Hodges Resources Ltd says it has completed the earn in commitment with SDNP Manufacture Mining and Construction Services (Pty) Ltd (SDNP), on the Morupule South Coal Project and secured 75% of the project located in Botswana.
Under the terms of the agreement, Hodges has earned 75% of the project by paying SDNP US$500,000 on execution of the agreement and spending US$3,000,000 over two years on the project. The companies will now incorporate a special propriety company in Botswana that will hold the permit (formation of the JVCo). Hodges can then exercise its option to acquire an additional 24% in the JVCo once this is complete.
Hodges recently concluded a 2,500m drilling program over the shallow coal area within the eastern block. The drill program completed the outstanding expenditure commitment for the joint venture. Hodges Managing Director Mark Major said that the company was extremely happy with reaching this milestone as well as the projects progress and exploration thus far.
“It is clear we have a sizeable asset with low cost operational and capital development opportunities in a developing region. The area is becoming more active with the Government of Botswana tendering the refurbishment of the Morupule A powers station (132MW) and announcing a Request for Prequalification from independent power producers for a 300MW power development next to the nearly completed Morupule B power station (600MW), all of which will be less than 8km from our proposed mine,” Major said.
Mark added that developments in the rail haulage were also a foot with Transnet Freight Rail (South African freight rail company) revealing that it plans to open the rail link for the Waterberg area into Botswana by 2020, during the Coaltrans – Southern Africa coal conference this week.
“It is also known that recently, our neighbours the Morupule Coal Mine reached an agreement with Botswana railways and Transnet to commence carrying there coal to the Durban port in South Africa to supply international markets,” Major commented.
Hodges intends to move the Morupule South project forward in line with the regional development and is currently working towards feasibility level studies. The Morupule South Coal Prospect is located within the eastern central district of Botswana, adjacent to the operational Morupule Mine and Colliery; the only operational coal fired power plant in Botswana.
Hodges has drilled 107 holes for 12,073 meters and defined a 2.45Bt JORC resource of which, 110Mt is Measured, 173Mt is Indicated and 2,167Mt is Inferred. Hodges has also undertaken scoping level mining and power integration studies which confirms the technical and financial viability of the Morupule South Project (refer to Hodges ASX press release 11 February 2013).
Recent Development in Botswana and Rail haulage
The Botswana government recently closed a tender for the refurbishment of Moruplue A (132MW) coal fired power station located within the Morupule area of Botswana. In addition to the government notified the public on the 12th April, that it was going to request expressions of interest to tender for the development of the “brownfield” 300MW coal fired power station from independent power providers (IPP) by 2017.
Expressions of interest for prequalification on the IPP need to be submitted by mid-June. The power station is to be built next to the newly developed Morupule B (600MW) power station. The additional of this IPP development will provide over 1,000MW of power output within 8km of the Morupule South proposed open cast mine.
An additional “greenfield” 300MW coal fired power station from an IPP, is expected to be also tendered within a few months. This development is earmarked for completion by 2019 and can be developed anywhere within Botswana. The neighbouring Morupule Underground Coal Mine (100% owned By Debswana), entered into a strategic partnership with the Botswana Railways and Transnet to start carrying coal to the international markets, via the Durban port in South Africa. This haulage has commenced.
A strategic meeting is being organised for May 2013 where presentations and round table discussions on ways to achieve a fundable and affordable coal railway transport system for Botswana coal into the global markets via a South Africa corridor. All the major stakeholders and government groups have been invited to attend.
On the 8 May, 2013 it was publically confirmed during an address at the Coaltrans Southern Africa coal conference, by the CEO of Transnet Freight Rail, Siyabonga Gama that, Transnet will be looking to link the Waterberg coalfields area into Botswana by 2020. (Hodges Resources)
