Fresh from a $1.8 million capital raising, Mozambi Coal (ASX: MOZ) has had some early exploration success in Mozambique, intersecting Karoo Coal seams at the company's Tete West project, which is located in the highlighly prospective Zambeze Coal Basin.
The company has a significant exploration position within the country, with three projects covering over 600 square kilometres, with a combined Target Mineralisation of between 4.96 – 6.19 billion tonnes of coking and thermal coal.
Drilling at Tete West in the current program includes five diamond holes for 1365 metres, with the first 35 of 52 samples already received.
Mozambi said that the coal seams encountered in the licence area are generally thin, and importantly the quality is average for the Tete Province.
Cumulative coal seams thickness included 8.00 metres, 5.15 metres and 4.15 metres.
Detailed geological logging of the core is now underway to determine the stratigraphic position of the seams, with the view to correlate this information with other known coal seams in the region.
Correlation of the seams and estimation of the quality of each seam will then be finalised once the remaining results are received.
The next step is the drilling results will be incorporated into the company's geological model for the licence area.
Songo project - drilling set to commence
First pass drilling at the Songo project is set to kick off early in the December quarter.
This will include first pass stratigraphic diamond drilling and down hole geophysical logging of selected target areas within the project, once the appropriate equipment can be secured.
In addition an airborne magnetic survey is planned for the company’s Muturara Project, which is located 58 kilometres southeast of Tete.
Zambeze Coal Basin - Rio Tinto and Vale
The Riversdale projects include Zambeze, where 9 billion tonnes of coal has been identified over 22 coal seams, with an agreement in place for Wuhan Iron & Steel to acquire 40% of project for US$800 million.
At Benga, 4 billion tonnes have been identified with a mining contract granted by Mozambique government for a 20 million tonnes a year operation.
Vale (NYSE: VALE), owns the Moatize Project with a resource of 1.4 billion tonnes, and is set to commence production this year at a rate of 11 million tonnes per year of coking and thermal coal.
Mozambique is a stable multi party democracy with a developing resource sector, and hosts one of Africa’s fastest growing economies with GDP growth rates between 4.5% to 7.6% over the last few years.
This has been aided by investments from China, India, and Brazil, directed into resources and infrastructure projects.
The country also contains massive coal resources in the Zambeze Basin, which currently stand at over 17 billion tonnes, and hold significant potential for further resource upgrades.
This coal has been identified as premium hard coking coal that is the same quality as contained in the Bowen Basin of Queensland.
If Riversdale is any guide, evolving into a multi-billion dollar valued company, Mozambi offers investors a potentially exciting future.