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Mmamabula Coalfield
  • Global mineral resource estimate of approximately 2.6 billion tonnes (measured and indicated)
  • Application pending for first mining licence

Location & Landholdings

CIC Energy’s coal resource is located in the Mmamabula Coalfields of southeastern Botswana, adjacent to the country’s main road and rail corridor which links the country’s capital, Gaborone, with its second
largest city, Francistown.

The Mmamabula Coalfields form the western extension of South Africa’s Waterberg Coalfield, which contains approximately half of South Africa’s coal resources, along with Eskom’s 3,690 MW (net capacity) Matimba power station and Exxaro Resources Limited’s 19 million tonne per annum Grootegeluk coal mine.  Exxaro has also been contracted to supply a further 14 million tonnes per annum to Eskom’s approximately 4,800 MW Medupi power station, now under construction.

The three exploration licences, South Block (PL 75/2002), Central Block (PL 11A/2004) and Eastern and Western Blocks (combined under one licence – PL 11/2004) are 100% owned by CIC Energy subsidiaries. The total area for the three licences is 340 square kilometres.

The Central Block will be the site of the planned coal mine (Serorome Mine) to supply the Mmamabula Energy Project’s 1,200 (net) MW power station.  The planned capacity for this coal mine will be approximately 6.3 million metric run of mine tonnes per annum, yielding 4.7 million metric sales tonnes per annum. 

In December 2008, CIC Energy submitted its application for a mining licence for the Serorome Mine to the Government of Botswana.

Figure 1: Serorome Mine layout showing sufficient reserves to supply the Mmamabula Energy Project power station for 30 years plus more than a 20% reserve margin.

The 1.3 million tonnes per annum mine that will support the 300 (gross) MW Mookane Domestic Power Project will be located in the Western Block and will utilize about one-third of this block.  In September 2010 CIC Energy submitted a mining application to the Government of Botswana for this mine.

Geology, Exploration & Mineral Resources

Since commencement of exploration by CIC Energy and its predecessor, Coal Investment Corp., in mid-2005, up to twelve drill rigs have been active concurrently on CIC Energy’s Mmamabula Coal Field. In excess of 215,000 metres has been drilled in approximately 2,100 holes and the exploration drilling program is now largely complete.

As announced in a news release of August 14, 2009, the global in situ mineral resource estimate for the Mmamabula Coal Field totals approximately 2.63 billion tonnes (“Bt”) in the measured and indicated categories – with 98% in the measured category. In 2009, as part of the renewal of the Company’s prospecting licences as required under the Botswana Mines and Minerals Act, approximately 50% of the original licence area was relinquished.  The area relinquished was generally not considered to have commercially exploitable coal and as a result, the reduction in the mineral resource estimate from the Sixth Technical Report of September 2008 was small, at approximately 10%.   

An approximate 36 million tonnes (“Mt”) is further reported in the inferred category (see Table 1 and Figure 2).

Table 1 – Mmamabula Global In Situ Mineral Resource Estimate (D1 + M2 Seams: Mmamabula East incorporating the Western, Central and Eastern Blocks and Mmamabula South)
(effective date: December 2009)


Category

Tonnage
(Mt)

Measured

2,559.01

Indicated

59.3

Measured + Indicated (total)

2,618.31

Inferred

37.7

Figure 2: Mmamabula Global In Situ Mineral Resource Estimate: 2.63 Bt (measured and indicated) and 35 Mt (inferred) at Mmamabula East and Mmamabula South.

Four coal-bearing areas have been defined on Mmamabula: the Western, Central and Eastern Blocks (from west to east) at Mmamabula East, as well as a single block at Mmamabula South, herein referred to as “South Block” (See Figure 2). Drill hole spacings for the South, Western, Central and Eastern Blocks are typically set at 500 metres (“m”) by 500 m or less.

Of the 2.6 billion tonnes of in situ coal at the Mmamabula Coal Field, work done by CIC Energy’s mining team indicates that the resource can potentially deliver an extractable tonnage of 1.9 billion tonnes (run of mine).  This estimate is based on applying open cast mining methods over 30% of the area and bord and pillar with pillar extraction mining methods for the remainder of the resource. 

