Level 2, 41-47 Colin Street, West Perth WA Australia 6005PO Box...

Level 2, 41-47 Colin Street, West Perth WA Australia 6005
PO Box 636 West Perth WA Australia 6872
Tel 61 8 9322 2033
61 8 9322 2055
Fax 61 8 9322 2100
www.atomicresources.com.au
[email protected]
20 September 2010 10-56
ASX Code: ATQ
Company Announcement Officer
Australian Securities Exchange
MBALAWALA FEASIBILITY STUDY, INITIAL RESERVE, INCREASED RESOURCE
AND NGAKA EXPLORATION UPDATE
HIGHLIGHTS
 Positive Bankable Feasibility Study completed;
 Mbalawala Mineable Reserve of 40 million tonnes;
 Mbalawala resource increases 18% to 251 million tonnes;
 160-320 million tonne Exploration Target1 defined at Mbuyura/Mkapa;
 Surface drilling programme planned to expand resource base.
Atomic Resources Limited (?Atomic?) is pleased to announce completion of a Bankable Feasibility Study
for a proposed open pit mine at Mbalawala, with an initial reserve of 40 million tonnes. The Study
incorporates a significant 18% increase in the combined coal resource for the Mbalawala Block, from
212 to 251 million tonnes. The Mbalawala Block covers an area of approximately 154.8km2 and is
located within the Ngaka Coalfield in the south-western region of Tanzania.
In addition to this, Atomic has identified an Exploration Target1 range of between 160 and 320 million
tonnes for the relatively under-explored northern sub-basins of the Ngaka Coalfield, i.e. the
Mbuyura/Mkapa Blocks.
An exploration campaign of more than 50 surface boreholes will commence this year with the drilling
programme extending well into 2011. Additional concessions over the coalfields of Liweta, Mbamba Bay
and Mhukuru remain largely untested and may represent considerable upside coal potential.
Release of Bankable Feasibility Study Including Maiden Reserve
Wave Engineering Solutions has released a Bankable Feasibility Study in September 2010 considering
the commercialisation of a thermal coal resource. This study confirms the economic viability of Atomic?s
coal reserves at Mbalawala Block, Ngaka Coalfield. The reserve estimate used in this study was
prepared by Coffey Mining Australia in accordance with the JORC Code (2004).
The following input parameters were considered:
 Conventional open cast mining
 40 Mt JORC Code compliant Proved Reserve (based on Run-of-Mine cost of US$32/t)
 Local market to supply 450MW power plant
 Capital cost of US$205M
 Tanzanian Strategic Investor Status and Special Mining License
The above results in a 25 year of Life of Mine at a production rate of 1.5Mt per annum with a hurdle rate
of 25% . This is without the additional exploration that will be performed over the next few years.
The study indicates that there is high potential to increase the Proven Reserve component of the
Measured Resource, in both open cut and underground mining areas, by continued mine development
planning. A review of the modeled coal outside of the ultimate pit design has defined a potential
underground mining inventory of 40Mt tones of coal.
Atomic?s joint venture partner in Tanzania, the National Development Corporation (?NDC?) have
indictated their satisfaction with the BFS at this stage.
Mbalawala Resource Update
The coal resources of the Mbalawala Block are located within the southern portion of the Ngaka
Coalfield. This area was the focus of intense geological and resource studies by the Colonial
Development Corporation (?CDC?) in the early 1950?s. Investigations for economic quantities of thermal
coal were also conducted by geologists from the Tanzanian Geological Survey (?TGS?), NDC and most
recently Atomic?s local operating arm, Tancoal Energy Limited (?Tancoal?).
The assessment of the Coal Resources (Table 1) has been prepared by Ravensgate geological
consultants in accordance with the Australian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves (JORC Code, 2004). The wireframes and block models used in the
calculation of the resource estimates were also generated by Ravensgate using MED System Mine
evaluation software.
The resource estimate is based upon all data made available to the NDC and TGS, which includes 27
boreholes completed by the CDC in 1955. Data from two modern diamond drilling campaigns
implemented by Tancoal are also included. The initial Tancoal 2008 diamond drilling program of 19 holes
verified and validated the CDC?s historical geological and analytical data. Ten additional follow up and
infill holes were completed by Tancoal during 2009/2010.
