Universal hits milestones, ups ownership

UNIVERSAL Coal has increased its ownership in its Berenice coking coal project in South Africa to 50%.

Staff Reporter

The increase in ownership comes under its earn-in agreement after the completion of a second phase of drilling and the publication of an updated resource estimate.

The company can increase its stake in the Berenice project to 74% via achievement of other milestones and will move towards a prefeasibility study.

Berenice is located in the Limpopo region and has a sizeable total coking coal resource of 1.35 billion tonnes, of which 1.23Bt is in the measured and indicated category.

Of the total resource, 675 million tonnes are attributable to the company.

The company highlighted that the mine was located outside environmentally sensitive areas and within 30km of existing rail infrastructure, currently being used to export coal out of the Matola coal terminal.

“We are delighted to have completed the final step of this farm-in agreement to achieve 50% shareholding over the entire Berenice coking coal project,” Universal Coal chief executive officer Tony Weber said.

“The resource upgrade allows the next phase of the project to proceed, with a prefeasability study to commence by year-end.”

The company said it was advancing to schedule with the development of its Kangala mine, targeting first production in April 2014.

Kangala is Universal’s first operation, a domestic thermal coal operation supplying coal primarily to Eskom.

The announcements come after Universal last month announced its results for the six months ended December 31, 2012.

The company posted a loss of $3.4 million.

“Universal Coal is a near-term coal exploration company and had no mines operating in the period,” the company said in the results release.

“The loss was attributable mainly to operating, administration, regulatory and finance costs.”

Universal’s coal assets are all located in South Africa.

The company has three thermal exploration coal projects in the Witbank coalfield in Mpumalanga Province and two exploration coking coal projects in Limpopo Province.