151
4. COAL RESOURCES
4.1 Sample Data Assumptions for Modelling Purposes
All the diamond boreholes completed for this report were drilled vertically and, as the regional dip of the
Vryheid Formation strata is below 5°, the apparent thickness of the intersected coal seams closely
approximates the true thickness. Where less than 95% recovery was obtained through any coal seam, these
were discounted and not included for estimation purposes and the drilling contractor was requested to re-
drill the hole. In total three holes were re-drilled on the Delmas Project area and no holes on the Sterkfontein
Project area.
In compiling the data for the physical and analytical models the following procedures were used. All the
physical data from the borehole logs and tables in the geological reports were verified and captured into an
Excel database and all hard copy borehole logs were checked against the digital database. This database was
made read-only to prevent any of the data being corrupted.The physical databases consisted of the borehole
name, the X and Y co-ordinates, the collar elevation, the depth to the roof and floor of each seam, the sample
name and from and to depths for each sample. From this information the thicknesses of each seam as well
as the elevations of the roof and floor of each seam could be calculated. A number of check algorithms were
run to check for negative seam thicknesses and partings. The analytical data was captured in a similar
manner, but in three Comma Separated Values (“CSV”) files, a header record, a samples record and an
analyses record. These files were also made read-only to prevent data being corrupted. This data was then
given to Gemecs to be used in their MINEX proprietary modeling software. The algorithms standardise wash
fractions, calculate raw RD’s from the proportion of raw ash in the samples as well as using the standard
methodologies for composting samples using thickness and raw RD.
The laboratory results were read into Excel files and then into a verification, compositing and washing
simulation database. Using the proprietary Washproduct Software® software numerous check routines were
run to verify the data, composite the samples as well as to simulate and report quality outputs.Washproduct
Saftware® uses standard accepted methodologies to composite samples using the RD and width of each
sample and then weighted by the yield at each fraction to calculate the composited quality for each seam
at every wash density. Washproduct Software® will also check laboratory reported RD’s (often a source of
error against calculated RD’s).
These data were given to Gemecs to be used in their MINEX proprietary modeling software. Tables 4.1_1
to 4.1_3 give examples of physical borehole results, sample files, and analyses files.
An example of a representative composite for two calorific values namely a primary wash of 27 MJ/kg and a
secondary wash of 20 MJ/kg are shown in Table 4.1_4.
152
Table 4.1_1
Keaton Energy Holdings Coal Projects
An Example of Physical Borehole Results
X Y BHID Collar LOW 5 dbsrf 5 dbsfl 4L dbsrf 4L dbsfl 2 dbsrf 2 dbsfl
–17590.93 –2898709.90 VG07–01 1586.11 6.26 15.63 16.46 56.48 60.33 73.73 81.36
–17605.46 –2897992.44 VG07–02 1584.10 11.55 31.25 38.70 53.94 58.68
–17575.29 –2896371.17 VG07–04 1597.33 17.62 29.22 30.98 45.15 55.52 62.34 71.72
–16785.14 –2895614.28 VG07–05 1595.89 14.67 85.34 86.95 103.86 104.47 107.77 111.73
–16834.41 –2896250.65 VG07–06 1605.77 15.14 40.33 40.95 59.90 65.61 73.17 73.50
–16811.40 –2897187.38 VG07–07 1579.20 5.90 35.86 41.17 53.70 61.49
–16799.10 –2898051.96 VG07–08 1569.94 9.25 21.80 25.57 38.89 44.48
–16760.23 –2898656.96 VG07–09 1573.99 30.60 36.25 37.72 48.00
–16015.35 –2897988.56 VG07–11 1560.31 5.36 20.67 20.97
–16002.96 –2897197.70 VG07–12 1572.62 6.55 24.00 26.97
–15985.39 –2896434.08 VG07–13 1587.44 0.50 36.00 36.86 59.25 62.45 77.76 81.32
–16101.03 –2895598.29 VG07–14 1592.77 7.25 39.57 40.87 60.69 69.46 74.21 82.20
–15262.21 –2895633.32 VG07–15 1584.13 5.50 14.94 16.69 43.80 51.77 57.57 62.57
–15197.21 –2896395.05 VG07–16 1574.81 13.22 25.59 26.83 50.20 58.16 65.23 72.10
–15201.93 –2897188.40 VG07–17 1572.96 11.57 27.33 33.78
Table 4.1_2
Keaton Energy Holdings Coal Projects
Example of a Sample File
BH ID From To Sample ID Seam Raw RD
SK07–03 184.03 184.52 TC005 4 1.7
SK07–03 184.52 184.96 TC006 4 1.49
SK07–03 184.96 185.35 TC007 4 2.28
SK07–03 185.35 185.97 TC008 4 1.52
SK07–03 185.97 186.79 TC009 4 1.46
SK07–12 166.49 168.61 TC010 4 1.7
SK07–12 168.61 168.97 TC011 4 1.95
SK07–12 168.97 169.99 TC012 4 1.47
SK07–04 173.31 174.29 TC013 4 1.63
SK07–04 174.29 174.87 TC014 4 2.34
SK07–04 174.87 176.21 TC015 4 1.4
153
Table 4.1_3
Keaton Energy Holdings Coal Projects
Example of the Analyses Files
Sample ID RD Cum moi Cum ash Cum vols Cum FC Cum S Cum CV Cum Yield
TC005 1.4 3.4 11.8 32.7 52.1 1.82 27.79 4.98
TC005 1.45 3.22 13.55 31.98 51.25 2.08 27.22 9.03
TC005 1.5 3.07 15.24 30.72 50.97 2.15 26.64 11.94
TC005 1.55 2.98 17.78 28.23 51.01 2 25.69 17.96
TC005 1.6 3.09 21.31 23.95 51.65 1.73 24.16 35.67
TC005 1.65 3.09 23.43 22.2 51.28 1.63 23.35 52.54
TC005 1.7 3.09 24.81 21.38 50.72 1.62 22.82 63.71
TC005 1.75 3.03 26.48 20.87 49.62 1.79 22.2 75.23
TC005 1.8 3 27.37 20.68 48.95 1.86 21.88 79.75
TC005 2 2.82 32.04 20 45.15 3.85 20.21 100
TC006 1.4 3.3 11.2 36.1 49.4 1.55 28.24 27.26
TC006 1.45 3.22 13.54 34.89 48.36 1.51 27.44 46.8
TC006 1.5 3.11 15.2 34.03 47.65 1.51 26.83 62.06
TC006 1.55 3.07 15.89 33.44 47.59 1.65 26.58 68.64
TC006 1.6 3.02 17.13 32.63 47.21 1.71 26.13 78.17
TC006 1.65 2.97 18.47 31.89 46.67 1.74 25.64 86.31
TC006 1.7 2.93 19.25 31.4 46.42 1.77 25.36 90.77
TC006 1.75 2.9 19.83 31.14 46.12 1.87 25.15 93.18
TC006 1.8 2.9 20.02 31.07 46.02 1.86 25.08 93.97
TC006 2 2.79 22.47 30.44 44.3 2.38 24.21 100
154
Tab
le 4
.1_4
Ke
ato
n E
ne
rgy
Ho
ldin
gs
Co
al
Pro
ject
s
Se
lect
ed
Re
pre
sen
tati
ve
Co
mp
osi
ted
An
aly
sis
Re
sult
s
Co
mb
ine
dP
rim
ary
wa
sh 2
7 C
VS
eco
nd
ary
wa
sh 2
0 C
VY
ield
Ho
le I
DS
ea
mR
aw
RD
Mo
istu
reA
shV
ola
tile
sFC
Su
lph
ur
CV
Yie
ldM
ois
ture
Ash
Vo
lati
les
FC
Su
lph
ur
CV
Yie
ld
SK
07
–0
14
1.5
23
.47
15
.43
32
.88
48
.22
1.7
42
74
8.6
12
.99
28
.36
24
.84
2.7
81
.83
21
.39
51
.39
10
0
SK
07
–0
24
1.5
43
.85
13
.43
3.1
94
9.5
61
.42
27
51
.75
3.3
32
.82
2.0
44
1.8
61
.69
20
48
.25
10
0
SK
07
–0
34
1.6
43
.22
13
.91
32
.65
50
.22
1.2
12
74
82
.72
33
.16
21
.28
42
.84
1.7
12
03
2.0
48
0.0
4
SK
07
–0
44
1.6
73
.16
14
.22
32
.55
50
.07
1.3
82
74
7.1
92
.82
33
.15
21
.91
42
.13
1.7
92
02
6.0
77
3.2
6
SK
07
–0
54
1.5
23
.33
13
.97
33
.14
9.6
1.0
42
76
9.2
62
.93
33
.02
22
.82
41
.23
1.2
32
01
3.6
88
2.9
4
SK
07
–0
64
1.5
72
.98
15
.03
34
47
.99
1.2
92
73
6.4
82
.51
32
.49
23
.39
40
.21
1.6
20
.71
63
.52
10
0
SK
07
–0
74
1.5
64
.05
13
.69
32
.74
49
.52
1.3
27
21
.39
3.7
92
7.8
52
3.0
14
4.8
81
.56
21
.16
78
.61
10
0
SK
07
–0
84
1.6
4.2
81
1.1
33
3.3
95
1.2
1.0
42
73
6.0
33
.73
1.0
72
1.8
14
3.4
31
.97
20
60
.18
96
.21
SK
07
–0
94
1.6
44
.27
13
.08
31
.69
50
.95
1.4
82
74
9.4
23
.57
31
.97
23
.77
40
.69
1.6
72
02
9.2
77
8.6
9
SK
07
–1
04
1.5
94
.26
13
.15
32
.78
49
.81
2.1
22
74
2.6
3.5
93
0.9
82
5.6
43
8.6
82
.27
20
.23
57
.41
00
SK
07
–1
00
41
.63
2.9
21
0.3
73
3.6
55
3.0
61
.35
27
24
.51
3.3
30
.51
24
.38
41
.81
1.4
52
06
5.4
78
9.9
8
VG
07
–0
12
1.7
2.2
61
7.3
42
0.8
55
9.5
50
.42
71
7.4
12
.76
32
.79
15
.14
9.3
40
.32
05
8.8
97
6.3
VG
07
–0
22
1.7
73
.11
18
.53
10
.86
67
.51
0.8
12
76
.67
4.2
53
4.3
28
.41
53
.02
0.4
62
05
8.8
56
5.5
2
VG
07
–0
82
1.7
92
.71
11
.27
.99
78
.10
.63
27
1.1
3.4
72
9.6
47
.57
59
.32
0.6
12
03
9.8
14
0.9
1
VG
07
–1
42
1.6
74
.89
10
.62
9.7
35
4.7
80
.52
73
1.1
74
.09
29
.27
21
.17
45
.47
0.5
82
03
3.3
86
4.5
5
VG
07
–2
62
1.6
53
.95
12
.52
31
.08
52
.46
0.9
62
72
5.8
3.4
23
1.1
20
.93
44
.54
0.8
12
04
8.7
74
.5
VG
07
–1
54
1.7
25
.51
1.8
33
2.4
95
0.1
71
.26
27
12
.58
4.9
53
2.3
52
1.2
84
1.4
20
.46
20
62
.99
75
.57
VG
07
–1
64
1.6
84
.82
15
.27
29
.77
50
.14
0.8
82
73
3.5
4.4
33
0.1
12
1.5
54
3.9
0.4
20
30
.97
64
.47
VG
07
–1
74
1.6
72
.56
14
.81
8.7
26
3.9
20
.96
27
12
.34
3.3
37
.65
16
.52
42
.54
1.1
82
08
7.6
61
00
VG
07
–1
94
1.6
4.7
21
2.7
53
1.2
25
1.3
20
.92
27
40
.84
4.0
83
0.9
12
1.2
24
3.7
90
.76
20
34
.86
75
.7
VG
07
–2
04
1.6
63
.69
15
.03
20
.93
60
.35
0.4
92
72
4.7
44
.03
31
.18
14
.76
50
.03
0.4
42
05
9.1
38
3.8
7
VG
07
–2
65
1.7
43
.22
15
.06
15
.79
65
.93
1.3
62
78
.67
3.8
82
9.1
11
5.6
95
1.3
20
.97
20
49
.95
8.5
7
VG
07
–3
15
1.5
32
.98
15
.79
25
.49
55
.75
0.6
72
78
0.3
60
80
.36
VG
07
–3
25
1.5
64
.47
13
.53
28
.65
3.4
10
.52
27
66
.04
3.4
32
20
.97
43
.63
0.4
62
09
.74
75
.78
VG
07
–6
15
1.5
83
.21
4.2
52
8.7
95
3.7
60
.69
27
64
.84
3.8
30
.66
18
.35
47
.18
0.1
22
01
3.1
77
8.0
1
155
4.2 Methodology
The methodology used with respect to resource estimation is outlined below:
A database was created of all the available data (including survey, geological, geophysical and analytical data)
and this information was cross-referenced to all the data for the major lithological units. A suite of validation
algorithims were performed on the data set in order to check for internal consistency. A MINEX borehole
database was then created from the cleaned data. This is a fully relational database that allows for the
correct compositing of data over geological intervals.
