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Resource Generation boosts Boikarabelo coal reserves by 5% to 636Mt

Resource Generation (ASX: RES) has upgraded coal resources and reserves in the Waterberg region of South Africa, where it is developing its giant Boikarabelo mine, after analysis of 28 cored holes from a drilling programme earlier this year.

The Waterberg coal field contains approximately 40% of South Africa’s remaining coal resource and is considered to be the main source of coal in the future.

Boikarabelo’s resources now has probable reserves of 636.0 million tonnes, an increase of 32.7 million tonnes and a new measured resource of 204.0 million tonnes.

The mine also has an indicated resource of 551.7 million tonnes plus an inferred resource of 1.5 billion tonnes.

Mine planning is being undertaken which will enable the measured resource to be upgraded to probable reserve status. This is expected to be completed by the end of November 2010.

Paul Jury, managing director, said "these results are further confirmation of the potential of our Boikarabelo mine to supply large quantities of thermal coal to both the export and domestic thermal coal markets."

"Together with our 20 year contract to supply coal to India’s CESC power utility, the results will also strengthen the attraction of Boikarabelo to financiers as we raise funds to complete the development."

The drilling programme consisted of 5 boreholes on Witkopje South, 21 boreholes on Kalkpan and 2 boreholes on Draai Om.

In addition, the probable reserve in the Waterberg #1 South West area has increased by 11.8 million tonnes, with a related decrease in the indicated resource in the Waterberg #1 North East area of 17.8 million tonnes.

The probable reserve in the Witkopje South area has increased by 20. 9 million tonnes to 321.8 million tonnes.

The measured resource in the Kalkpan area has increased by 204.0 million tonnes, with a related decline in the inferred resource of 255.9 million tonnes.

On September 14, RES signed the first coal off-take contract for Boikarabelo with Integrated Coal Mining,  a major step toward establishing the mine as a major supplier of coal.

Integrated, on behalf of its affiliated company CESC Limited (BSE:CESC IN), will purchase one million tonnes of thermal coal per annum for three years and two million tonnes per annum for a further 17 years.

Integrated Coal Mining and CESC are both parts of the RPG Group, one of India’s largest industrial groups with a market capitalisation of US$3.0 billion. CESC is India’s third largest power utility.

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