10th Sep 2007 07:02
GVM Metals Ltd10 September 2007 GVM METALS LIMITED ("GVM" or the "Company") Trading Update Since the last trading update released on 6 June 2007 and the subsequent JuneQuarterly Report, the Company is pleased to announce that significant progresshas been made towards the development of the Company's coal projects in SouthAfrica. An update on work in progress and of that planned on each project is setout below: Mooiplaats (Ermelo Coalfield) • Coal of Africa Ltd granted Mining Right for areas of the Mooiplaats project • Infill drilling program on track with a measured resource of 43 million tonnes defined in the upper B seam • Company expected to shortly announce the completion of its 70 per cent interest in CoAL • Discussions continue with potential off-takers for the Mooiplaats project The Company has been advised by Coal of Africa Ltd ("CoAL"), that CoAL has beengranted a Mining Right in terms of S.23 of the Mineral and Petroleum ResourcesDevelopment Act (MPRDA), 2002 (Act 28 of 2002) on Portion 1+9 on the farmMooiplaats 290 IT, (an area of 940 hectares). This is a significant development for the project and the only conditionsprecedent remaining for completion of the Company's acquisition of a 70 percent. interest in CoAL is Ministeral Consent under S.11 of its MPRDA andCompetition Commission consent. These are expected to be granted shortly. The drilling program continues with 13 rigs on site which have now completedover 46,000 metres and some 330 holes. An inferred resource of 240 milliontonnes over the two main coal seams has been delineated within an area of some7000 Ha. 16000 Ha of the property remain to be drilled. The infill drilling program (using 350 metre hole centres), which is still inprogress, has defined a measured resource (at the time of writing) of 43 milliontonnes in the B upper seam comprising of 5.3Mt of anthracitic coal(metallurgical coal), 14.3 Mt of lean coal (which has volatile content ofbetween 10% and 20%) and 23.0 Mt of bituminous coal (thermal coal) using a 1.4metre seam thickness cutoff. SRK consultants have advised that the average coalqualities (unwashed) from the B upper seam are as follows: Measured Resources: Resources Class Tonnage Calorific Value* Ash* (%) Volatiles* (%) Fixed Carbon* (%) (MJ/kg) (Mt) Anthracitic 5.3 23.52 27.76 7.44 60.90Lean 14.3 24.54 23.13 14.58 58.69Bituminous 23.0 25.86 17.70 26.86 51.72 *on an air dried basis It should be noted that these are interim results. Washability tests are inprogress and the results are expected shortly. These results are required beforefinal product specifications can be determined. Geological modeling based on the drilling to date is being finalised and mineplanning can now commence. This in turn will allow the Company to negotiate mining contracts with thevarious contractors who have now provided provisional cost estimates. Concurrently, discussions continue with Eskom and other potential off takers.There is currently a world wide shortage of both coking and thermal coals withsupply growth falling behind demand. The Company believes that the marketoutlook for its coal assets are very good and predicted margins highlyattractive. The Company believes that it will complete mining contracts and sales agreementsfor Mooiplaats before the end of this year and progress is in line to commenceproduction in the third quarter of 2008. Holfontein (Witbank Coalfield) The drilling program at the 100 per cent. owned Holfontein project has beencompleted and a Competent Persons Report delineating a "measured resource" andproduct qualities is due for release shortly. Results are expected to be in linewith previous estimates which allow planned sales of 400,000 tpa of soft cokingcoal and 800,000 tpa of unwashed thermal coal over a mine life of twenty years.The Company expects production to commence as planned in the third quarter of2008 subject to regulatory permitting from the Department of Minerals andEnergy. Limpopo Coal Project (Thuli Coalfield) Ludik Core has been appointed as drilling contractor for GVM's 74 per cent.owned Limpopo project and site preparations have commenced. Separate contractorshave been appointed to do geotechnical and geological logging. Drilling isexpected to commence before the end of this month. East Coast Maritime (Pty) Ltd ("ECM") have been contracted to generate an "orderof magnitude" feasibility study for the rail and port infrastructure requiredfor both the Limpopo and Baobab projects. The study is approximately 25%complete and should be finalised by the middle of November. ECM has delivered apreliminary report and the Company believe the findings are extremelyencouraging both in terms of capacity and timing. Boabab (Soutpansberg Coalfield) Geomechanics have been appointed drilling contractor for this 100 per cent.owned project. A borehole for water and a campsite was completed and drillinghas commenced to revalidate previous work carried out by Iscor to bring theresources into JORC standard. The same contractors that have been used on theLimpopo projects for geotechnical and geological logging have been appointed forBoabab. For more information contact: Simon Farrell, Managing Director GVM +61 417 985 383 or +61 8 9322 6776Nonkqubela Mazwai, Deputy Managing Director, GVM +27 83 690 9079Petronella Gorrie The Event Shop +27 82 827 8815Leesa Peters / Jos Simson Conduit PR +44(0) 20 7429 6606Olly Cairns / Romil Patel Blue Oar Securities Plc +44(0) 20 7448 4400 www.gvm.com.au Notes: The information in this report as it relates to the geology, geochemistry andgeophysics, regarding Mooiplaats, has been prepared by Grant van Heerden. Grantvan Heerden has more than five years of experience in estimation, assessment of,and evaluation of Mineral Resources and Ore Reserves which are relevant to thestyle of mineralization under consideration. Grant van Heerden is a Senior CoalGeologist with SRK Consulting. Grant van Heerden has sufficient experience whichis relevant to the style of mineralisation and type of deposit underconsideration and activities herein reported, to qualify as a Competent Personas defined in the 2004 edition of the 'Australasian Code for Reporting ofExploration Results, Mineral Resources and Ore Reserves' and Part two of the AIMGuidance Notes for Mining, Oil and Gas Companies. Grant van Heerden consents tothe inclusion in this report of such information in the form and context inwhich it appears. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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