All relevant horizons were interpolated into each borehole to allow for washouts, underdrilling and erosion.
Correlation of the coal seams and/or horizons in each project area was undertaken by stratigraphic
interpretation, sedimentological package identification, from the geophysical logs and by the use of various
cross-sections. From this database, all the relevant map/geometry data (such as surface DTM’s, depth of
softs, depth of weathering, dolerite intersections, potential fault planes, depth to basement) were created.
Posting plans were then created and the structural information was validated as to stratigraphic integrity. All
the relevant information was then gridded, with the grids terminated at the relevant truncating horizons. All
the analytical information was then imported and validated. All seam information was composited.
Coal seam quality grids were created and all the potential economic coal extents were determined, with
potential mineable areas defined. From this a resource statement was generated in compliance with the
guidelines laid out in the SAMREC Code (SANS 10320:2004).
Various modifying factors were taken into account for geological and mining losses and were applied to
determine a mineable in-situ tonnage (“MTIS”) for each resource block.
Qualities and yields were simulated using the Washproduct Software®. Yields and raw qualities for each
resource block were simulated and then tabulated.
4.2.1 Data Verification
Table 4.2.1_1 documents the repeat samples sent to Witlab in order to check on the preparation and
coal analyses performed by the Inspectorate M&L. A portion of the 1.5 float fraction from 12 samples
was sent for duplicate proximate analysis. The results from Inspectorate M&L, with minor exceptions,
compared well with those of Witlab.(refer to Table 4.2.1_1 for the samples submitted for comparative
analysis and Table 4.2.1_2 for the results).
Table 4.2.1_1
Keaton Energy Holdings Coal Projects
Repeat Analyses for the Projects
Batch No. Borehole ID Sample ID M&L Reference Seam Property
3 SK07–13 TC018 07/1992M 4 Sterkfontein
3 SK07 TC019 07/1992M 4 Sterkfontein
3 SK07 TC020 07/1992M 4 Sterkfontein
13 SK07–23 TC323 08/3471M 4 Sterkfontein
13 SK07–23 TC324 08/3471M 4 Sterkfontein
VG3 VG07–05 X309 08/3511M 4 Delmas
VG3 VG07 X310 08/3511M 4 Delmas
VG3 VG07 X311 08/3511M 2 Delmas
VG7 VG05–65 X581 08/3799M 2 Delmas
VG7 VG05 X582 08/3799M 2 Delmas
VG7 VG05 X583 08/3799M 2 Delmas
VG7 VG05 X584 08/3799M 2 Delmas
156
Tab
le 4
.2.1
_2
Ke
ato
n E
ne
rgy
Ho
ldin
gs
Co
al
Pro
ject
s
An
aly
ses
Co
mp
ari
son
HO
LE
SA
MP
LEM
ois
ture
(%
)A
sh (
%)
Vo
lati
les
(%)
Fixe
d C
arb
on
(%
)C
alo
rifi
c V
alu
e (
MJ/
kg
)S
ulp
hu
r(%
)
IDID
W
itla
bM
&L
Wit
lab
M&
LW
itla
bM
&L
Wit
lab
M&
LW
itla
bM
&L
Wit
lab
M&
L
SK
07
–1
3T
C0
18
3.2
3.6
19
.62
0.4
29
.32
9.9
47
.94
6.1
24
.92
4.5
1.5
1.4
SK
07
–1
3T
C0
19
4.0
4.2
17
.81
7.9
32
.82
4.7
45
.45
3.2
25
.72
4.9
0.9
0.8
SK
07
–1
3T
C0
20
2.5
3.8
20
.42
0.1
29
.42
7.5
47
.74
8.6
24
.92
4.4
1.3
1.2
SK
07
–2
3T
C3
23
4.0
3.7
18
.51
8.9
31
.73
0.9
45
.84
6.5
25
.02
5.8
2.0
1.9
SK
07
–2
3T
C3
24
4.5
4.1
14
.81
5.1
26
.82
7.4
53
.95
3.4
25
.92
6.2
0.8
0.7
VG
07
–0
5T
C3
09
5.9
5.2
18
.41
6.0
26
.92
6.1
48
.85
2.8
24
.72
5.0
0.8
0.8
VG
07
–0
5T
C3
10
5.7
5.2
15
.51
6.1
26
.62
6.8
52
.25
2.0
25
.12
5.1
0.4
0.5
VG
07
–0
5T
C3
11
4.0
3.9
18
.41
8.5
30
.52
9.9
47
.14
7.7
25
.22
5.5
1.6
1.5
VG
07
–6
5T
C5
81
3.7
2.8
20
.22
0.3
17
.31
5.7
58
.86
1.2
25
.02
6.0
1.6
1.4
VG
07
–6
5T
C5
82
4.3
3.0
20
.32
0.8
13
.51
3.3
61
.96
2.8
25
.42
6.3
0.6
0.6
VG
07
–6
5T
C5
83
3.8
2.7
17
.91
8.2
14
.31
6.3
64
.06
4.8
26
.22
7.6
0.9
0.8
VG
07
–6
5T
C5
84
3.5
2.8
14
.91
5.3
9.5
9.7
72
.17
2.3
28
.22
8.9
1.6
1.5
157
The Delmas Project area data set included 41 historical boreholes received from the Geosciences
Council. Not all these boreholes fell within the permitted area. Between October and December 2007
KEH drilled an additional 85 boreholes of which several of these boreholes were positioned on or near
the historical boreholes. The historical and new boreholes had good correlations; however 10 old
boreholes were discarded for geological modelling purposes as the variances were too high. The
database contained 116 boreholes. Due to the rapid changes in floor topography and seam depths
and thicknesses it was expected that boreholes close to each other would show significant variations.
Table 4.2.1_3 shows a comparison of old and new boreholes that were drilled in close proximity to
each other.
