Strategic Natural Resources PLC

Initial mining plan completed (in order to commence mining) for 5.5million tonnes of coal

Wednesday 10th October, 2007
Category : Regulator News Service

Strategic Natural Resources PLC (’SNR’), the coal and energy investment group positioned to help ease South Africa’s long term energy crisis, has confirmed that its 90% owned subsidiary, Elitheni Coal (Pty) Limited, has completed an initial mining plan for submission to the South African Department of Minerals & Energy (’DME’). This initial mining plan has been prepared in order to economically extract 5.5 million tonnes of coal from the Elitheni Phase 1 area, being the tonnage required for the initial 5 years of production for Elitheni. Whilst, Elitheni will continue, through further drilling, to convert its inferred resource base into an indicated and measured resource for mine planning purposes, this initial mining plan is significant as it provides the foundation for Elitheni’s application to the DME for mining authorisation and will allow Elitheni to service its initial markets until the commencement of supply to the proposed mine mouth independent power plant.

The area covered by the initial mining plan represents less than 4% of the current Phase 1 & 2 area available to Elitheni to mine. According to current drilling progression as confirmed by the Competent Person and as previously announced, the Phase 1 & 2 area has a resource of approximately 40 million tonnes (comprising 10.1 million tonnes measured coal resource, 1.9 million tonnes indicated coal resource and 28.1 million tonnes inferred coal resource) of coal.

Extraction of the 5.5m tonnes will follow on immediately after the bulk sampling of 90,000 tonnes to provide continuity of sales revenue.

SNR Chief Executive, Jeremy Metcalfe, commented: ‘The successful completion of our initial Elitheni mining plan is a milestone achievement because a portion of the initial measured resource has now been elevated to a proven reserve with the evidence of a viable mining plan, thereby allowing Elitheni to cross the divide from an exploration company to become that of an operating coal mining company’.

For further info contact:
Jeremy P. Metcalfe, Chief Executive
Strategic Natural Resources plc
Tel: +44 1303 874 798

Allan Piper
First City Financial Public Relations
Tel: +44 20 7242 2666

Rod Venables / Cecil Jordaan
HB Corporate
Tel: +44 20 7510 8600

Detail of Coal Reserve Audit

William van der Schyff, from the Company’s consultant geologists and producers of the Competent Person’s Report (CPR), Golder Associates Africa (Pty) Ltd, confirms that Golder used the original 50×50m block model as reported in 10231/ 9399/2/G to include the variables as reported in the Elitheni mine design parameter file. The block centres of the 250×250m blocks were used as the basis for the variable assignment ‘nearest neighbour’ method. By this method the basic mining assumptions from the Elitheni reserve model were included in the Golder model enabling the assay variables and area of the Golder model to be used for confirmation of the initial reserve calculation as follows:

Golder Totals: Filtered for 1.2m minimum mining height
In situ mineable tonnes: 9,030,000 (includes pillars to be left underground for safety purposes)
Extractable Run of Mine (ROM) tonnes: 5,500,000 (60.9% extract rate)