged development with an initial 300 MW unit planned and the initial mine production of some 2.5Mt pa programmed to support this capacity. This could be increased to 1100 MW over time with the mine production rising to 5Mt to support the development.
The Technical Feasibility Study has been completed by SRK Consulting and consists of 13 Volumes which detail all the technical and economic parameters assessed to confirm the viability of developing and operating the mine which are summarised below.
Project Background
The study sets out the history of the development of the Thar coalfield and that Oracle and its subsidiary were awarded an exploration licence for Block VI to enable the FS to be carried out. In addition it sets out the overall power shortfall current and projected in Pakistan as:
6577MW in 2010
18320MW in 2015
36462MW by 2020
It also sets out the vision of the Government and the Sindh Government of installing 10,000MW of coal fired capacity from the Thar Coalfield by 2020 and that this will be facilitated by providing guaranteed rates of return and favourable incentives for investors and operators to encourage the strategic development of the Coalfield.
Mineral Resource Estimate
The study sets out the results of the drilling programmes that have been carried out and the methodology used to calculate the resource in accordance with the JORC Code. The coal qualities are also stated with the average being 3182kcal/kg with moisture of 46.1% and sulphur at 0.91%.
The Coal Resource Statement shows a JORC reserve comprising 151Mt of Measured Reserves, 308Mt of Indicated Resources, and 70Mt of Inferred Resources giving a total of 529Mt. The Phase 1 Mining Area contains some 113Mt of proven reserves and covers an area of 6 km² of the 66.1 km² of Block VI.
The report also confirms that the coals extend well beyond the Phase 1 area of study and are present throughout the Block VI area. Additional drilling and analysis would be necessary to classify these coals in accordance with the JORC Code.
Mining Report
The study sets out the detailed pit and dump designs based on the geological and geotechnical information and has calculated the optimum pit boundaries that can be developed at a stripping ratio of less than 10. The initial box cut has been positioned in an area where the stripping ratio is lowest and the cuts advance from northeast to southwest initially with the final cuts advancing from the southeast to northwest to the final Phase 1 boundary. The out of pit dump is located to the north and west of the opening cuts.
The mining method will utilise hydraulic excavators and rigid dumptrucks throughout the mine. The material will not require blasting prior to excavating and all excavated materials will be placed in the out of pit dump until sufficient void space is created to allow the waste rock to be placed in the in pit backfill dump.
In the 5Mt pa scenario some 40Mm3 of overburden is to be excavated annually and Oracle envisage this will be reduced to 20Mm3 pa in the first phase of operations where a production of 2.5Mt pa is planned. There will be at least 1.5 years of excavation required before coal is produced.
The hydrogeology study examines the effects of surface water and groundwater on the mining site. There are no rivers or significant water courses on the mine site or adjoining lands and there are only significant rains in the monsoon season when surface run off will have to be managed.
There are 3 aquifers within the mine site which will require dewatering to enable the mining to proceed to the base of the pit. There is an intermittent aquifer at the base of the upper dune sands which does not contain significant volumes of water.
A second aquifer is located in the Bara Formation above the Lignite and extends throughout the coalfield. Again it does not contain significant volumes of water but will require dewatering in advance of excavation to maintain the stability of the pit walls.
Below the base of the Lignite and confined by the basal granites at depth there is a major aquifer which again extends throughout the coalfield and requires lowering to below the base of the pit to prevent floor heave and other instabilities at the lower levels of the mine. This deep aquifer contains significant quantities of water and a major system of dewatering wells will be required to reduce the water levels principally in the deep aquifer although the system is designed to dewater all 3 aquifers. Some 95% of all the predicted waters will be from the deep aquifer.
All the waters in the aquifers is slightly saline or brackish and would require treatment for drinking or irrigation and a Reverse Osmosis plant will be constructed to provide the same. Untreated water will be suitable for dust suppression and also for cooling water for the power plant.
The study sets out the details of the site investigation, laboratory testing and geotechnical analyses that have been undertaken to determine the characteristics of the materials to be excavated and thereby enable the pit slopes, out of pit dump and in pit dump slope angles to be determined and used in the mine design. Overall and individual bench heights and slope angles have been designed to maintain stability throughout the life of the mine.