Table 4.2.1_3
Keaton Energy Holdings Coal Projects
A Comparison of Old and New Boreholes
X Y BHID 5 depth 5 depth 4L depth 4L depth 2 depth 2 depth
to roof to floor to roof to floor to roof to floor
–16101.03 –2895598.29 VG07–14 39.57 40.87 60.69 69.46 74.21 82.20
–16077.00 –2895376.00 39/61 36.90 38.35 54.42 62.05 69.18 75.74
–15985.39 –2896434.08 VG07–13 36.00 36.86 59.25 62.45 77.76 81.32
–16103.00 –2896441.00 36/61 28.50 29.74 53.54 58.95 75.18 81.43
–13571.46 –2897202.23 VG07–26 24.15 29.50 43.41 47.85
–13453.00 –2897300.00 22/61 22.73 29.72 44.75 49.02
For the Sterkfontein Project area there was so little historical geological data that only the new data
was used for geological modelling. A few boreholes in the north were discarded because of obvious
data errors. The number of boreholes used for geological modelling was 119 on the Sterkfontein
Project area.
4.2.2 Geological Modelling
Three-dimensional geological wireframe models were not created for the project areas as in coal a
much better estimation of the resource is achieved using gridding software such as Minex.
Minex software is well documented in various publications and uses a gridding algorithm that
forecasts into grid values from boreholes and analytical values. Grid manipulation after coal cut-off
parameters, structural parameters and other limiting factors (farm boundaries etc.) have been applied
and is used to generate area, volumes tonnages and qualities for any parameter specified by the user.
The author also used Surfer software to validate the outputs from the Minex model to ensure that
the Minex model was robust. Surfer uses a similar forecasting methodology as Minex but creates
single grids for each of the physical or analytical parameters. Areas of no coal or unmineable coal are
then blanked out in the grids and volumes are calculated by subtracting the floor elevation grid from
the roof elevation grid. Surfer’s gridding algorithms can also be set by the user, e.g. krigging or inverse
square distance.
Washproduct Software® was used to calculate analytical qualities in preference to Minex as the
process of validation, standardisation and compositing is more transparent using the Washproduct
Software®. Washing simulation can also easily be re-iterated using Washproduct Software®.
4.2.3 Coal Resource Estimation
Estimation of the resource was achieved using the gridding software MINEX. Volume calculations
were based on the figures derived from the models created in MINEX. Checks on these calculations
were undertaken in Surfer, using the original data generated in MINEX.
158
4.3 Gross In-situ Coal Resource Volumes
In terms of the SAMREC Code portions of a deposit that do not have a reasonable prospect for eventual
economic extraction must not be included as coal resources.
In regard to estimating coal volumes for the estimation of Gross Tonnes In-Situ (“GTIS”) coal resources, a
number of factors were considered as cut-off criteria.
In the Sterkfontein Project area these parameters are:
No. 4 Seam Bituminous
• Minimum height 1.40 metres
• Dry ash-free volatiles 26%
In the Delmas Project area these factors were different for each of the seams:
No. 5 Seam Bituminous
• Minimum height 1.25 metres
• Dry ash-free volatiles 30%
No. 4 Seam bituminous
• Minimum height 2.00 metres
• Dry ash-free volatiles > 26%
No. 4 Seam pseudo anthracite
• Minimum height 2.00 metres
• Dry ash-free volatiles < 26%
No. 2 Seam bituminous
• Minimum height 2.00 metres
• Dry ash-free volatiles > 24%
No. 2 Seam pseudo-Anthracite
• Minimum height 2.00 metres
• Dry ash-free volatiles < 24%
The following sections give details of the coal characteristics for the deposits of the Delmas and Sterkfontein
Project areas:
4.3.1 Delmas Project Area
4.3.1.1 Introduction
The potentially economic seams encountered in the project area are the No. 5, No. 4 and
No. 2 Seams in descending stratigraphic order. Sections generated for geological modelling
show that the dykes are not vertical and intersect the seams at different positions, resulting
in different traces when projected horizontally.
Figure 4.3.1.1_1 shows the map with the 116 boreholes used for the geological model,
including 41 historical boreholes.
159
Figure 4.3.1.1_1
Boreholes Used for Geological Modelling – Delmas Project Area
160
4.3.1.2 No. 5 Seam
Four resource areas were defined for the No. 5 Seam in the Delmas Project area, these being
the southwest (SWest), northwest (NWest), central (Central) and east (East)
(Figure 4.3.1.2_1).
Figure 4.3.1.2_2 shows that the No. 5 Seam, as presently understood, is restricted in its aerial
extent. The No. 5 Seam can be mined by underground mining or opencast methods with the
strip ratios determining the most economical mining method. The depth below surface will
also be a limiting factor when determining mining methods.
Figure 4.3.1.2_1
Map Showing the Four Resource Areas Defined for No. 5 Seam at the Delmas Project Area
161
Figure 4.3.1.2_2
Map Showing the Depth to Roof Contours for No. 5 Seam at the Delmas Project Area
162
The No. 5 Seam floor elevation contours (Figure 4.3.1.2_3) indicate that there are steep dips
to the north indicating that either the palaeo-floor has an influence on the coal parameters,
or that there could be some dislocations of the seam due to dolerite intrusions.
Figure 4.3.1.2_3
Map Showing the Floor Elevation Contours for No. 5 Seam at the Delmas Project Area
163
Based on 29 intersections, the No. 5 Seam thickness (Figure 4.3.1.2_4) varies from less than
0.13m to a maximum of 2.19m, with an average of 1.33m. The seam is best developed in the
northwest of the project area.
Figure 4.3.1.2_4
Map Showing the Thickness Contours for No. 5 Seam at the Delmas Project Area
164
The raw calorific values for the No. 5 Seam vary from 5.1 to 26.26 MJ/kg with an average
of 22.75 MJ/kg and that the overall value is best for the Central and East resource
area (Figure 4.3.1.2_5).
Figure 4.3.1.2_5
Map Showing the Raw Calorific Values for No. 5 Seam at the Delmas Project Area
165
The entire No. 5 Seam coal resource has a dry ash free volatile matter percentage greater
than 26%, thereby meeting one of the minimum quality parameters for Eskom coal
(Figure 4.3.1.2_6). The dry ash-free volatiles vary from 46.5% to 15% with an average of
34.4%. The limit used to define bituminous is 30% dry ash free volatiles and shows the best
bituminous coal to occur in the NWest and East resource areas.
Figure 4.3.1.2_6
Map Showing the Dry Ash-Free Volatile Matter Content for No. 5 Seam at the Delmas
Project Area
166
4.3.1.3 No. 4 Seam
Figure 4.3.1.3_1 gives the resource areas defined for No. 4 Seam at the Delmas Project area.
The No. 4 Seam in the Delmas Project area is a composite seam comprising up to four
different coal seams.
