Miranda Minerals Holdings Limited
   
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Operations overview
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Coal division  
 
The majority of Miranda’s coal interests are located in the KwaZulu-Natal area of South Africa, which has been home to coal mining for more than a century. Miranda’s activities in these brown field zones are based on deposits of anthracite, bituminous and thermal coal that can be exploited through open cast mining operations using modern technology to access narrow seams.
 
Geological Setting and Model
All of Miranda Coal’s current KwaZulu-Natal mineral assets fall within the central parts of the Klipriver coal field, which comprise of carboniferous sediments of the Ecca Formation and Beaufort Groups of the Karoo Supergroup. There are no pre-Karoo outcrops in the area. The Ecca Group has been subdivided into three groups, namely Lower, Middle and Upper stages based on lithological divisions. There are two major coal seams, Top seam and Bottom seam, which are separated by a coarse grained, pebbly, crossbedded, fining upwards to shale at the top. Various dolerite intrusions cut through the area. The sills displace the overlying sediments by distances equal to their thickness while dykes cause some burning and devolatisation of the coal. The area is generally undulated, caused by the dolerite sill intrusions, with streams running down the hills towards the valleys.

Introduction
Miranda’s coal mining activities in KwaZulu-Natal are divided into nine project areas. Presently, priority in the area is being given to five of these areas, which are represented in the accompanying map of the coal fields areas as Map area A, B, C, D and E.
 
 
 

Sesikhona
Venmyn Rand (Pty) Limited has estimated a resource of 4.4 mt in situ applying geological losses of 15% and a seam thickness cut-off of 0.5 m. The resource was classed to be in the measured category. This valuation was based on a reserve and mine plan prepared by Stefanutti Stocks Mining Services, a division of Stefanutti Stocks (Pty) Limited (“SSMS”), as at June 2010. The valuation result was that the fair value of the Sesikhona project was R120.8 million with total saleable tonnes of 3.6 million tonnes. Miranda Coal’s attributable value in the Sesikhona prospect was therefore R88.2 million, and the anticipated life of mine (“LOM”) for the Sesikhona project was estimated at five years.

In 2011, the Board requested that Venmyn conduct an updated indicative and independent mineral asset valuation on the Sesikhona project. Venmyn has now estimated a resource of 2.8 mt (saleable: 2.6 mt; previously: 3.6 mt saleable) and the resource is classified in the measured category. Due to a 25% lower assumed coal price and the reduced resource estimate, the fair value of the Sesikhona project is now R49.4 million. Miranda Coal’s attributable value has reduced to
R36.6 million, and the anticipated LOM for the project is four years. The adverse downward revision in terms of resources and valuation had not previously taken into account the mined out areas at Sesikhona and now reflects the latest information made available to the Board by Venmyn. The Board is evaluating all options available to the Company on how best to optimally realise the current attributable value of the asset.

Uithoek
The Uithoek Mining Rights have never been owned by Miranda and, therefore, in order for Miranda to ensure tenure, a Section 11 transfer in terms of the MPRDA should be effected. In anticipation of the ceding of the Prospecting Right and/or Mining Right to Miranda, the Company had previously made good faith monthly royalty payments to the Simpson family, which were supposed to be set-off against future royalties payable on mining. The Company is renegotiating a joint venture agreement in respect of Uithoek, the terms of which it believes should not differ materially from the original agreement.

Boschhoek

Shareholders have been advised that the Boschhoek Prospecting Right that was awarded to Applewood Trading 3 (Pty) Limited (“Applewood”), which is a 72%-owned subsidiary of Miranda Coal, is being challenged by the Minister of Defence, because of the possibility of unexploded ordinance on one of the farms. The Minister of Defence is seeking relief to interdict Applewood from proceeding with any prospecting activities and to have the DMR award of the Prospecting Right to Applewood, reviewed. The Board has resolved to enter into direct negotiations with the Ministry of Defence in an attempt to settle the dispute.

 
 
 
 
   
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