jorc code and what fridays announcement means

Hi all,

Thought I’d give you all a new thread concerning Fridays great announcement about the coal reserves at Waterberg 1. As it seems to me that majority of posters have little or no idea how the JORC Code works so I’ll try and explain it as simply as I can for you.

So before Friday RES had an INFERRED resource of 2bill tonnes which based on the result they estimated would only yield 1 bill tonnes! a great start.

From INFERRED we move to INDICATED resource which means more drilling has been done at closer intervals across the resource its at this point companies can form a realistic estimate of average coal thickness, areal extent, depth range, quality and in situ quantity. Which then gives the company enough confidence to generate mining plans etc...

Then even more concentrated drilling takes it to MEASURED resource, whereby a company can generate a reliable estimate of average coal thickness, areal extent, depth range, quality and in situ quantity. This provides a greater level of confidence in the deposit sufficient to justify generate detailed mine plans, determine mining costs and provide specifications for a marketable product.

From a Resource we move on to Probable, Proven and Recoverable/saleable RESERVES!! Coal Reserves can only be derived from indicated and measured resources contained within mining plans.

So what we can see from the announcement is we now have 302,3857,324 of SALEABLE COAL, so essentially PJ has now taken WB1 right through all the stages of the JORC code substantially reducing the uncertainty and risk surrounding the project. I would also like to note that to get to this stage PJ and SM needed to develop a mining plan to gain the JORC classification.

IMHO This announcement shows us that RES has ticked the major boxes in a BFS
1. Coal reserves
2. A plan for digging it up
3. who are we going to sell it too?
With these things in place it’s only a matter of time before we have a BFS, we all know its coming.

So this announcement isn’t a huge increase the size of the resource but it’s a MASSIVE increase in the value of the resource and a huge decrease in the risk surrounding the eventual financing of the project.

IMHO this is possibly some of the best news we have had to date. Everyone gets so caught up on increases in the size of the resource when RES already has a huge resource, what we need to focus on now is how much of it RES can dig up (which is what PJ & SM have delivered) and who we are going to sell it too (the next hurdle).

if anyone would like to read through the JORC code to get a better understanding check out the link below

http://www.jorc.org/pdf/coalguidelines2001.pdf

PD

I'm not a GEO so if there are any of you out there I would love to hear your thought.