Sable Mining acquires Zimbabwe coal assets

| Friday June 4, 2010 00:00

The company would pay $3-million in cash and a further $3-million in shares at 28p a share, subject to satisfaction of certain conditions precedent.

Sable said that the transaction was part of its strategy to identify and invest in coal and iron-ore assets that could be rapidly developed to production. The Lubu coal concession is about 120 km north-east of the Hwange colliery and the Bulawayo rail line runs 100 km to the south west.

The coalfields were originally explored by Messina Transvaal Development Services (MTD), which estimated that the area had an inferred resource of 334-million tons of low-sulphur coal. The resource is principally located in the 14-m to 18-m thick main seam, which is also believed to contain coking coal in its lower section.

Sable said that the portion of Lubu for which the resources have been calculated hold the potential for opencast mining.

Considering likely extensions to the coal seams below the overlying Karoo sandstone, it had been estimated by independent consultants Behre Dolbear & Company that with further exploration and drilling, there was the potential to increase the coal resource at Lubu to 515- million tons.

Sable had now reappointed Behre Dolbear & Company to review the historical data.

Sable Mining CEO Andrew Groves said that Lubu was a major undeveloped coal resource and that the company's immediate objective would be for Monaf to initiate a drilling programme to better define the geology of the coal basin with the intention of confirming the initial 330-million tons to Samrec-compliant status.

'Once this is achieved, the intention will be that Monaf would commission a bankable feasibility study and then move towards developing the asset to production. This investment complements our current coal interests in South Africa and Botswana, which we hold through Delta Mining,' concluded Groves.