Based on the analysis that has been performed, CIC Energy anticipates that the 1.9 billion tonnes of run of mine production, after beneficiation, could yield the following coal products: 757 Mt of thermal coal suitable for power generation, 432 Mt of high quality export coal, and 182 Mt of coal suitable for CIC Energy’s Coal-to-Hydrocarbons Project. This product mix is based on the different coal qualities suited for these three potential markets. The estimated qualities of these coal products are included in Figure 3 below.

Figure 3: Planned Coal Products from the Mmamabula Coal Field1

1The qualities and quantities of the coal products are estimates based upon the following: interpretation of geologic data obtained from drill holes and other sampling techniques, feasibility studies that derive estimates of cash operating costs based upon anticipated tonnage and grades of coal to be mined and processed, ground conditions, the configuration of the coal seams, expected recovery rates of coal from the seams, estimated sales revenues and operating costs from coal beneficiation activities, anticipated climatic conditions and other factors. No assurances can be given that the indicated qualities or quantities of coal will be produced.  In particular, any change to the quality requirements or change to the mining methods as a result of production cost inputs would impact the coal product quantities.

Based on quality and thickness, two coal seams have been identified as the principal economic targets at CIC Energy’s Mmamabula Coal Field; these are the D1 and M2 seams. On the main Mmamabula East licence, the two seams are relatively flat lying and in the areas of economic interest occur at depths of less than 140 m below surface. The D1 and M2 seams have average mineable thickness of approximately five and three metres, respectively.

Coal qualities across the Mmamabula East licence area are mostly suitable for thermal power generation with raw coal calorific values (“CV”) of approximately 20.3 megajoules per kilogram (“MJ/kg”) for the D1 seam and 22.6 MJ/kg for the M2 seam. Work to date by CIC Energy on the M2 seam indicates that coal qualities generally increase from west to east, with the potential for higher-quality export coal in the M2 seam of the Western and Eastern Blocks. South Block is suitable for thermal power generation.

Based on current mining cost parameters, approximately 30% of the Mmamabula coal resource could be extracted economically by open cut mining methods and underground bord and pillar mining methods using conventional continuous miners is being planned for the remaining 70%. Alternative mining methods (such as underground long wall extraction) that could further optimize resource utilization are also being investigated.

Washability tests have shown that for a large portion of the resource, it is possible to beneficiate the raw coal to produce high quality export coal, as well as a lower quality coal suitable for on-site power generation and/or gasification. The relatively high sulphur contents, which vary from 1.5% to 4% in the raw coal, could easily be reduced to less than 1%.

The following structural characteristics have been noted in the three Mmamabula East resource areas modelled during the course of the latest resource estimation process; please note that the Mmamabula South Block has not been remodelled.

Western Block:

The D1 seam mineral resource varies in thickness from 1.00 m to 9.05 m, with an average thickness of 5.66 m and occurs at depths from surface of between 28 m to 121 m, with an average depth to roof of 60 m. The seam dips shallowly at 0.5o to 1.4o, predominantly to the west. The M2 seam mineral resource, which occurs approximately 20 m stratigraphically below the D1 seam, varies in thickness from 1.50 m to 6.50 m, with an average thickness of 3.33 m and occurs at depths from surface of between 25 m to 133 m, with an average depth to roof of 77 m. The M2 seam has a comparable dip to the D1 seam. Weathering to an average depth of 30 m has affected the D1 and M2 seams in places. Only coal seams where the seam roof is below the weathered horizon are reported in the current mineral resource estimate. No discount has been made for interpreted geological loss due to interpreted continuity of the ore body.

Central Block:

The D1 seam mineral resource varies in thickness from 1.8 m to 8.10 m, with an average thickness of 4.37 m and occurs at depths from surface of between 16 m to 77 m, with an average depth to roof of 36 m. The seam dips shallowly at 0.5o to 1.4o, predominantly eastwards. The M2 seam mineral resource, which occurs approximately 20 m stratigraphically below the D1 seam, varies in thickness from 2.0 m to 6.54 m, with an average thickness of 3.61 m and occurs at depths from surface of between 24 m to 103 m, with an average depth to roof of 55 m. The M2 seam has a comparable dip to the D1 seam. Weathering to an average depth of 30 m has affected the D1 and M2 seams in places. Only coal seams where the seam roof is below the weathered horizon are reported in the current mineral resource estimate. A discount of 4% has been applied to the resource to account for faulting along the southern edge of the resource.

