In May, emerging anthracite producer ZYL delivered a 30% increase in Kangwane Central Project total Resource to 177.7 million gross in situ tonnes. This estimate is tipped to increase in the near future.
ZYL is working towards completion of its Bankable Feasibility Study (NYSE:BFS) at the Kangwane Central Project.
The coal reserves exist within the 177 million tonne Resource, with the resource supporting a life-of-mine in excess of 10 years, with an initial 1.2 million tonnes saleable product per annum.
These reserves are also expected to be upgraded to Proven shortly, with Ian Benning, chief executive officer, commenting that the company anticipates a further global resource increase in the near future on the project as a whole.
The probable reserves were defined through the pit optimisation exercise based on the known geological model and various economic parameters, conducted by RSV Enco.
Further open pit potential exists, however the current focus is Phase 1 production from Kangwane Central in the shortest time period.
"These proven resources will be a major milestone in the development of Kangwane Central as it provides increased confidence in the project economics allowing us to achieve our ultimate goal of bringing the Kangwane Central - Southern Open pit into production.
"We are a significant step closer to achieving our objective. We are extremely pleased with the announcement of the maiden ore reserves, and the product quality that could be produced from the Kangwane Central - Southern Open Pit, which we believe will be a low production cost operation."
ZYL is working towards completion of its Bankable Feasibility Study at the Kangwane Central Project, with the study to incorporate the results from the company's recently completed Phase 3 drilling program, within the associated Competent Persons Report (CPR).
Importantly for ZYL - further improvements to the resource tonnes, economics and product specifications are expected as additional geological data from the drilling program are incorporated into the final CPR - which is expected to be received in August.
Today's reserves statement is an important milestone for ZYL. There are potentially significant ongoing catalysts in 2012 for ZYL. In addition, it should not be forgotten the interest from third parties regarding a corporate transaction.
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