Elitheni Coal /

Below you can find more information about our company

General Information

• Project near Indwe in the Eastern Cape
• Has been developed by Strategic Natural Resources, UK listed company
• Under the Business Rescue since 2013
• In-situ resources over 260 million mt of coal with 20% anthracite and low sulphur content, able to produce NAR5000 Kcal/kg
• Project has all necessary permits and rights and is ready for immediate implementation
• The asset with significant upside and of high strategic importance
• A jump-start platform for a number of projects in RSA

Strategic Position, Strategic Resource

• Underdeveloped region with high unemployment and underutilized infrastructure
• Significant resources and easy of access
• Rail is present, available to us and sufficient for the initial development as is
• Work force is available and not unionized
• Support from local communities
• Low competition for resources in the area
• Coal is low sulphur, so is considered “green” coal and is suitable for blending with high-sulphur for better grades
• High potential for power plant construction and local use
One of the best opportunities for low infrastructure costs and ease of recovery

All major infrastructure is present

• The mine is 5 miles away from the rail station, road is present.
• Direct rail link to Coegga Port, (Close to Port Elizabeth) deep-sea port with Cape-sized Vessels capacity
• Rail link is dormant since 2001, but is in good working conditions
• Easy quick-fix solution to deliver coal to the station and directly to the port ( by trucks and conveyor being built)
• Alternative rail routes are available to Coegga
• Mine has access to power grid and fully supplied with water
• Nearby towns provide for accommodation of staff, if necessary
NO NEEDS FOR INFRASTRUCTURE INVESTMENTS AT INITIAL STAGES OF DEVELOPMENT

Production Ready

• Mine has been in operations for a short period – proven producer
• Coal has been blocked- out and is ready to be mined
• Staged development is pursued, with initial stages capability of up to 600,000 mt per month
• Limited investments are required for equipment procurement and working capital
• Start-up period is 60 days
• Ramp-up to full capacity is expected within 6 months
• Off-take agreements are in place with preliminary demand in excess of capacity
• Operational risks are reduced by local contractors and outsourcing

Steam Coal Sales

• The Port of Coegga is a Deep Water Port and is located alongside Port of Elizabeth.
• The important aspect of the Elitheni coal is the coal is “Green Coal” and has the lowest Sulphur content of any coal mine in South Africa.
• “Green Coal” is sought after by the end users and Power Stations as it is environmentally friendly.

What are the Changes

• Wrong strategy by the SNR:

• Shallow port (Port East London, only Panamax, no Cape-sized) – more expensive freight
• Coarse milling (50 mm), high impurities, low volatile – wrong product at discounted price
• Anthracite separation, low energy content
• Inflation of costs
• Reliance on capital markets
for working capital
Corrections

• Deep-sea port of Coegga (Close to Port Elizabeth)– lower transportation costs
• Finer milling (30 mm) and better washing to achieve NAR5,000 Kcal/kg
• Anthracite remains to improve quality of steam coal.
• Strict costs management
• Long wall replacement with Short wall (better mining)
• Lower seams development vs. Adit 2 (lower upfront costs)

Elitheni Development

Staged development is envisaged
Preparation Stage (60 days)
Restoration of the mine to production:
• Fencing, check of equipment and facilities
Procurement of services and equipment
• New equipment sourcing and ordering
Necessary testing and initial construction works
• Testing of coal washing plant
• Restoration/renewal of operating permits and authorisation
Initial Ramp-Up Stage (3 month)
• Pilot production to 50,000 tonnes per month
• Installation of necessary machinery
• Initial equipment installation and testing.
• Training of work force and preparation to expansion.

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