South African focused Xceed Resources (ASX: XCD) has provided an update on the company's activities, which includes the recent application for a Mining Right being lodged with the Department of Mineral Resources in November for the 74% owned Moabsvelden thermal coal project.
Xceed continues to unlock the potential of Moabsvelden, and just last month upgraded the resource by 20% to 66 million tonnes - and importantly - 96% of this resource is in the high confidence Measured category.
Another plus for Moabsvelden is that the project is strategically located in the country's key coal region of Witbank.
Extensive washability testwork has confirmed the resource contains a significant fraction of export grade thermal coal as well as domestic grade coal, with each accounting for about half of the total product.
The results of the washability testwork indicate that the combined average theoretical coal product yield to produce a primary product of 26 Megajoules per kilogram (MJ/kg) and a 20MJ/kg secondary product is 63%.
Agreements reached on Roodepoort and Bankfontein
Following execution of an earlier Memorandum of Understanding, Xceed has now completed and executed comprehensive binding legal agreements with Hampfuna Mining and Exploration for the Roodepoort and Bankfontein thermal coal projects.
These agreements, which remain subject to Ministerial consent in terms of Section 11 of the Mineral and Petroleum Resources Development Act 2002, enable the company to acquire a 70% interest in the two projects.
The reason why these acquisitions are so important for Xceed is the location within the Witbank and Ermelo coal fields, and close proximity to Moabsvelden.
Boosting the prospectivity of the projects historical drilling on each project has indicated the presence of high yielding, export quality coal. An application for Section 11 approval was submitted in late August and is currently being processed by the regulators.
Due diligence progresses
Xceed, as part of its due diligence on Roodepoort and Bankfontein projects, the company has sought and received permission from the land owners for each project to access each area, and undertake a short program of confirmatory drilling.
This includes twining three historical holes on each project in order that the veracity of the results of the historical drilling can be established.
A diamond drill rig has already been deployed to the Bankfontein project, and the first of the planned three holes has been completed - with the program to take about a week, before the rig then moves to the Roodepoort project.