The depth to roof contours for No. 4 Seam and the thickness contours are represented in
Figures 4.3.1.3_2 and 4.3.1.3_4, respectively. The seam is shallowest in the southern parts of
the East, Central and West resource areas and for the most part will be able to be extracted
via opencast mining methods with only the northern parts of the East and Central resource
areas being too deep for opencast mining. The No. 4 Seam is best developed in the northern
and central parts of the West resource area and in the northern parts of the Central and East
resource areas (Figure 4.3.1.3_4).
Figure 4.3.1.3_1
Map Showing the Three Resource Areas Defined for No. 4 Seam at the Delmas Project
Area
167
Figure 4.3.1.3_2
Map Showing the Depth to Roof Contours for No. 4 Seam at the Delmas Project Area
168
Figure 4.3.1.3_3
Map Showing the Floor Elevation for No. 4 Seam at the Delmas Project Area
169
Based on 61 intersections, the seam varies from a minimum thickness of only 0.6m, to a
maximum of 10.4m, averaging 5.8m.
Figure 4.3.1.3_4
Map Showing the Thickness Contours for No. 4 Seam at the Delmas Project Area
170
The raw CV for the No. 4 Seam varies from 4.0 MJ/kg to 25.81 MJ/kg with an average of
17.24 MJ/kg (Figure 4.3.1.3_5). The raw CV allows mainly for an Eskom product.
Figure 4.3.1.3_5
Map Showing the Raw Calorific Values for No. 4 Seam at the Delmas Project Area
171
The dry ash-free volatile matter for the No. 4 Seam varies from 14.3 % to 40.2% with an
average of 30.8% (Figure 4.3.1.3_6). The sub-division of the No. 4 Seam resources into
bituminous coal and pseudo-anthracite was based on a 26% dry ash-free limit.
Figure 4.3.1.3_6
Map Showing the Dry Ash –Free Volatile Matter Content for No. 4 Seam at the Delmas
Project Area
172
4.3.1.4 No. 2 Seam
Figure 4.3.1.3_1 gives the three resource areas defined for No. 2 Seam at the Delmas Project
area. The areas shown as 2 SWest and 2 NWest are referred to in this report as the West
resource areas.
The depth to roof contours for No. 2 Seam and the thickness contours are represented in
Figures 4.4.1.4_2 and 4.4.1.4_4, respectively. The depth to the roof of No. 2 Seam varies
between 8.4m below surface to 107.7m below surface with an average depth of 58.4m. The
seam is shallowest in the eastern parts of the East and Central resource areas and the
southern part of the NWest resource area. The seam’s distribution seems to be controlled by
the nature of the Dwyka topography with the seam absent over basement highs. The No. 2
Seam is best developed in the northern and central parts of the East resource area and on
the boundary between the Central and NWest blocks.
Figure 4.3.1.4_1
Map Showing the Three Resource Areas Defined for No. 2 Seam at the Delmas Project
Area
173
Figure 4.3.1.4_2
Map Showing the Depth to Roof Contours for No. 2 Seam at the Delmas Project Area
174
The floor elevation of the No. 2 Seam is controlled by the Dwyka/karst topography.The floor
elevation varies from 1,484 mamsl to 1,520 mamsl with an average elevation of
1,520 mamsl.
Figure 4.3.1.4_3
Map Showing the Floor Elevation for No. 2 Seam at the Delmas Project Area
175
Based on 59 intersections, the seam varies from a minimum thickness of only 0.3m, to a
maximum of 11.2m, averaging 5.4m.
Figure 4.3.1.4_4
Map Showing the Thickness Contours for No. 2 Seam at the Delmas Project Area
.
176
The seam is shallowest in the eastern parts of the East and Central resource areas and the
southern part of the NWest resource area.The seam’s distribution is controlled by the nature
of the Dwyka topography/karst topography of the underlying dolomite, with the seam
absent over basement highs.
The raw CV’s vary from 3.0 MJ/kg to 24.7 MJ/kg with an average of 16.9 MJ/kg
(Figure 4.3.1.4_5). Based on these values the best areas of the No. 2 Seam occur in the
southern Central and eastern West resource areas.
The dry ash-free volatiles vary from 13.5% to 43% with an average of 31.5%. A 24% dry
ash-free volatile limit was used to delineate the No. 2 Seam bituminous coal from the
pseudo-anthracite in the Delmas Project area (Figure 4.3.1.4_6). It is evident that the
pseudo-anthracite covers almost the entire West resource area as well as parts of the Central
resource area.
Figure 4.3.1.4_5
Map Showing the Raw Calorific Values for No. 2 Seam at the Delmas Project Area
177
Figure 4.3.1.4_6
Map Showing the Dry Ash-Free Volatile Matter Content for No. 2 Seam at the Delmas
Project Area
178
4.3.1.5 Raw Coal Qualities for the Delmas Project Area
Table 4.3.1.5_1 gives the raw coal qualities for the various seams at the Delmas Project area.
Table 4.3.1.5_1
Keaton Energy Holdings Coal Projects
Average Raw Coal Qualities for the Various Seams at the Delmas Project Area
Seam Moisture Ash Volatiles DAF Vols Sulphur CV
(%) (%) (%) (%) (%) (MJ/kg)
No. 5 Bituminous 4.01 26.02 23.98 34.40 1.38 22.75
No. 4 Bituminous 3.93 38.93 18.57 33.17 1.08 17.24
No. 2 Bituminous 3.71 40.34 17.31 32.51 0.84 16.50
No. 4 pseudo-
Anthracite 3.98 41.00 13.48 24.51 1.07 17.43
Table 4.3.1.6_1 gives the coal volumes for the Delmas Project area seams.
Table 4.3.1.6_1
Keaton Energy Holdings Coal Projects
Coal Volumes for the Delmas Project Area
Average
Resource Area Size Thickness Volume
(Hectares) (metres) (m3)
Bituminous Coal – Delmas Project Area
No. 5 Seam – SWest 20.20 1.39 284,300
– Central 95.71 1.48 1,394,600
– NWest 24.55 1.51 731,800
– East 24.29 1.53 368,500
No. 5 Seam Bituminous 2,779,200
No. 4 Seam – Central 258.70 7.00 18,229,500
– East 109.70 6.32 6,827,400
– West 261.24 6.73 16,236,300
No. 4 Seam Bituminous 41,293,200
No. 2 Seam – Cent 321.74 6.78 21,826,500
– East 180.47 4.07 7,049,000
– West 196.89 6.73 14,450,100
No. 2 Seam Bituminous 43,325,600
Pseudo-Anthracite – Delmas Project Area
No. 4 Seam 382.38 5.22 18,801,200
No. 2 Seam 329.91 5.44 17,332,200
Pseudo-Anthracite 36,133,400
179
4.3.2 Sterkfontein Project Area
4.3.2.1 Introduction
The No. 4 Seam is the only potentially economic seam on the Sterkfontein Project area.
