It is reported that South African focused coal explorer Firestone Energy reported that FSE and Sekoko have entered into a new agreement for FSE to acquire an interest in the prospecting rights held by Sekoko over the farms Swanepoelpan and Duikerfontein.

Mr John Wallington MD of Firestone said “we believe by increasing the mineral reserves, our ability to offer large sustainable low cost coal supplies to one of the nearby planned power producers has been materially enhanced.”

Duikerfontein is immediately adjacent to Swanepoelpan.

From today JV agreement announcement, it is expected to add significant additional size and scale to the existing Sekoko and Firestone Waterberg project.

AUD 72 million-capped FSE has a current JORC Waterberg resource estimate of 3.802 billion tonnes of embedded coal for 1.33 billion tonnes of de-shaled coal in product under five farms in the Waterberg Coal Region under the JV with Sekoko Coal Resources.

Drilling data from nine exploration holes on these farms indicate that the full sequence of 12 coal zones exists on these farms. Three holes on farm Swanepoelpan indicate access at shallow depth to coal within 1.5 kilometers west of the proposed Smitspan pit. Agreement is subject to the approval of FSE shareholders all regulators and FSE financiers.

FSE will acquire a 60% interest in the rights relating to the above two farms, with Sekoko having a 40% interest. FSE will pay Sekoko a non-refundable amount of AUD 100,000 immediately a further non-refundable payment of AUD 100,000 on or before July 1st 2010 and a cash payment of AUD 1,800,000 on or before July 31st 2011.

(Sourced from www.proactiveinvestors.co.uk)