Table 1. Mbalawala Coal Resources, Ngaka Coalfield.
Resource Category Measured Indicated Inferred Totals
Tonnes (million) 139 66 46 251
Inherent Moisture % 2.9 2.77 2.62 2.8
Ash % 18.9 19.03 23.81 19.9
Fixed Carbon % 52.0 51.41 46.26 50.8
Volatile Matter % 26.3 26.87 27.32 26.6
Calorific Value kcal/kg 6,326 6,350 5,937 6,257
Total Sulphur % 1.4 1.27 0.78 1.3
Specific Gravity 1.5 1.49 1.55 1.5
Notes:
1) Coal Resources have been rounded to appropriate levels of accuracy in accordance with the JORC Code (2004)
2) The estimates of Coal Resources in this table have been carried out by Ravensgate geological consultants in accordance with the
JORC Code (2004)
3) Coal resources are reported inclusive of coal reserves (i.e. coal reserves are not additional to coal resources)
4) Coal quality data reported is based on weighted averages for all seams
5) The Inherent Moisture is reported on an ?as received? basis; all other analysis are reported on an ?air dried basis?.
6) A relative bulk density of 1.4 tonnes / cubic meter ?in-situ was applied to tonnage calculation based on the default derived from
analysis, and the bulk density was also modeled.
Mbuyura/Mkapa Exploration Target1
The Mbuyura/Mkapa Blocks were subject to considerable historic exploration activities also performed by
CDC during the late 1940?s and early 1950?s. 13 holes were drilled, accompanied by detailed mapping,
trenching, pitting and auger drilling. Tancoal drilled a further 27 holes across the area in 2009, including
the previously under-explored northern portion of the Ngaka Coalfield.
Review and re-analysis of historical and recent Tancoal drilling data has resulted in an Exploration
Target1 range of 160 to 320 million tonnes to a depth of 500 meters. Lower and upper ranges (Table 2)
take cognisance of reasonable assumptions with regard to seam variability, continuity and thickness.
Table 2: Exploration Target1 ranges.
Seam Surface to 50m depth (Mt) 50m to 500m depth (Mt) > 500m depth (Mt)
Seam 4 (a, b, c) 8 - 17 35 - 70 5 - 10
Seam 3 (a, b) 12 - 23 105 - 210 65 - 130
Total 20 - 40 140 - 280 70 - 140
Exploration Update
Interpretation of all data, including recent analytical results, is ongoing and a geological model of the
Mbuyura/Mkapa Blocks is currently being developed by Tancoal and Shango Solutions, independent
geological consultants to Atomic. Work to date indicates reasonable seam correlation and continuity
across these blocks.
The geological models being developed will also increase confidence in the exploration strategy for the
Ngaka Coalfield. This will include identification of areas where additional exploration data, in particular
seam continuity and characteristics, including coal quality information. This will improve confidence
levels in the geological understanding of the Coalfield and associated resources.
As announced by Atomic on the 29th April 2010, Tancoal has acquired an additional concession,
PL6285/2009, that contains the southerly extent of the Mbuyura/Mkapa Blocks. Coal seams could
continue for at least 1.5km into this Nyakangunda concession and therefore additional upside coal
potential exists. No exploration activities have yet been carried out on this new concession.
A new exploration campaign is planned in the Ngaka Coalfield for late 2010 to early 2011. Some 52
diamond drillholes are planned to approximate depths of 40 to 600m below surface. This programme
focuses on expanding the existing Mbalawala resources in the down-dip and strike directions, as well as
increasing confidence in the Mbuyura/Mkapa Blocks and Nyakangunda sufficient to establish maiden
JORC compliant resources.
In addition to the Ngaka Coalfield, Atomic holds prospecting rights over the coalfields of Liweta, Mbamba
Bay and Muhukuru that have known coal occurrences indicating good prospectivity for thermal coal.
However, these areas remain largely untested and may represent considerable upside coal potential for
Atomic. Exploration is planned over these areas to confirm the historic work and fully assess the
potential to establish JORC compliant resources.