For the Sterkfontein Project area, three distinct resource areas have been defined based on
their geographic locations, borehole densities and geological understanding. These are
referred to from north to south as the North 1, North 2 and South resource areas,
respectively (Figure 4.3.2.1_1). The North 1 resource area includes the farms Kaffirskraal
148 IS and Wildan 557 IS, the North 2 resource areas Sterkfontein 299 IS (Portions 4, 20, 21, 25
and 34) and Goedehoop 301 IS (Portion 4). The South resource area is covered by the farms
Sterkfontein 299 IS (Portion 1) and Palmietfontein 307 IS (Portion 3).
A large area of the farm Kaffirskraal 148 IS of the Sterkfontein Project area was not evaluated
due to the fact that KEH was not permitted surface access to this farm. Due to time
constraints, KEH chose not to pursue this portion in the first phase of exploration drilling,
but will conduct exploration drilling in a subsequent exploration drilling phase. It should be
noted that under the MPRDA, KEH is entitled to prospect and to carry out all other activities
incidental to prospecting (see Appendix 2 for more details). In addition, there are no legal
proceedings preventing any prospecting.
Figure 4.3.2.1_1 and Figure 4.3.2.1_2 show the maps for respectively the Sterkfontein North
and Sterkfontein South blocks with the locations of the 119 boreholes used for the
geological model.
180
Figure 4.3.2.1_1
Boreholes Used for Geological Modelling – Sterkfontein North Block
181
Figure 4.3.2.1_2
Boreholes Used for Geological Modelling – Sterkfontein South Block
182
Figure 4.3.2.1_3
Map Showing the Coal Resource Blocks for No. 4 Seam at the Sterkfontein Project Area
4.3.2.2 Characteristics of No. 4 Seam at Sterkfontein Project Area
The No. 4 Seam is the only seam of economic importance in the entire Sterkfontein Project
area. The depth to roof of the No. 4 Seam varies from 107m below surface to 204m below
surface and averages 160m below surface.The roof elevation averages 1,477.9m above mean
sea level with a maximum of 1,535.0m and a minimum of 1,455.9m.
The south central region of the North 2 resource area is slightly deeper than the eastern or
western regions.
183
Figure 4.3.2.2_1
Map Showing the Depth to Roof Contours for No. 4 Seam at the Sterkfontein Project
Area
184
Figure 4.3.2.2_2
Map Showing the Floor Elevation for No. 4 Seam at the Sterkfontein Project Area
Based on a total of 82 intersections the seam has a minimum thickness of 0.2m and a
maximum of 2.9m with an average of 1.9m. In the North 1 resource area the seam is thin
(less than 1m thick) in the eastern blocks (Figure 4.3.2.2_3), thickening to nearly 3m in the
central area.
185
In the North 2 and South resource areas the No. 4 Seam is thin (less than 1m thick) in the
far east of these areas. The No. 4 Seam is particularly well-developed in the central regions
of these areas, where seam thickness may reach 3.4m. For the whole project area the area
of thickest development seems to form an arcuate pattern stretching from the south west
in the North 1 resource area, through the central North 2 resource area to the western South
resource area.
Figure 4.3.2.2_3
Map Showing the Thickness Contours for No. 4 Seam at the Sterkfontein Project Area
Figure 4.3.2.2_4 illustrates that the North 1 resource area has a distinctly higher raw CV than
the rest of the project area.
186
Figure 4.3.2.2_4
Map Showing the Raw Calorific Values for No. 4 Seam at the Sterkfontein Project Area
187
Figure 4.3.2.2_5 gives the raw volatile matter content and shows that the values are clearly
higher for the two North resource areas compared to the South resource area.
188
4.3.2.3 Raw Coal Qualities for the Sterkfontein Project Area
Table 4.3.2.3_1 gives the raw coal qualities for the No. 4 Seam at the Sterkfontein
Project area.
Table 4.3.2.3_1
Keaton Energy Holdings Coal Projects
Raw Coal Qualities for the No. 4 Seam at the Sterkfontein Project Area
Seam Moisture Ash Volatiles Sulphur CV
(%) (%) (%) (%) (MJ/kg)
No. 4 3.41 26.94 26.72 1.42 21.85
4.3.2.4 Coal Volumes for the Sterkfontein Project Area
Table 4.3.2.4_1 presents the coal volumes estimated at the Sterkfontein Project area for
No. 4 Seam.
Table 4.3.2.4_1
Keaton Energy Holdings Coal Projects
Coal Volumes for the Sterkfontein Project Area
Average
Resource Area Size Thickness Volume
(Hectares) (Metres) (m3)
No. 4 South 438 2.82 12,350,217
No. 4 North 1 149 1.70 2,539,843
No. 4 North 2 559 1.87 10,455,918
Total No. 4 Seam 25,345,978
4.4 Gross In-situ Resources
4.4.1 Relative Density
Table 4.4.1_1 summarises the relative densities used for the various seams to convert calculated coal
volumes to gross in-situ tonnage (“GTIS”) resources. The values are derived from the raw relative
densities reported by the laboratories. All the samples that make up a seam are then composited for
each seam and for each borehole. Where there are missing lab RD’s, the relative densities are derived
from washing algorithms that calculate the relative densities from the percentage raw ash in the
seam. The composited seam value is then averaged using seam thickness as a weighting factor to
arrive at average relative densities for each seam.
189
Table 4.4.1_1
Keaton Energy Holdings Coal Projects
Relative Densities Used for the Various Seams
Area Relative Density Used
Delmas Project Area – Bituminous Coal
No. 5 Seam – S West 1.55
– Central 1.60
– N West 1.57
– East 1.55
No. 4 Seam – Central 1.68
– East 1.71
– West 1.65
No. 2 Seam – Central 1.65
– East 1.71
– West 1.77
Delmas Project Area – Pseudo-Anthracite
No. 4 Seam – Central 1.78
– East 1.67
– West 1.74
No. 2 Seam – Central 1.67
– East –
– West 1.75
Sterkfontein Project Area
No. 4 Seam – South 1.55
– North 1 1.56
– North 2 1.59
4.4.2 Statement of Gross In-situ Resources
Table 4.4.2_1 presents the estimated gross in-situ tonnes for each area and coal seam based on the
contoured drill results and the assumed relative densities reflected in Table 4.4.1_1.
