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Masama Coal Mine records first commercial sale

Publishing Date : 10 September, 2019

Author : AUBREY LUTE

The highly anticipated full swing of Masama Coal project owned by the Botswana Stock Exchange (BSE) listed Minergy will this month come to live hence joining Morupule Colliery Mine in the business of selling coal mine.


A market update statement from Minergy published on BSE this week reveals that the company will this month record their first commercial sales. Following successful start-up of mining operations, Minergy has exposed the first 340,000 tons of coal, which represents approximately 3 months’ name plate production. In doing so, the company has removed over 2.5m cubic metres of overburden.


Minergy says it is completing the process to sign its first long-term contract, to deliver 120,000 tons of coal per annum to one regional industrial customer, which represents approximately 10% of estimated annual saleable coal. “Discussions are underway with a number of other interested regional industrial customers, many of whom have already tested samples of our coal over the past few months,” said Minergy Chief Executive Officer, Morné du Plessis.


Further boasting in confidence about signing additional customer contracts in the coming weeks. “We are extremely pleased with both the timing and the progress made at Masama Coal Project, we are transitioning from mine development into a mining operation at full production” he said . Currently Minergy is mining 110,000 tons per month, resulting in 70,000 – 80,000 tons of saleable coal. The saleable coal target is expected to increase to 100,000 tons per month in early 2020. “Our ramp up plan is on track, several opportunities to significantly increase production will be assessed going forward,” he said.


A coal resource of 386 Mt has been defined in terms of the preliminary workings for the Masama project and comprises open castable and underground mineable resources in the measured, indicated and inferred resource categories. Open castable coal reserves are currently in the process of being calculated and ROM Coal reserves are likely to range between 55 and 65 Mt, with resultant Saleable Coal Reserves likely in the range of 30 to 40 Mt.Within the 386Mt total coal resource of Masama, approximately 82 Mt is considered open castable, giving a life of mine of 22 years. The remaining approximately 304 Mt is considered mineable by underground mining methods and could significantly extend the life of the mine.


Prior to the open castable resource being exhausted, a detailed assessment of underground mining will take place. In addition, there are also plans to conduct further exploration on the remainder of the prospecting licence, which is substantial and currently totals at 352 km2.
Morné du Plessis says depending on the economics at the time, opportunities to significantly increase production include increased supply to industrial customers, export opportunities, or power generation. “Increased production would require additional capex primarily to increase the capacity of washing plant and plant infrastructure, and completion of an additional box cut,” he said.


On the corporate fronts and capital raising efforts Minergy Head noted that progress was being made in the company’s previously stated objective of listing on the Alternative Investment Market (AIM) of the London Stock Exchange. Last month Minergy announced that  Botswana state owned industrialization  and  mining investment outfits Botswana Development Corporation (BDC) and Mineral Development Company (MDC) have injected a total amount of P160 million into Masama.


 In a statement then , Minergy revealed that P90 million capital boost from the two entities added into initial funding of P70 million bridging finance provided by both BDC & MDC for a period of six months. The statement stated that the funding will be refinanced through long-term agreements with both parties, adding that all the necessary regulatory approvals were in place and agreements have been signed with all paperwork completed.


This week Minergy also revealed that they have engaged a firm of experts to undertake significant technical work to finalize the mine plan to be conducted at Masama. “We are extremely proud of what has been achieved in a relatively short period of time, not only for Minergy but for the development of the coal sector in Botswana. Minergy has pioneered a process that will support the regional industrial demand for coal and in so doing, benefit the people of Botswana through job opportunities and vital coal skills development,” said Minergy Chief Executive Officer, Morné du Plessis.

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