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Strategic Natural (SNRP)

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Wednesday 09 May, 2012

Strategic Natural

JV, commencement of mining and operational update

RNS Number : 9078C
Strategic Natural Resources PLC
09 May 2012
 



Strategic Natural Resources Plc

("SNR" or the "Company")

 

Entry into a joint venture agreement, commencement of mining and operational update

 

SNR, the AIM listed natural resources developer operating in South Africa, is pleased to announce that it has entered into an agreement with Trasteel International ("Trasteel") to form a joint venture marketing company which will focus on selling coal to the higher value anthracite market, from the Company's Elitheni mine in the Eastern Cape of South Africa. EliTra will be owned 50:50 by Elitheni Coal (Pty) Ltd (SNR's 74% owned subsidiary) and Trasteel.

 

The Company is  pleased to announce that EliTra has pre sold  its first cargo of anthracite coal to a major Brazilian importer and this cargo is scheduled to be delivered in December 2012. The board of SNR anticipate further pre sale deals in the medium term, with the focus on Brazil and India

 

The anthracite tonnes to be sold by EliTra will form part of the 2 million tonnes of coal under the current Trasteel/SNR offtake agreement.  This arrangement will mean that SNR can achieve a higher price for its coal than it would have selling only a thermal coal under the current Trasteel/SNR agreement. Due to this new opportunity in the anthracite coal market, SNR and Trasteel have agreed to reschedule the coal shipments under the current off take agreement between SNR and Trasteel to later in 2012.

 

Notwithstanding the opportunity in the anthracite market, the Company intends to continue to supply thermal markets with a 5500kcal/kg coal, as per the current off take agreement with Trasteel, in accordance with the revised delivery dates agreed with Trasteel, to accommodate the anthracite sales.

 

Commencement of mining

 

The Company is also pleased to announce that it has commenced mining operations at the Elitheni mine.  The commencement of mining operations follows the recent placing, announced on 7 March 2012, through which the Company raised £8.17 million (after expenses). 

 

Opencast mining operations were commenced in April 2012 with circa 40,000 tonnes of coal expected to be exposed through blasting scheduled for May 2012. Operations will continue on surface mining until circa 100,000 tonnes of coal is exposed, which is expected to be during the third quarter of 2012.  In addition, the Company has commenced stockpiling unwashed coal in advance of the delivery of a coal washing plant shortly and is expecting to take delivery of a Sandvik low seam continuous miner, capable of producing 300 to 400 tonnes per hour, as soon as opencast operations are complete.

 

David Nel, CEO of SNR, said:

 

"This joint venture signals a strengthening of our relationship with Trasteel. We believe that this new, higher margin anthracite focus will assist greater value creation for shareholders, whilst being developed along side a thermal coal business. We are also very pleased to report rapid progress at the mine in support of this   pivotal opportunity for Elitheni coal."

 

For further information, please contact:

 




Strategic Natural Resources plc


David Nel, Chief Executive Officer

+27 (0) 41 374 842

Jeremy Metcalfe, Communications Director

 

+44 (0)7785 346718



Allenby Capital Limited - Nominated Adviser and Joint Broker


Nick Naylor/Mark Connelly/Alex Price

 

+44 (0) 20 3328 5656



SP Angel Corporate Finance Limited - Joint Broker


Tercel Moore

 

+44 (0) 20 3463 2260



FTI Consulting

+44 (0) 20 7831 3113

Ben Brewerton / Georgia Mann  


 

For further information about Strategic Natural Resources plc please visit www.snrplc.co.uk


This information is provided by RNS
The company news service from the London Stock Exchange
 
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