JOHANNESBURG (miningweekly.com) – JSE- and AIM-listed minerals, mining and processing company Petmin would focus on three core assets, namely the Somkhele, SamQuarz and Veremo operations, after disposing of its Springlake colliery for R145-million.
The company said in a statement to shareholders on Friday that it had sold the colliery to Shanduka Coal in a bid to “free up management time” and provide additional cash resources to be used for accelerating the expansion at the Somkhele colliery.
The cash resources could also be used to fund future acquisitions, the company noted.
Meanwhile, Petmin said the construction of a destoning plant at the Somkhele colliery had begun.
The plant was expected to be in production by the last quarter of Petmin’s 2009 financial year, at which point it would increase production by 10%. This would increase by a further 25% as the plant is commissioned.
Petmin added that its exploration programme at the colliery was ongoing and expected an updated reserve and resource statement to be completed by the end of December this year.
The company said it expected the probable reserves for the colliery to increase significantly.
Demand for metallurgical coal in the medium-term was expected to remain firm, with the colliery also having experienced an overall increase in the price of its product, the company said.
It had, thus, started investigating additional projects to double the colliery’s coal-processing capacity, with the construction of a second coal-processing plant under consideration. An investment decision would depend on the results of an exploration programme.
Petmin also announced that it had acquired an additional 30% interest in Petmin Logistics, which it now wholly-owned, owing to the continued growth of the colliery’s export business.
The logistics company had contracted a 600 000 t/y export capacity at the Richards Bay Dry Bulk Terminal for four years, and was seeking to acquire additional export capacity to allow it to export in excess of one-million tons a year.
Meanwhile, Petmin reported that its programme to delineate the ore-body at its silica production operation, SamQuarz, had been completed.
An updated reserves and resources statement would be published in the next quarter, with the company expected an increase in proven reserves to 45-million tons of quartzite, compared with the current ten-million tons of quartzite.
Further, the company announced that it, along with its joint venture partners Framework Investments, had appointed Bradley Doig and Lebo Mogotsi as directors of the Veremo iron-ore project. A feasibility study was expected to be completed for the project by June 30, 2010.
© 2009 Petmin Limited