The table shows that there are 148.3Mt bituminous coal and 64.7Mt of pseudo-anthracite at the
Delmas Project area and 39.8Mt of bituminous coal at the Sterkfontein Project area.
190
Table 4.4.2_1
Keaton Energy Holdings Coal Projects
Gross In-Situ Tonnage for the Project Areas
Relative
Resource Area Volume Density Tonnage
(m3) (’000 tonnes)
Delmas Project Area*
No. 5 Seam – S West 284,300 1.55 400
– Central 1,394,600 1.60 2,200
– N West 731,800 1.57 1,000
– East 368,500 1.55 600
No. 5 Seam Bituminous 2,779,200 4,200
No. 4 Seam – Central 18,229,500 1.68 30,900
– East 6,827,400 1.71 11,700
– West 16,236,300 1.65 28,000
No. 4 Seam Bituminous 41,293,200 70,600
No. 2 Seam – Central 21,826,500 1.65 36,000
– East 7,049,000 1.71 12,100
– West 14,450,100 1.77 25,300
No. 2 Seam Bituminous 43,325,600 73,400
Sub Total Bituminous 87,398,000 148,200
No. 4 Seam – Central 3,663,800 1.78 6,200
– East 661,200 1.67 3,400
– West 14,476,200 1.74 25,200
No. 4 Seam pseudo-Anthracite 18,801,200 34,800
No. 2 Seam – Central 5,465,100 1.67 9,100
– East – –
– West 11,867,100 1.75 20,700
No. 2 Seam pseudo anthracite 17,332,200 29,800
Sub-Total pseudo anthracite 36,133,400 64,600
Total Delmas Project Area 123,531,400 212,800
Sterkfontein Project Area@
No. 4 South 12,350,200 1.55 19,200
No. 4 North 1 2,539,800 1.56 4,000
No. 4 North 2 10,455,900 1.59 16,600
Sub-Total 25,345,900 39,800
Grand Total 148,877,300 252,600
@ UG = Underground
* OC= Opencast
191
4.5 Mineable In-situ Resources
4.5.1 Geological Loss
The geological losses applied to the various seams are summarised in Table 4.5.1_1 for the various
areas. The estimated losses are based on industry standards for geological losses depending on the
level of confidence in the estimated GIST with 10% applicable for a drill density for Measured Coal
Resources to 30% for Inferred Coal Resources.
A larger loss of 30% has been used for the pseudo anthracite as this is a dolerite affected coal and
high coal losses are expected due to possible structural complexities.
Table 4.5.1_1
Keaton Energy Holdings Coal Projects
Geological Losses Applied to the Various Seams in the Various Areas
Geological Losses
Area Seam Assumed
(%)
Delmas Project Area Bituminous 5 15
4 15
2 15
Delmas Project Area pseudo-Anthracite 4 30
2 30
Sterkfontein Project Area
North 1 4 15
North 2 4 15
South 4 10
4.5.2 Minimum Mining Parameters
In regard to estimating the Mineable In-Situ Tonnage (“MTIS”), anticipated mining tonnages, coal
qualities, plant recoveries, operating costs or forecast revenue were not considered other than to test
the reasonable and realistic prospect of the coal projects.
A mining width of 1.4m was determined to be the minimum width allowable for mobile mining
equipment and economic extraction. This mining cut-off was confirmed with KEH’s mining
consultants, Ukwazi Mining Group.
To convert the GTIS coal resource estimates to MTIS coal resource estimates only the geological
losses listed in Table 4.5.1_1 were applied.
4.5.3 Mining and Geotechnical Considerations
No consideration has been made with respect to mining factors or assumptions.
4.5.4 Results of Washability Tests
4.5.4.1 Delmas Project Area
Figure 4.5.4.1_1 illustrates that No. 5 Seam yields are generally in excess of 70% when
washed to a 25% ash content with the best yield towards the east of the No. 5 Seam
resource.
Figure 4.5.4.1_2 shows the washing yield of the No. 4 Seam is generally in excess of 50%,
when washed to a 25% ash content, except for a central region and the far western portion
of the resource.
192
Figure 4.5.4.1_3 shows the washing yield of the No. 2 Seam is generally in excess of 50%,
when washed to a 25% ash content, except for a southwestern portion and in the far
northeast of the resource.
Figure 4.5.4.1_1
Yield Contours for No. 5 Seam Coal at the Delmas Project Area Washed to a 25% Ash
Content
193
Figure 4.5.4.1_2
Yield Contours for No. 4 Seam Coal at the Delmas Project AreaWashed to a 25% Ash
Content
194
Figure 4.5.4.1_3
Yield Contours for No. 2 Seam Coal at the Delmas Project Area Washed to a 25% Ash
Content
195
4.5.4.2 Sterkfontein Project Area
Figure 4.4.4.2_1 gives the primary washing yield for the No. 4 Seam in the Sterkfontein
Project area. The yields are reasonable over large areas and the quality of the No. 4 Seam in
the Sterkfontein Project area lends itself to beneficiation. The coal, once beneficiated, could
produce an export quality prime product at an average theoretical yield of 50% with a
middlings product at a theoretical yield of 33% (Figure 4.4.4.2_2) that is suitable for local
power stations.
Figure 4.5.4.2_1
Primary Washing Yield Contours for No. 4 Seam Coal at the Sterkfontein Project Area
196
Figure 4.5.4.2_2
Yield Contours for No. 4 Seam Middlings at the Sterkfontein Project Area Washed to a
20CV/kg Product
197
Table 4.5.4.2_1 gives the raw coal qualities for the No. 4 Seams at the Sterkfontein Project
area.
Table 4.5.4.2_1
Keaton Energy Holdings Coal Projects
Washed Coal Qualities for the No. 4 Seam at the Sterkfontein Project Area
Product Moisture Ash Volatiles Fixed Carbon Sulphur CV Yield
% % % % % (MJ/kg) %
Primary
Washed 3.82 11.94 33.17 51.07 1.15 27.5 50.17
Middling
Washed 3.46 20.26 23.42 42.88 1.34 20.5 33.45
4.5.5 Summary of Assumptions Underlying the Mineable Coal Resource Estimation
For the Delmas No. 5 Seam the following assumptions and modifying factors have been applied to
convert GTIS to MTIS:
• Raw RD based on forecast RD’s using MINEX proprietary software.
• Dry ash-free volatile cut-off for coal resource estimation was 30% (which is the range in which the
No. 5 Seam shows devolatilisation due to dolerite intrusions).
