Xceed Resources on track for Bankable Feasibility Study with measured thermal coal resource

Xceed Resources (ASX: XCD) has upgraded the resource at the Moabsvelden thermal coal project in South Africa from Indicated to Measured, placing the company in a good position to apply for a mining licence and subsequently undertake a feasibility study.

A diamond drilling program of 39 holes for a total 2,868 metres at average drill spacing of 250 metres and depth of 73.5 metres was carried out on the project.

The drilling also increased the resource at Moabsvelden by 20%, with the resource now standing at 66 million tonnes, of which 96% is measured.

Xceed is on track to submit an application for a mining right for the Moabsvelden project later this month.

Managing director Ian Culbert said the upgrading of the Moabsvelden resource to the highest level of geological confidence was an important milestone in the eventual development of the Moabsvelden Colliery.

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 coal.

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%.

However, Xceed stressed that practical yields and actual product qualities could differ, and optimisation studies were necessary as part of the feasibility study to determine the best product mix based off markets available and the company’s ability to cater to them.

Moabsvelden is well situated for success, located in the western portion of the Witbank coal field, which has been the source of more than half of all coal produced in South Africa.

The project is well situated in terms of infrastructure, located in an area that is accessible directly off a sealed road, while a main national road passes 4 kilometres to the south and a railway line runs 2 kilometres to the west.

A number of large thermal coal power stations exist within close trucking distance.

Xceed Resources holds a 74% interest in the Moabsvelden project through its wholly owned subsidiary, Focus Coal Investments.

The company has also applied for ministerial consent to the acquisition of a 70% interest in each of the Roodepoort and Bankfontein thermal coal projects, also in South Africa.