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Penrhyn Coal Project

OVERVIEW

EL 4525 Robins Rise is principally a coal tenement that covers the emerging Penrhyn sub-bituminous coal deposit. EL 4907 Lake Woorong adjoins EL 4525 to the west and the two tenements cover a combined area of 1,707 sq km. The project area is situated in the Northern Gawler Craton 40 kilometres south of Coober Pedy and 11 kilometres from the Adelaide to Darwin rail line. The tenements are held 100 % by Southern Coal Holdings Pty Ltd, (SCH) a wholly owned subsidiary of WPG..

EL 4908 Perfection Well is also in the Coober Pedy region and covers an area of 632 sq km. The tenement is prospective for the discovery of new coal deposits in the Arckaringa Basin sediments.

SCH Tenements in the Coober Pedy Region

GEOLOGY & EXPLORATION

The Penrhyn coal deposit was discovered in 1995 as part of the South Australian Exploration Initiative and was subsequently explored by the South Australian Steel and Energy (SASE) joint venture. The deposit lies within the Arckaringa Basin and the quality of the sub-bituminous coal is generally similar to other Arckaringa Basin coals. Estimated dimensions of the Penrhyn trough are 25 kilometres long by 3 kilometres wide.

In early 2019 WPG completed a traverse of four diamond drill holes across the width of the Penrhyn Trough. The two central holes intersected several coal seams of varying thicknesses and confirmed the results of the historical, mostly open hole, drilling done by PIRSA and reinforced the potential for a coal deposit of significant size.

In June 2019 WPG followed up the encouraging results from the 2019 drilling with a systematic program of resource definition drilling comprising 19 open holes and 12 diamond drill holes for a total of 4,636 metres drilled. Results defined four significant coal seams together with two coal bearing stratigraphic horizons that are host to between two and four seams. The relatively flat lying coal seams are in places up to 8 metres thick and lie at depths ranging between 60 and 145 metres beneath a 60 metre deep sequence of Eromanga Basin sediments and surficial cover.

A typical cross section through the Penrhyn deposit and an orthographic projection of the L (green), J (pink) and R (grey) seams together with the drill hole traces are shown in the following two diagrams. Note that the vertical scale in both figures has been exaggerated by a factor of 10, so that the stratigraphy can be better illustrated. The line of the cross section is shown in red on the drill hole location diagram below.

Typical Cross Section Through the Penrhyn Coal Deposit

Wireframe Model of the Penrhyn L, J & R Seams at Penrhyn

RESOURCES

The results of the drilling provided sufficient data for a maiden JORC compliant resource estimate. The estimate was based on detailed geological logging and interpretation of chips and PQ core, seam correlation and 3-D modeling, assisted by results of down hole multi-probe geophysical logging that was carried out in each of the drill holes.

The total identified coal resource at Penrhyn is 352.4 million tonnes.

Details for each of the resource categories are shown in the following table.

Resource

Category

Tonnage

(million tonnes)

Measured coal resource
185.4
Indicated coal resource
150.5
Inferred coal resource
16.5
Total coal resource
352.4

 

COAL QUALITY TESTING

A total of 180 seam ply samples collected from the 10 diamond holes drilled along the axis of the trough together with a selection of representative roof and floor samples were submitted for laboratory coal quality, washing and other test work. Results showed total moisture levels consistently in the range 30 – 40 percent with a trend towards slightly lower levels in the deeper seams. Calorific values ranged from 20.6 to 27.7 MJ/kg. Water washing tests were carried out on twelve seam composite samples and results indicated that significant salt removal and ash reductions could be achieved using simple water washing processes.

EXPLORATION TARGET

The zone covered by the recent resource drilling program is shown in the following diagram and covers an area of approximately 21sq km. This area is approximately 28 percent of the total area of the Penrhyn Trough held under tenure in EL 4525.

Penrhyn Resource Area and Exploration Target Zones

The drilling program has also enabled 5 additional areas to be outlined, each with good potential for extensions to the known coal seams. These blocks extend out from the defined resource zone and when combined form a new exploration target that is estimated to be in the range of 300 to 330 million tonnes.

This exploration target is based on the drill hole and coal quality data that is currently available and is conceptual in nature.To date there has been insufficient exploration in these additional areas to define a coal resource there, and it is uncertain at this stage if additional future drilling will result in the definition of additional coal resource in the Penrhyn Trough.

FORWARD PROGRAM

SCH has commenced pre-feasibility studies for the development of an open pit mine at Penryhn.

Coal and iron ore exploration will be commenced on the Perfection Well and Lake Woorong project areas now that these tenements have been granted.

 

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