• Minimum seam thickness of 1.25m.
• Geological losses of 15%.
• All tonnages and qualities are quoted air dry.
For the Delmas No. 4 Seam and No. 2 Seam the following assumptions and modifying factors have
been applied to convert GTIS to MTIS:
• Raw RD based on forecast RD’s using MINEX proprietary software.
• Dry ash-free volatile cut-off for coal resource estimation was 26% for the No. 4 Seam (which is
the level below which the No. 4 Seam shows devolatilisation due to dolerite intrusions) and 24%
for the No. 2 Seam (which is the level below which the No. 2 Seam shows devolatilisation due to
dolerite intrusions).
• Coal below the dry ash-free volatile cut-off was reported in the pseudo-anthracite category. Coal
above this value was classified as bituminous coal.
• Minimum seam thickness of 2.0m.
• Geological losses of 15% for bituminous coal and 30% for pseudo-anthracite.
• All tonnages and qualities are quoted air dry.
• To convert the GTIS to MTIS, the following assumptions and modifying factors have been applied
to the Sterkfontein No. 4 Seam:
• Raw RD is based on forecast RD’s using MINEX proprietary software.
• Dry ash-free volatile cut-off for coal resource estimation is 26%, which is the accepted value
for South African coal when unaffected by weathering or dolerite intrusions.
• Minimum seam thickness of 1.4m based on the minimum practical mining width commonly
applied in South Africa.
• Geological losses between 10% and 15%.
• All tonnages and qualities are quoted air dry.
4.5.6 Mineable Coal Resource Statement and Classification
The Mineable Coal Resource estimate for the Delmas and Sterkfontein Projects areas is presented
below in Table 4.5.6_1 together with the associated SAMREC Code classification. The classifications
are based on the Competent Person’s view of the complexity of the geology, coal qualities and the
drill density expressed in hectares per borehole as summarised in Table 4.5.6_2.
198
Table 4.5.6_1
Keaton Energy Holdings Coal Projects
Mineable In-Situ Tonnage for the Various Properties
Resource Area Gross In-Situ Mineable In-Situ
Tonnes Geological Tonnes
(‘000 tonnes) (%) (‘000 tonnes) Classification
Delmas Project
No. 5 Seam – S West 400 15 300 Inferred
– Central 2,200 15 1,900 Indicated
– N West 1,000 15 900 Measured
– East 600 15 500 Measured
No. 5 Seam Bituminous 4,200 3,600
No. 4 Seam – Central 30,900 15 26,300 Indicated
– East 11,700 15 10,000 Measured
– West 28,000 15 23,800 Indicated
No. 4 Seam Bituminous 70,600 60,100
No. 2 Seam – Central 36,000 15 30,700 Indicated
– East 12,100 15 10,300 Measured
– West 25,300 15 21,500 Measured
No. 2 Seam Bituminous 73,400 62,500
Sub-Total Bituminous 148,200 126,200
No. 4 Seam – Central 6,200 30 4,400 Indicated
– East 3,400 30 2,400 Measured
– West 25,200 30 17,600 Indicated
No. 4 Seam Pseudo-
Anthracite 34,800 24,400
No. 2 Seam – Central 9,100 30 6,400 Indicated
– East
– West 20,700 30 14,500 Measured
No. 2 Seam Pseudo-
Anthracite 29,800 20,900
Sub-Total Pseudo-
Anthracite 64,600 45,300
Total Delmas Project 212,800 171,500
Sterkfontein Project
No. 4 South 19,200 10 17,300 Measured
No. 4 North 1 4,000 15 3,400 Indicated
No. 4 North 2 16,600 15 14,100 Indicated
Sub-Total 39,800 34,800
Grand Total 252,600 206,300
Table 4.5.6_2 only includes boreholes within the defined mineable in-situ resource blocks to calculate
the drill density as per the guidelines in Table 3.2.2_1 for defining resource categories.
199
Because of the complexity of the geology at the Delmas Project area, 10 hectares per borehole was
taken as the maximum figure for classification of resources into the Measured Mineral Resource
category.Analyses of the coal intersected on 65 of the 85 new drilled boreholes were received in time
for inclusion in the analytical modelling. A number of boreholes were negative (no coal intersected)
and a few were burnt by dolerite intrusions.
In the Sterkfontein Project area, of 89 boreholes which intersected the No. 4 Seam analyses were
received in time for inclusion in the analytical modelling. There were sufficient boreholes with both
physical and analytical data to be classified according to the SAMREC Code as per Table 3.2.2_1. The
South resource block has been classified as a Measured Mineral Resource even though its drill density
falls just short of the guideline, because of the good geological continuity, the consistency of the coal
qualities and lack of geological complications.
Table 4.5.6_2
Keaton Energy Holdings Coal Projects
Drill Density for the Various Properties
Boreholes Hectares Hectares/borehole
Delmas Project
No. 5 Seam – S West 3 131.84 43.9
– N West 2 2.55 1.3
– Cent 11 123.76 11.3
– East 9 54.32 6.0
No. 4 Seam – Central 18 258.70 14.4
– East 16 109.98 6.9
– West 23 263.55 11.5
No. 2 Seam – Central 24 321.74 13.4
– East 18 180.47 10.0
– West 23 203.05 8.8
Sterkfontein Project
No. 4 South 34 437,82 12.9
No. 4 North 1 8 149,36 18.7
No. 4 North 2 14 559,11 39.9
5. CONCLUDING REMARKS
The Delmas and Sterkfontein Projects areas contain combined mineral resources of 206Mt, of which 77Mt are in
the Measured Mineral Resources category; 128Mt are Indicated Mineral Resources; and 0.3Mt are Inferred Mineral
Resources in terms of the SAMREC Code.
A large portion of the Delmas Project area is exploitable from surface mining methods. It is anticipated that the
Delmas Project area will produce multiple products: a low grade power station product, a pseudo-anthracite
product with potential for a small proportion of high grade export product (No. 5 Seam). It is recommended that
KEH conduct further in-fill drilling to increase the Measured Mineral Resource category for the potential opencast
areas of the project. In addition, it is recommended that further exploration drilling is conducted on the No. 5 Seam.
The Sterkfontein Project area contains a mineral resource of 35Mt of which 17Mt is in the Measured Mineral
Resource category and 17Mt is in the Indicated Mineral Resource category. Further investigation is recommended
to establish the viability of underground mining of this measured mineral resource. Furthermore, additional
exploration drilling is suggested in the northern section of Sterkfontein to increase the mineral resource and
confidence levels.
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