ENDS
1 The potential quantity of coal presented is conceptual in nature and there is insufficient exploration data currently available to define a Mineral
Resource in this area under the JORC (2004) Code. The nature of an Exploration Target is such that it is uncertain if further exploration will
result in the determination of a Mineral Resource.
Competent Person?s Statement
The Coal Reserves quoted in this announcement are based on the Mbalawala Coal Mine Bankable
Feasibility Study as at 13 August 2010, compiled by Mr Robert Gracey, who is a Member of the
Australian Institute of Mining and Metallurgy (AusIMM) and an employee of Coffey Mining, independent
consultants to Atomic Resources Limited. Mr Gracey has sufficient experience as to qualify as a
Competent Person as defined in the 2004 edition of the ?Australian Code for Reporting of Mineral
Resources and Ore Reserves?. Mr Gracey consents to the inclusion in the report of the matters based on
his information in the form and context in which it appears.
The Coal Resources quoted in this announcement are based on the Resource Model Assessment and
Review, Ngaka Project Area as at 20 July 2010, compiled by Mr Edward Radley, B.Sc. Geology, who is
a Member of the Australian Institute of Mining and Metallurgy (AusIMM) and a Senior Resource
Consultant for Ravensgate, independent geological consultants to Atomic Resources Limited. Mr Radley
is a registered professional geologist with sufficient experience as to qualify as a Competent Person as
defined in the 2004 edition of the ?Australian Code for Reporting of Mineral Resources and Ore
Reserves?. Mr Radley consents to the inclusion in the report of the matters based on his information in
the form and context in which it appears.
The information in this announcement as relates to the Bankable Feasibility Study are based on the
Mbalawala Mine Bankable Feasibility Study with related infrastructure feasibility options as at 31 August
2010, verified by Mr John Kelly, B.Eng (Mining), who is a Member of the Australian Institute of Mining
and Metallurgy (AusIMM) and Director of Kelly Consulting, for Wave Engineering Solutions, independent
engineering consultants to Atomic Resources Limited. Mr Kelly consents to the inclusion in the report of
the matters based on his information in the form and context in which it appears.
The information in this report that relates to mineral resources is based on information compiled by Mr
G?khan G?ler, who is a member of a Recognised Overseas Professional Organisation (ROPO) included
in a list promulgated by the ASX from time to time (The South African Institute of Mining and Metallurgy).
Mr Guler is employed by Shango Solutions geological consultancy and is also a director of the company.
Mr Guler has over 15 years experience which is relevant to the style of mineralisation and type of deposit
under consideration and to the activity which he is undertaking to qualify as a Competent Person as
defined in the 2004 edition of the ?Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves?. Mr G?ler consents to the inclusion in the report of the matters based on
his information in the form and context in which it appears.
ENDS
About the company:
Atomic Resources Limited is an Australian-based exploration and resource development company with major
thermal coal assets in Tanzania. Our operating arm in Tanzania is Tancoal Energy Limited, which was formed by a
Joint Venture between Atomic Resources Limited and the National Development Corporation of Tanzania (NDC).
Forward-Looking Statements
Certain statements made during or in connection with this statement, including, without limitation, those concerning
exploration targets, contain or comprise certain forward-looking statements regarding Atomic?s exploration
operations, economic performance and financial condition. Although Atomic believes that the expectations reflected
in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to
have been correct.
Accordingly, results could differ materially from those set out in the forward-looking statements as a result of,
among other factors, changes in economic and market conditions, success of business and operating initiatives,
changes in the regulatory environment and other government actions, fluctuations in metals prices and exchange
rates and business and operational risk management. Atomic undertakes no obligation to update publicly or
release any revisions to these forward-looking statements to reflect events or circumstances after today's date or to
reflect the occurrence of unanticipated events other than required by the Corporations Act and ASX Listing Rules.
For further information contact:
Shareholder Enquiries
Clinton Cain
Managing Director
Atomic Resources Limited
Tel: (08) 9322 2033
www.atomicresources.com.au
Media Enquiries
Tony Dawe
Dawe Media Group
Tel: 041 3322 110
[email protected]