Eastern Block:

The D1 seam mineral resource varies in thickness from 1.50 m to 9.30 m, with an average thickness of 2.79 m and occurs at depths from surface of between 21 m to 110 m, with an average depth to roof of 72 m. The seam dips shallowly at 0.5o to 4.0o to the east in the western portion of the block and at 0.5o to 1.4o to the southeast or northwest, on either side of a northeast-trending palaeohigh further eastwards. The M2 seam mineral resource, which occurs approximately 20 m stratigraphically below the D1 seam, varies in thickness from 1.5 m to 6.32 m, with an average thickness of 3.24 m and occurs at depths from surface of between 13 m to 143 m, with an average depth to roof of 90 m. The M2 seam has a comparable dip to the D1 seam. Weathering to an average depth of 30 m has affected the D1 and M2 seams in places. Only coal seams where the seam roof is below the weathered horizon are reported in the current mineral resource estimate. A discount of 3% has also been applied to the resource to account for faulting along the southern edge of the resource.

Mmamabula South:

The D1 seam mineral resource varies in thickness from 1.6 m to 11.8 m, with an average thickness of 6.0 m and occurs at depths from surface of between 29 m to 144 m, with an average depth to roof of 89 m. The seam dips at 0° to 5°, predominantly to the southwest and northwest. The M2 seam mineral resource, which occurs approximately 20 m stratigraphically below the D1 seam, varies in thickness from 1.5 m to 4.3 m, with an average thickness of 3.2 m and occurs at depths from surface of between 33 m to 169 m, with an average depth to roof of 106 m. The M2 seam has a comparable dip to the D1 seam. Weathering to an average depth of 30 m has affected the D1 and M2 seams in places. Only coal seams where the seam roof is below the weathered horizon are reported in the current mineral resource estimate. A discount of 20% has been applied to the resource to account for faulting which has split the resource area into 11 separate faulted blocks. Interpretive vertical throws of around 50 m separate the faulted blocks.

 Table 2 – Mineral Resource Estimate, Western Block (Mmamabula East)
(effective date: August 14, 2009)
Due to rounding errors summation of measured and indicated resources may not total exactly

D1 + M2 Seams Mineral Resource Estimate1


Category

Tonnage
(Mt)

Measured

585.42

Indicated

0

Measured + Indicated 
(total)

585.42

Inferred

0

D1 and M2 Seam Mineral Resource Estimate1

 

D1

M2

Category

Area
(ha)

Average Thickness
(m)

Tonnage
(Mt)

Area
(ha)

Average Thickness
(m)

Tonnage
(Mt)

Measured

4,090.19

5.56

340.66

4,954.45

3.35

244.76

Indicated

0

-

0

0

-

0

Measured + Indicated  (total/average)

4,090.19

5.56

340.66

4,954.45

3.35

244.76

Inferred

0

-

0

0

-

0

1 includes a 0% discount for interpreted geological loss due to faulting

Table 3 – Mineral Resource Estimate, Central Block (Mmamabula East)
(effective date: August 14, 2009)
Due to rounding errors summation of measured and indicated resources may not total exactly

D1 + M2 Seams Mineral Resource Estimate2


Category

Tonnage
(Mt)

Measured

360.86

Indicated

0

Measured + Indicated 
(total)

360.86

Inferred

0

D1 and M2 Seam Mineral Resource Estimate2

 

D1

M2

Category

Area
(ha)

Average Thickness
(m)

Tonnage
(Mt)

Area
(ha)

Average Thickness
(m)

Tonnage
(Mt)

Measured

3,267.3

4.47

226.36

3,267.3

3.49

134.50

Indicated

0

-

0

0

-

0

Measured + Indicated  (total/average)

3,267.30

4.47

226.36

3,267.30

3.49

134.50

Inferred

0

-

0

0

-

0

2 includes a 4% discount for interpreted geological loss due to faulting

Table 4 – Mineral Resource Estimate, Eastern Block (Mmamabula East)
(effective date: August 14, 2009)
Due to rounding errors summation of measured and indicated resources may not total exactly

D1 + M2 Seams Mineral Resource Estimate3


Category

Tonnage
(Mt)

