Aerial view of Universal Coal's NCC operation, still on care and maintenance
Aerial view of Universal Coal's NCC operation, still on care and maintenance

South Africa - Universal Coal, the ASX-listed coal company mining the Kangala colliery near Delmas in South Africa, has extended the lifespan of its NCC project to 20 years following massive increases to its reserves and resources.

More specifically, Universal Coal has achieved a 289% increase in coal reserves at NCC to 40.75 Mt and a 20% increase in coal resources to 165.4 Mt.

Universal Coal acquired the underground NCC (New Clydesdale Colliery), currently on care and maintenance, from Exxaro. It also sits adjacent to its undeveloped Roodekop project.

The upgraded resource and reserve estimate for the NCC project, reported in accordance with the JORC 2012 code, follows the development of a resource model for the integrated NCC and Roodekop projects in preparation of the Bankable Feasibility Study that is due for completion and presentation to the Board later this month.

Located in the Witbank coalfields near Johannesburg, NCC is poised to become Universal Coal’s next operation, with first coal expected in the second half of this year. The first phase of development will produce 2 Mtpa run-of-mine (ROM) over an initial ten year period.

The reserve remaining after this initial 10 years is sufficient to double the life of NCC.

“We are entering an exciting growth phase with NCC which is set to double the company's production once at steady-state. The trebling of the reserves confirms NCC as a long-life, multi-product operation and further enhances the financial robustness of the project,” says Universal Coal's CEO Tony Weber.

NCC development progress

Ministerial approvals in terms of Section 11 are imminent, and expected to be finalised during the current quarter.

Universal Coal is well advanced with negotiating long term Coal Sales Agreements (CSA) with both domestic power and metallurgical off-takers for its product.

The opencast tender process for the mining at Roodekop has been completed and a preferred contractor nominated. Contractual agreements are in the process of being drafted. The tender process for the operation of the processing plant has commenced with the tender documents being released to pre-selected parties during April 2015.

Debt funding proposals for the financing of the balance of the NCC mine development programme are well advanced with local banking institutions, the results of which will be announced to the market in due course.

Once in full production, the company will proceed with the second phase of the feasibility into the expansion of NCC with the development of its underground resource base for the export markets.

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