Hodges Resources Limited says it is advancing off take negotiations with potential clients for its Morupule South coal project in Botswana.

The Morupule South Coal Project is located to the south of the operational Morupule Colliery in central east of the country. The project consists of one prospecting licence (PL121/2010), covering a total area of 264.4km2 within the eastern central district of Botswana.

The company says additional conceptual level studies are being undertaken on the power (electrical power generation) integration development and design.

“This will take Hodges one step closer to the decision to develop the coal mine,” says the company in a quarterly report for quarter ended 30 september 2012.

“The company has commenced both these studies and hopes to have them completed by the end of the calendar year.”

Hodges is also working to achieve the goal of moving some of the Morupule South JORC compliant indicated resource into the measured category. This report is expected early November 2012.

“Hodges intends to steadily continue to advance the Morupule South project to meet the demands of the markets and strategic groups through developments via power station fuel and export progress alternatives,”

At its Moiyabana project, the company reveals it has completed 68 holes in the Moiyabana Coal Project area. The key intention of the planned drilling was to classify the Resource in the area drilled from Inferred to Indicated category.

A total of 97 drill holes including recent and correlated historical holes were incorporated within the Geological model for resource estimation. Included within this were 40 Open holes and 57 HQ cored holes.

The Moiyabana project (PL93/2007 and PL94/2007) is located approximately 70km from the operational Morupule mine and Colliery.

At the end of the 2012 September quarter, Hodges had cash reserves of approximately $738,000. The company has also requested the repayment of the refundable first option fee ($US3 million) due from parties under the terms and conditions contained in the Moiyabana Project Heads of Agreement.

“Hodges has continued to progress discussions with various strategic entities from the energy markets and hopes to secure the next phase of project funding in the near future.”

During the quarter, Hodges participated and presented in two major mining conferences – Africa Down Under in Perth and the Resources Round-up in Melbourne. Both presentations highlighted the work undertaken by the company and its strategy going forward.