Measured

1,336.43

Indicated

24.60

Measured + Indicated 
(total)

1,361.03

Inferred

34.00

D1 and M2 Seam Mineral Resource Estimate3

 

D1

M2

Category

Area
(ha)

Average Thickness
(m)

Tonnage
(Mt)

Area
(ha)

Average Thickness
(m)

Tonnage
(Mt)

Measured

11,193.68

3.29

561.63

16.273.1

3.25

774.80

Indicated

219.26

4.03

13.30

219.26

3.61

11.30

Measured + Indicated  (total/average)

11,412.94

3.31

574.93

16,492.36

3.26

786.10

Inferred

347

3.27

17.00

347.6

3.52

17.00

3 includes a 3.5 - 5% discount for interpreted geological loss due to faulting

Table 5 – Mineral Resource Estimate, Southern Block (Mmamabula South)
(effective date: August 14, 2009)
Due to rounding errors summation of measured and indicated resources may not total exactly

D1 + M2 Seams Mineral Resource Estimate4


Category

Tonnage
(Mt)

Measured

276.3

Indicated

34.7

Measured + Indicated 
(total)

311.0

Inferred

3.7

D1 and M2 Seam Mineral Resource Estimate4

 

D1

M2

Category

Area
(ha)

Average Thickness
(m)

Tonnage
(Mt)

Area
(ha)

Average Thickness
(m)

Tonnage
(Mt)

Measured

2,482.5

6.01

183.2

2,392.8

3.19

93.1

Indicated

308.0

5.92

22.6

322.8

3.10

12.1

Measured + Indicated  (total/average)

2,790.5

6.00

205.8

2,715.6

3.18

105.2

Inferred

46.0

5.98

3.4

7.8

3.60

0.3

4 includes a 20% discount for interpreted geological loss due to faulting

Qualified Person, Quality Assurance/Quality Control and Methodology

The “Qualified Person”, as such term is defined by Canadian Securities Administrators (CSA) National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”) who prepared the mineral resource estimates and other technical information presented on this page, is Ms. Lesley Jeffrey.  Ms. Jeffrey is an employee of CIC Energy, and is a member of the South African Council for Natural Scientific Professions and is deemed a “Competent Person” under the South African SAMREC Code. 

CIC Energy filed a NI 43-101 compliant Sixth Technical report, on SEDAR (www.sedar.com) on September 29, 2008.  The report is entitled “CIC Energy Corp.: Mmamabula Energy Complex, Southeastern Botswana, Project No. J912, National Instrument 43-101 Sixth Technical Report.”

For the Sixth Technical Report, Mr. Grant van Heerden, Pr.Sci.Nat., of SRK Consulting (South Africa) (Pty) Limited (“SRK”) has reviewed, in principal, the processes and procedures used at the Mmamabula site in Botswana to generate geological information (drilling, logging and sampling) for input into the geological models.  SRK have also discussed with Ms. Jeffrey the methodology for coal resource estimation based on the geological models.  SRK concur with the procedures and methodologies used by the Company for geological model construction (physical models and coal quality models) as well as with the definition of coal resource blocks.  Mr. van Heerden is a member of the South African Council for Natural Scientific Professions and is deemed a “Competent Person” under the South African SAMREC Code.

As discussed above, on August 14, 2009 CIC Energy issued a news release updating the mineral resource estimates in the Sixth Technical Report to account for the relinquishment of some of the original licence area, as part of the required process to renew the prospecting licences.

Coal analyses were conducted by Witlab (Pty) Limited (“Witlab”) in Witbank, South Africa and M & L Inspectorate (Pty) Limited (“M & L”) in Middelburg, South Africa. Witlab and M & L are independent of CIC Energy and specialize in the sampling and analysis of coal. M & L has accreditation through the South African National Accreditation System (Facility Accreditation Number: T0313) and Witlab is in the process of obtaining such accreditation.

For information with respect to geology, analytical methodology, Quality Assurance/Quality Control, and resource estimate methodology, geological model and resource cut-offs see the Company’s Sixth Technical Report. Note that whereas the current resource estimate for the Western Block uses no geological losses, the current resource estimates for the Central Block, Eastern Block and Mmamabula South use, respectively, 4%, 3% and 20% interpreted geological loss to account for more pronounced faulting within these areas.

 

- October 2010 -