CAMEC and Coal
CAMEC has recognised that it is in a strong position to capitalise on opportunities within the coal sector. The Company intends to develop a portfolio of coal projects in Southern and Central Africa and become a leading investor within the region's coal sector. It has evaluated a number of projects which it believes have the capacity to enhance shareholder value. These are predominantly in Mozambique and South Africa although other countries with known coal producing potential are being evaluated.
The primary focus is currently in Mozambique where CAMEC already has a presence. The country has substantial coal resources. In August 2004 the Company acquired licences totalling over 300,000 hectares in the Zambezi Coal Basin in the Tete District of the country. The land package makes CAMEC the single largest holder of licences in the Zambezi Coal Basin and in Mozambique.
The licences were targeted by CAMEC geologists as located in prime areas for coal exploration. The Zambezi Coal Basin is considered one of the world's last and largest unexplored coal provinces with both coking and thermal coal potential. A drilling programme is on-going to identify extractable deposits. Extensive strike lengths - L876: 6 km strike up to 20m thick and L877: 15 km strike have already been located (see 17.01.07 announcement). All licences owned by CAMEC are being evaluated to identify those with the best potential for production.
South African Coal
CAMEC has also acquired prospecting rights for coal in South Africa over 15 farms totalling over 20,500 hectares. The 15 farms are located within the Waterberg, Soutpansberg and Springbok flats coalfields and, based on historical drilling and literature studies, the Company's geologists estimate they have the potential to host in excess of 300 million tonnes of coal. Under the terms signed with South African company AFC Limited, CAMEC has secured a 74% interest in a private company, Legshell 599 Investments (Pty) Ltd, into which AFC has requested the Minister of Minerals and Energy to transfer the recently granted coal rights. The transfer of rights is subject to the applicant being technically competent and capable of carrying out the prospecting work programme. CAMEC believes it meets all the requirements of such a transfer.
