Morupule South Coal Project

The Morupule South Coal Project is located directly to the South of the Morupule Colliery, the only one currently in operation in Botswana. The project consists of one prospecting licence (PL121/2010), covering a total area of 264.4km2 between the towns of Serowe and Palapye - within the South East central Kalahari Sub-basin of the Karoo Supergroup.

Historical work has shown that the prospecting license has the potential for a significant tonnage coal operation. The presence of encouraging drill intersections from previous explorers and the proximal location directly adjacent to the Morupule mine demonstrate that significant mineable coal seams are located within the area. This is further supported by a Preliminary Report undertaken by GEMECS.

The Morupule South Project has a JORC Inferred coal resource of 414.3 Million Tonnes. In addition to this an exploration target of an additional 700 to 800 Million Tonnes has been estimated for the lower “Morupule Main” seam. Future exploration and coal testwork has the potential to increase the current resources by utilizing the upper coal seams.

Coal quality intersected in the historical drilling is limited; however the data suggests thermal coal with low sulphides, medium to low ash and calorific values suitable for thermal use. No wash testing has been done to date.

Key features and main opportunities of the Project:

 414.3Mt of coal already classified as a JORC Inferred Coal Resource

 Estimated exploration target of around 700Mt to 800 Million Tonnes

 Adjacent to Botswana’s only operating Colliery.

 The relatively unexplored middle and upper seams have the potential to add value to the project.

 Positive Preliminary report on geology and coal resources prepared by GEMECS in March 2011.

 Historical coal quality indicates the coal to be comparable to the coal currently being exploited at the adjacent Morupule Mine.

 The Botswana Government has approved a 400MW expansion of the current coal powered electrical plant, which is situated less than 10km from the project.

 No wash testing has been carried out on the coal and the potential for producing export quality coal is tangible.

Coal Quality

A range of "Raw Coal Quality" has been sourced from historical data. The ranges are presented on the table below.

No recent testwork has been completed and no washability tests have been carried out on this coal.

The quality of this coal is comparable to that being mined in the adjacent Morupule Mine.