The levels to which groundwater must be reduced to maintain slope stability and to prevent floor heave at the base of the pit have also been established and a monitoring regime will be put in place to ensure that the groundwater levels are achieved and maintained during the working of the mine.
The study details the infrastructure design for the mine and the relocated community including the provision of water and power necessary for the operational mine and the community. This includes mine offices and maintenance facilities, worker accommodation, power generation, access roads and water treatment facilities to be installed.
The study details the collection of samples from boreholes to determine the geochemical behaviour of the materials to be excavated in particular the potential for Acid Rock Drainage and Metal Leachate potential of the various strata contained within the pit.
The conclusions of the testing are that the upper dune sands and sands within the lower Bara formation do not exhibit ARDML potential but that the claystones and shales within the Bara formation do. The lignite is classified as low risk for ARDML.
The potential for ARDML in the external waste dump can be minimised by ensuring the rocks with potential ARDML are buried within the dump and not exposed on the surface slopes. Within the pit in the in pit dump again these materials should be buried at depth and the process of tipping will naturally compact them to minimise potential water flows on completion of the mine and post closure.
Long term kinetic testing has been undertaken to establish if there is an increase in ARDML over time after excavation and these results will be available in about 10 weeks. Overall the ARDML potential for the mine is moderate to low and can be managed by selective excavation and tipping.
Other work has also been done to examine the potential radioactivity of the materials to be excavated and this is also not a significant risk.
Environmental and Social Impact Assessment
The Environmental and Social Impact Assessment ESIA is being carried out by Wardell Armstrong International and Haggler Bailly Pvt of Pakistan and the SRK report summarises the current status of the ESIA.
The current findings for the baseline studies have not identified any protected or endangered species or flora that would require specific protection within the Phase 1 mining area.
Further work has been undertaken to assess the impacts the mining activities will have on the environment and communities in terms of water regimes, dust, noise and land use and an Environmental and Social Management System will be prepared as part of the ESIA. The report will also examine the Socio-economic effects of the proposed mine on the local communities. This will be in accordance with the IFC Performance Standards.
In addition to the ESIA a resettlement plan for the relocation of the local community within the Phase 1 area is to be implemented in accordance with the IFC Performance Standards.
Legal Opinion
This study confirms that Oracle and its subsidiary are properly constituted and that an Exploration Licence has been issued and that Oracle has carried out the exploration and reporting in accordance with the terms of the licence and that the application for the Mining Lease has been made.
The next stage is to be granted a Mining Lease for 30 years which can be extended at the end of the period for another 30 years.
Capital and Schedule Estimate
This study sets out the capital expenditure required to bring the mine into production including all excavation costs, the infrastructure costs, the dewatering costs and the resettlement costs. The costs include for all the mining equipment being acquired by Oracle for a 5Mt pa production profile.
The discussions with a mining contractor may well alter the requirements on mine site infrastructure and significantly change the expenditure profile prior to production.
Operating Cost Report
This report sets out the projected Operating Costs for the mine with 5Mt pa production where Oracle own and operate the mining equipment. The estimated production cost is $42.21/t.
Economic Analysis
The Economic Analysis study sets out the sales price required to achieve the government guaranteed IRR of 20.5% in three scenarios:
A base case on a 5Mt production with all sales to a mine mouth power plant
As the base case with no corporate income tax or social levies
As the base case with no corporate income tax or social levies and additionally no royalty payments.
For the three scenarios a coal sales price and an operating cost have been calculated to achieve the IRR of 20.5%.
There is a basic sensitivity analysis of the figures and a statement regarding further opportunities to reduce the overall costs by refining the infrastructure costs, potential engagement of a mining contractor and additional sales to the cement industry.
The Technical and Economic model is also included in this section.
For information on Environmental and Social Impact Assessment (ESIA) please click here 



