Universal Coal is successfully executing the company strategy of increasing resource holdings around its core project areas and has now been granted a prospecting right near to its proposed Kangala thermal coal project.

Through a 74% owned subsidiary a prospecting right has been granted for coal over certain portions of the farm Goedgedacht 228 IR located just 8 kilometres east of Kangala. Kangala will be an open pit operation with a 1.7:1 stripping ratio which allows for a low average life-of-mine operating cost of less than AUD 13.50 per run of mine tonne.

Just last month, Universal completed the optimisation of the Bankable Feasibility Study for Kangala, confirming saleable coal tonnages of about 2.1 million tonnes per annum from a planned 2.4 million tonnes per annum run of mine production rate over the life of the mine.

The initial pit will deliver an eight year life of mine from a defined and proven reserve of 19.5 million tonnes. Further upside is possible with the pit located adjacent to properties with an additional 65 million tonnes of Indicated and Inferred Resources within a total resource base of 124 million tonnes.

The prospecting right valid for four years from date of execution covers an area of 215 hectares and is strategically located directly between Exxaro Leeupan Mine and Stuart Coal Mine immediately adjacent to Exarro coal load-out rail loop.

Mr Tony Weber chief executive officer added that "We are delighted to have secured an additional prospecting right in the Kangala area. He said that this is in line with Universal strategy of further developing the available resource base around the company.”

Source - Universal Coal

(www.steelguru.com)