The Lubu Coal project covers 19,236 hectares of the highly prospective Karro Mid-Zambezi coal basin in Zimbabwe, and is located in the established Hwange (Wankie) mining district, which is served with established road, rail and electricity networks.  The project is approximately 120km north-east of the Hwange Colliery and the Bulawayo rail line runs 100km to the south west.

A first phase 36 hole drill programme covering 3,838 metres was completed on the project in Q4 2010, providing 350 samples which have been submitted to the ALS Laboratory group in Witbank, South Africa, for testing, of which 312 have been returned in three batches.  The results of this drilling campaign has enabled seam modelling work which has emphasised the quality and continuity of Lubu’s shallow deposit, the grade parameters, as well as the high coking coal deposits across multiple seams.  The Company’s geologist has attributed an in-situ coal seam tonnage of 786 million tonnes to the initial blocks being drilled, with the potential for additional tonnes to be added when further results are analysed from the recent drilling campaign.

The model for the Main Seam has been updated and new models constructed for the laterally consistent 1B Lower and 1C seams within the blocks that have been drilled to date.  There are a number of seams that occur inconsistently, including the 1B Upper and the 1A seam, which are currently being analysed and will also be modelled in due course.  The Company believes that these seams have the potential to add further tonnage to the Project when analysed.  

The seam thicknesses are in general consistent over the four primary horizons, with the Main Seam averaging 16.87m.  The grade parameters, including swelling indices, calorific values, ash content and volatility were consistent and strongly correlated across all three batches and average yields for the coking coal fraction was 21%.

Batch 1 Results

Batch 2 Results

Batch 3 Results

Phase two of the drilling programme began in Q1 2011.  This phase is designed to in-fill the Phase 1 drill holes, in order to publish a JORC compliant resource on Lubu, and start the drilling of Area 2, which is south of the current drill location.  Two new targets within the licence area have been identified, which present a good opportunity for additional shallow coal which will also be explored in the near future, providing a further opportunity for an increase in the Company’s resource tonnes.