Shahrukh Khan - Chief Executive Officer

Shahrukh was educated in the USA (at Harvard University) and in the UK. He was awarded a BA in Business Administration and Economics (finance and international business) at Richmond, the American International University in London. Shahrukh has over nine years’ experience in project finance, with a particular focus upon the natural resource and infrastructure related sector. He has worked on a number of international assignments, predominantly in the Middle East, South Asia and China. He has specialist expertise in large and complex projects, including project valuation and investment appraisal, financial modelling, feasibility studies and other project finance related services. Shahrukh is the Non-Executive Director of All Star Minerals plc, which commenced trading on PLUS in April 2006. He is also a director of Al Nasr Europe Limited, a London-based trading and finance company (a sister company of Al Nasr Trading and Industrial Corporation of Saudi Arabia), which is involved in the metals and minerals industries and the energy sector.


Roderick Stead - Non-Executive Director

Roderick was awarded BSc in Economics from the London School of Economics and is qualified accountant, FCCA. He brings considerable experience in a wide variety of management roles in the oil, gas, coal, mining and forestry industries in different environments. This includes Board experience in over 25 companies. Particular experience in corporate governance issues, strategic business analysis and the management of major joint venture relationships and strategic alliances. Between 1967 and 2003, Roderick worked in several international locations for the Royal Dutch Shell Group of Companies. His positions included working as the Finance Controller for Shell Expro, the operator of the Shell/Exxon North Sea joint venture between 1984-1987, before moving to Chile, where he was Finance Director and a board member of 18 Chilean Shell subsidiaries between 1987-1991. From 1991-1996 Roderick worked as Group Advisor on Acquisition and Divestments for Shell International Petroleum Company Ltd. From 1996-1999 he was based in the Sultanate of Oman, where he worked as leader of the financing team for Oman LNG LLC, prior to becoming leader of the financing team for Nigeria LNG Ltd between 1999-2003. Roderick has extensive experience in project finance negotiations with investment banks, multilateral agencies, export credit agencies, commercial banks, law firms and accountants. Wide experience in structuring international and cross border acquisitions, mergers and divestments. Experience in privatisation transactions with Governments including Hungary, Sri Lanka, Venezuela, and the Czech Republic. Extensive contacts with most of the main investment and merchant banking firms in the USA, UK and Western Europe. Roderick has extensive experience in financial management, including accounting, budgeting, cost control and fiscal matters, in internal audit and the assessment of controls (particularly in high risk environments). Wide experience in Treasury operations, including commercial bank relations, the hedging of interest, commodity and exchange risks, and the negotiation of insurance cover.


Anthony Scutt - Senior Independent Non-Executive Director

Tony is a qualified Chartered Secretary and a Certified Internal Auditor with the US Institute of Internal Auditors. He has over 30 years of financial management expertise with Shell International Petroleum and has worked in many parts of the world, including the Malagasy Republic, East and Central Africa, South Vietnam, Cambodia, the Philippines, Gabon and latterly as the Chief Internal Auditor of Shell UK. Tony then went on to become an investment analyst, writer and investor. Tony is a Non-Executive director of Starvest plc and Beowulf Mining plc, and of PLUS-quoted Agricola Resources plc.



Simon Smith - Finance Manager

Mr Smith has background in finance from a twenty-five year career in Shell, in a variety of posts.

He was Finance Director in Sierra Leone and in Egypt where he also deputised for the Chief Executive. He also worked in Shell’s M&A unit, particularly on the sale of Billiton, Shell’s Metals division, the sale of Shell’s agrochemical interests and Shell’s early expansion into eastern Europe. Latterly he headed up Group Finance HR. Mr Smith has an MA in Economics from Cambridge University and is a fellow of the Institute of Chartered Accountants in England and Wales.


Brian Rostron - Mining and Contracts Manager

Brian was awarded an Msc. in Mining Engineering from the University of Newcastle -upon -Tyne and a first degree in Geology and Economics from Sunderland Polytechnic.He has aver 30 years experience working in both the Civil Engineering and Mining sectors and has held a number of executive positions in coal mining companies including Coal Contractors Ltd.,the Scottish Coal Company Ltd., H.J.Banks Mining Ltd., and Miller Argent(South Wales) Ltd. He was also Director General for the Confederation of UK Coal Producers and continues to represent the industry at national level. In addition he has worked with international mining consultancies on coal mining projects in Montenegro, various regions of Russia and in Poland.



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