Universal Coal on track for milestone Feasibility Study at Brakfontein thermal coal project

Universal Coal (ASX: UNV) plans to undertake a Feasibility Study at the Brakfontein Thermal Coal Project in South Africa in 2012 following a resource update, with a JORC Measured Resource of 70.53 million tonnes.

Chairman Dr Tony Harwood said; “It is very pleasing to report a Measured Resource at Brakfontein. We now have a very high level of confidence in the resource that allows us to apply for a mining right and proceed with a feasibility study.”

The company is aiming to start the Brakfontein Feasibility Study in early 2012, and is targeting mine development in 2013.

Coal at the project is contained within four seams with characteristics typical of the Witbank Coal Field, which hosts the deposit.

In addition to the Measured Resource, Brakfontein has an Indicated Resource of 14.9 million tonnes, and Inferred Resource of 2.2 million tonnes.

Universal is targeting run of mine production of 1.5 million tonnes per annum.

The company will earn a 50% interest in Brakfontein through delivery of the Feasibility Study, and has the opportunity to increase its holding to 74%.

South African operations

Brakfontein is one of Universal’s three near-term thermal coal production assets hosted by the Witbank coalfield in South Africa.

Importantly, the majority of South Africa’s electricity is coal generated, and most of that comes from the Witbank coalfield.

The company also has two prospective coking coal projects in the country that it is looking to develop.

DJ Carmichael maintains buy recommendation

A recent report from DJ Carmichael confirmed Universal Coal’s prospectivity, with the broker increasing its valuation on the company to $0.84 from $0.76.

This upgrade was made on the back of a resource increase at the company’s Berenice/Cygnus project, which took the total Resource to 1.32 billion tonnes, with 402.4 million tonnes in the Measured and Indicated categories.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/23206/universal-coal-on-track-for-milestone-feasibility-study-at-brakfontein-thermal-coal-project-23206.html