Shumba forecast depressed coal prices
Boitshepo Majube | Friday April 4, 2014 15:07
In its consolidated statement of comprehensive income for the half year, ended December 31, Shumba Coal states that in the reporting period they have seen the continuation of the depressed environment for junior miners seeking to raise capital in all markets.
The company Chairman Alan Mitchell Clegg says relatively low operating costs coupled with disciplined execution of the company long-term strategy, has put Shumba Coal in a strong position to take advantage of the current environment.
The company has revealed that its core strategy remains unchanged.
Clegg said they would continue to focus on acquisition and development of highly prospective coal exploration in Botswana and their objective is to develop the production and sustainable supply of thermal coal from the supply for both domestic and export markets, yet enhanced by the added intent to construct a 300 mw IPP at Sechaba.
He also stated that the company continues to pursue the transfer from impact to Shumba of the four additional licences announced in May 2013 and for which the purchase was subject to the successful renewal of the prospecting rights. Ministerial approvals, which they expect, will be forthcoming before year-end.
Clegg said the company remains adequately funded to meet its current committed expenditure requirements in the coming financial year. “There are plans to execute a new fundraising in April/May 2014 on the back of the permission and confirmation of the dual listing from Stock Exchange Mauritius,” he said.
The company also stated that during the year they had specific issues of shares for part settlement of the Fleming Asset Management loan of $125,000.
Concerning its growth, Shumba said management has maintained a low cost structure and focused on investment for project value growth towards early project execution. Also, they have completed and received critical reports and studies, amongst them an upgrade of the Sechaba Project Resources to 1.14 billion tones of in-situ coal of which approximately 260 Mt is in measured and indicated categories underwriting the pre-feasibility of the project.
“The completion of an independent power transmission study by NorConsult to further underwrite extended investigation into the establishment of an independent power plant at mine mouth on Sechaba.”
Shumba Coal also revealed that management has engaged consultants to complete the strategic water source studies required to underwrite the project viability at pre-feasibility level. The consultants would also underwrite for completion of the EIA requirements as well as the first phase of the IPP studies required and for the coal handling infrastructure and washing plant facilities.
“The company is targeting completion of the pre-feasibility engineering for 5Mt mine and beneficiation facility by end August 2014 and will add supporting underwriting of the PFS with completion of the strategic water resources studies and EIA by November 2014.”
Shumba said relatively low operating costs coupled with disciplined execution of the company long-term strategy, has put them in a strong position to take advantage of the current environment.