Here is a story about an intrepid mining explorer that should grab your interest even though it looks a touch speculative.
But that is what mining exploring is all about and Paul Jury, the managing director of RESOURCE GENERATION (RES) has done it all over the past 20 years and mostly came out in front.
Ferret is always excited by good performers that continually "bring home the bacon" to coin a phrase.
Mr Jury has been involved in coal four companies that were sold off to the majors and that is no mean feat.
BHP Billiton, Glencore, Xstrata and Rio Tinto all acquired coal mines from Mr Jury.
His latest objective is more spectacular in creating a $552 million thermal coal mine in South Africa.
It is the Boikdarabelo deposit which contains a massive resource of 6.4 billion tonnes.
The deposit has a mineable reserve of 745 million tonnes in the Waterberg coal basin in South Africa and close to the Botswana border.
Resource Generation has now expanded the detailed mine plan at its proposed Boikdarabelo mine, following additional drilling undertaken earlier this year on the Kalkpan tenement.
The completion of the expanded mine plan has enabled the reserves to be upgraded.
Boikdarabelo now has probable reserves of 744.8 million tonnes, an increase of 108.8 million tonnes.
The area covered by this reserve amounts to only 35% of the resource-bearing tenements.
"These results are further confirmation of the potential of our Boikdarabelo mine to supply large quantities of thermal coal to both the export and domestic thermal coal markets, over several decades," Mr Jury said.
"Together with our 20-year contracts to supply coal to India's CESC power utility and Bhushan Steel Ltd, this reserve upgrade assists in underwriting revenues for our project finance raising to complete the development."
Coal qualities are consistent and are the same as those disclosed to the ASX in January 2010.
SHARE PRICE MOVEMENTS
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Shares of Resource Generation edged up 3c to 54.5c on Friday. Rolling high for the year is 75c and low 35c. The company has 243.9 million shares on issue with a market cap of $132.9 million.
Last November, Resource Generation announced it was undertaking an equity raising to raise up to $20 million at 50c per share, and may accept additional subscriptions of up to an additional $10 million.
Citigroup Global Markets Australia Pty Ltd is acting as sole lead manager and bookrunner to the placement and is placing shares with institutional and sophisticated investors.
The placement will be issued in two tranches, with an initial unconditional tranche of 27.4 million shares already issued on November 10, and the balance of placement shares to be issued conditional on the receipt of shareholder approval.
Resource Generation has previously announced that it is bringing forward the construction of a rail link from the Boikdarabelo mine to the existing rail network.
The company's shares have been active over the last month or two with investment bank Credit Suisse becoming a major shareholder after acquiring a 5.85 per cent stake on December 16.
Commonwealth Bank's shareholding is down to 6.22 per cent from 7.2 per cent with a steady 15.16 million after the issue.
Of the 20 top shareholders, Integrated Coal Mining leads the pack with 72.4 per cent.
Acquisition of the Tasmanian tenements occurred in October 2008.
The areas had undergone varying degrees of historical exploration and work has focused on the Woodbury and Jericho tenements to identify and retrieve what information remained from that previous work.
The bulk of the useful information related to the Woodbury deposit and this has been reloaded into a geological model to assist in evaluating the potential for the area.
Information relating to the Jericho area was also loaded and together with Woodbury an exploration program has been established for both areas.
Land access was finalised in mid 2010 and a new exploration drill program has commenced.
The Cameroon project has a background of historical information that indicate that the tenements may be prospective for sandstone-style uranium deposits.
Historically the data shows that the areas comprise radiometric geophysical anomalies, and geochemical uranium anomalism in either soil samples, stream sediment samples or rock chip samples.
Tenders for aeromagnetic surveys are being considered however given the difficult regional location a number of factors surrounding access have to be considered if the work was to proceed.
It is envisaged that these surveys or failing them some further regional work may be undertaken to assist in evaluating future potential.
BACKGROUND
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Resource Generation has a geographically diverse portfolio of high-grade resource deposits with a defined program of work in place to develop these into operating mines.
The company was listed on the ASX on October 31, 2003
Its strategy is to develop high-grade energy-related resources into viable and competitive mining operations.
Accelerated shareholder value will be delivered through the delivery of physical mining activity.
The portfolio of resources already accumulated includes low overburden, inexpensive to mine coal deposits in South Africa and Australia as well as potentially very low-cost uranium deposits in Cameroon.
Exploration programs are underway and, in addition in the case of South Africa, mine approval processes that can lead to the commencement of cash flow positive mining operations in as short a time frame as possible.
Article can be found here: http://news-feed.thekhaya.com/article/d0fcd158-3b09-4380-a10a-07636c7419d0.html
RES Price at posting:
58.0¢ Sentiment: Hold Disclosure: Held
