South Africa based coal exploration and production company Strategic Natural Resources (AIM: SNR), which has recently completed a £2.9 million fundraising, said it has commissioned Golder Associates to update the Competent Person's Report (CPR) with an additional 29 boreholes drilled, on its western area of its Phase 1&2 mining right, all yielding coal. The updated CPR is expected to be released later this year.
In another development since announcing the fundraising in mid-March, it also acquired a 26% stake in a South African engineering firm, which will build burners to burn Eastern Cape anthracite.
In connection with the CPR update, the company has commissioned an Export Feasibility Assessment Study (EFA) comprising a detailed assessment of logistics and materials handling of all coal from mine mouth to vessel hold, expected to be completed in the second half of the current year. The RFA will also look at bulk sampling and washing of coal from the eastern area of the Phase 1&2 reserves to assess washability curves as well as metallurgical properties of the coal.
SNR has recently established an engineering operation in South Africa to build burners to burn the Eastern Cape anthracite to be mined by SNR, acquiring the 26% stake of the venture through providing exclusivity to ACE for the manufacture of burners to burn the Elitheni Coal without making any further financial commitments.
The Company's partners, Jeuelly 44 Trading CC (49% ownership) and Allied Coal Projects (Pty) Ltd (25% ownership) , share over 50 years experience in materials handling and boiler manufacturing in South Africa, servicing clients such as Transnet, SAB, Anglo and Lion Match.
The construction of the first prototype ACE Burner, anticipated to be completed later this year, follows the trials conducted earlier this year using Suxe burner technology to prove the effective combustion of Eastern Cape anthracite and has created an opportunity for the marketing of Eastern Cape anthracite for industrial steam production in South Africa. The production of new burners is expected to commence in late 2010 to supply initial contracts.
“The board is delighted with the progress being made by the Company in South Africa and we are progressing the targets we set ourselves at the time of our recent fundraising. We look forward to providing further updates in due course,” said Chairman of SNR Richard Latham.
The company’s principal asset is its 74% stake in Elitheni Coal Pty, which mines and distributes anthracite coal in the Eastern Cape. During the previous financial year, ended 28 February 2010, Elitheni began coal extraction to supply a small number of brickyards. Elitheni commercially supplied 4,000 tonnes of coal during the year, with the primary purpose of funding the initial mine development needed to begin preparations for underground mining.