Acquires Interest in South African Coal Company

Sable Mining Africa Ltd / Index: AIM / Epic: SBLM / Sector: Natural Resources

17 February 2010

Sable Mining Africa Limited ('Sable Mining' or 'the Company')

Acquires a 29.33% interest in South African Coal Company Delta Mining Consolidated Ltd

Sable Mining Africa Limited, the AIM listed resource investment company, has unconditionally agreed to acquire through a wholly owned subsidiary, a 29.33% interest in South African-based exploration and mining company, Delta Mining Consolidated Ltd ('DMC'), from minority shareholders, for a cash consideration of US$17,588,863. This acquisition provides Sable Mining with exposure to DMC's four major coal interests in South Africa and Botswana and is in line with the Company's stated investment strategy to invest in exploration and development projects in coal and uranium assets in sub-Saharan Africa. 

Overview

·; Acquiring 29.33% of Delta Mining Consolidated Ltd for a cash consideration of US$17,588,863

·; DMC controls four major projects in established coal producing regions, all with active development programmes in place to raise their current resource base

·; Feasibility study close to completion at Rietkuil coal deposit - short term production potential utilising current metallurgical and thermal coal resource of 200 million tonnes

·; Springbok Flats project has in-situ gross tonnages currently modelled at over 2 billion tonnes of metallurgical and thermal coal

·; Limpopo coal project has a current provisional gross in-situ tonnage estimate in excess of 135 million tonnes and a resource target of 400 million tonnes of metallurgical and thermal coal

·; 12 greenfield concession blocks covering 8,682 sq km and straddling known coal bearing sediments in eastern Botswana

Sable Mining CEO Andrew Groves said, "This deal to acquire a 29.33% stake in DMC represents our first transaction aimed at building Sable into a major mining company focussed in southern Africa. DMC has a well defined coal portfolio which we believe we can actively assist in its development, through the application of our combined experience covering a range of natural resource development companies in sub-Saharan Africa. We have a defined strategy that has been supported by our institutional shareholder base, who have committed capital to the Company based on our ability to source projects that we can enhance through our operational expertise. We are excited about the future development of Sable, working closely with DMC in rapidly advancing its coal portfolio and identifying additional opportunities that will fulfil our investment strategy."

DMC has a portfolio of coals assets primarily in South Africa and Botswana at various stages of development. These include:

South Africa

The 2,800 hectare 70% owned Rietkuil Project is situated near Delmas, in the Mpumalanga Province in northern South Africa and has a current gross in-situ coal resource estimate of 200 million tonnes (comprising 146 million tonnes measured resource and 54 million tonnes indicated resource). This resource estimate has been prepared according to SAMREC guidelines but has not formally been approved by a third party competent person. A bankable feasibility study on the project is being concluded and, when complete, will enable commencement of a mining programme. The area has established infrastructure, is coal producing and is close to the South African state-owned power utility Eskom's Kendal and Grootvlei power stations.

The 5,300 hectare 51% owned Springbok Flats Project is situated less than 80km from Pretoria and constitutes a large part a major undeveloped coal field in South Africa. There are approximately 290 historical boreholes on the project with in-situ tonnages currently modelled by DMC at over 2 billion tonnes. Situated close to existing modern infrastructure, the project has potential for coking and thermal coal.

The 69.65% owned Limpopo coal project consists of three contiguous blocks, South, Riedel and North, which cover 7,500 hectares and are adjacent to the Vele Project of London quoted Coal of Africa plc. DMC has a current provisional gross in-situ tonnage estimate in excess of 135 million tonnes and a resource target of 400 million tonnes of metallurgical and thermal coal.

Botswana

Included in DMC's portfolio are 12 greenfield concession blocks covering 8,682 sq km and straddling known coal bearing sediments in eastern Botswana. The bulk of these blocks are in the same coal field of Morupule Colliery, which provides circa 80% of the country's domestic power generation. 

Background on DMC

DMC, led by CEO Heine van Niekerk, is an exploration and mining trading group company based in South Africa. The company has a portfolio of assets with substantial growth potential, through exploration, mining development and beneficiation. The management team are highly experienced and innovative in resource development, and have the ability to capitalise on multiple resource opportunities available in southern Africa. In the year ended 30 September 2009, DMC made a loss before tax of ZAR 49.3 million (US$ 6.4 million) and as at 30 September 2009 it has net assets of ZAR 153.2 million (US$ 19.9 million).

** ENDS **

For further information please visit www.sablemining.com or contact: