ASX-listed coal miner Universal Coal has announced a JORC Code compliant update to the ore reserve for the North Block Complex, or NBC, in the Mpumalanga Province, South Africa of 55.5 Mt.
This represents an increase of 98.4% (or 27.54 Mt) on the previously advised 27.96 Mt SAMREC Code compliant ore reserve.
Universal Coal completed the acquisition of NBC, the company’s third fully-operational colliery, in early November. Since completing the acquisition, the company has commenced increasing production towards its monthly target of 200 000 tpm of saleable product.
The company is pleased to report 208 000 tpm was produced for the month of November. Production levels for the year to date at NBC have averaged 140 000 tpm.
The November result demonstrates the achievement of a significant turnaround by the Universal operational team since NBC’s acquisition. Universal is confident that November’s rate of production can be maintained going forward, with all saleable product expected to be sold for domestic supply to Eskom.
The increased production rate at NBC is in line with the historical production rates (over the years between 2013 and 2017) which averaged a ROM production of circa 3.5 Mtpa, similarly with sales of around 2.7 Mtpa.
The development of the adjacent Paardeplaats project is expected to commence in FY2020 (subject to the receipt of all regulatory approvals). Paardeplaats is anticipated to be a lower quartile cost operation, with a substantial resource base to increase the current reserve well in excess of the current 58.4 Mt ROM over a life of mine in excess of 15 years at an average stripping ratio of 2.81:1 (bcm:tonne).
The volumes contributed by NBC will increase Universal’s current annual coal production of 5.1 Mtpa from its existing collieries, to an annualised forecast of up to 7.5 Mtpa.
“The delivery of a 98% increase to the NBC ore reserve is a tremendous achievement by our operational team and further validates the strategic rationale to acquire the NBC project,” says
“The quick turnaround to full production at NBC has been well executed and proves the ability of the management team on site. It is prudent to say that the mine has transitioned well under the new management and we are proud to include the NBC under the Universal Coal banner.
“With historical production levels now restored at the North Block Complex, the project will add up to ~2.4Mtpa to the company’s production outlook for the next 15 years, significantly bolstering our saleable product pipeline.