December 02, 2008

Miranda and Ihlosi forms JV to explore Sesikhona Kliprand deposits

South Africa exploration company Miranda Mineral Holdings announced that it had entered into a JV agreement with junior firm Ihlosi Project Mining to do more exploration and mining at its Sesikhona Kliprand coal and anthracite deposit in KwaZulu Natal. Miranda Mineral said that analysis of samples and existing borehole data showed an estimated deposit of some 22 million tonnes of high grade anthracite, of which 10 million tonnes are conducive to opencast mining.

Miranda in a note to the JSE said that Ihlosi would pay Sesikhona Kliprand an initial fee of ZAR 6 million of which ZAR 1 million was payable within 7 days from signature of the agreement and the remainder in ZAR 500,000 a month installments for the next 10 months.

Ihlosi would conduct a program of confirmatory drilling of existing drill holes and bulk sampling. Upon completion of satisfactory prospecting activities and approval by the Department of Minerals and Energy, Sesikhona Kliprand would then immediately apply to the department for the conversion of the prospecting permit to a mining license.

Once a mining license had been obtained, Ihlosi would have the exclusive right to mine the project and once production started it would pay Sesikhona Kliprand a participation fee of ZAR 50 per tonnes of coal mined over the life of mine, increasing yearly in line with the consumer price index.

Miranda holds an 88% direct and indirect stake in Sesikhona Kliprand with the local community holding the remaining 12%.