Summary of Exploration Work

In evaluating the coal potential of licences 804L and 805L, which comprise the Ncondezi Project, the licences were split into seven separate blocks where prospective Karoo sediments are located. These blocks are North, South, West, Central, River, East and North Eastern. The West block is further segregated into three sub-blocks.

Current resource reporting is based on these blocks, particularly the South, North and West Blocks of the Ncondezi Project where the majority of drilling and exploration has been carried out. 65 individual coreholes were originally drilled on the licence blocks over the course of the 2007/2008 drill program, and samples were sent to ACT laboratories in Tete for wash tests. In 2009, a further 57 holes with geo-physical logs were drilled, three of which were core holes and 54 of which were percussive holes, including 31 twinned holes and 23 new holes. In total, 122 boreholes have been drilled by the Ncondezi Group over 16,737 metres on the Ncondezi Project.

The figure below details the Ncondezi Project licences with designated blocks and completed holes.

Source: SRK Consulting (UK) Ltd

In addition to the exploration work mentioned above, samples from the 3 core holes from the 2009 drill program were sent to the ACT laboratory in Pretoria for a detailed set of coking coal tests and identified the potential for coking coal. Further details are set out in the Coking Coal Potential page.