NOWA RUDA PROJECT

In July 2013 Balamara was awarded the exclusive rights to this exciting coking coal project in south-western Poland. Balamara’s 100%-owned Polish subsidiary company – Coal Holding – has been granted with Exploration Concession for Nowa Ruda Coking Coal Deposit by The Government of Poland, providing an exciting opportunity for the Company to reposition itself as a significant mid-tier player in the international coal industry.

About NOWA RUDA

In July 2013 Balamara was awarded the exclusive rights to a world-scale coking coal project in south-western Poland which comprises a previously developed underground mine with historical production over several decades of around  1 Mtpa of high quality coking coal. Mr Andrzej Zibrow, an experienced Polish mining executive has been appointed as Chief Executive of Coal Holding, with responsibility for managing all corporate, technical and operational aspects of delivering the Nowa Ruda Coking Coal Project within Poland.

Balamara’s preliminary drilling program has been completed and an updated JORC Resource has been delivered in June 2015. At present a Pre-Feasibility Study is also being completed.


History of mining in Nowa Ruda

Coal mining has been conducted in the Lower Silesian Basin since late XV century, making this one of the oldest coal producing regions in Poland, typically averaging 0.25 – 0.5 Mt coking coal per annum prior to 1945. Post 1945 production increased significantly and around 1980-1995 production peaked at an average 1.0 – 1.2Mtpa.

Over the two decades up until closure the mine (1995) Nowa Ruda produced approximately 1 Mtpa of coking coal and over 90% of this coal was sold into local coke plants, with the majority being sold into the Walbrzych plant, located only 40 kms away and linked by rail.  This gives Balamara further confidence that the end-product may be acceptable to local coke plant requirements.


Project Pathway

Concession Area (sqr. km)


Boreholes drilled within Balamara's Drill Campaign


Approx. combined lenght of drilled boreholes (m)


Historical Boreholes applied in Geological Report


Total JORC Resource (Mt)

Exploration Concession Area


Nowa Ruda Announcements:

 


Governmental Decisions:


Minister of Environment Exploration Concession Decision No 8/2013/p of 18.07.2013

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Exploration concession decision amendment of Minister of Environent of 12/01/2016, implementing previous decision No 8/2013/p

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NOWA RUDA Geological Report Approval Decision

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LECH Field Deposit Development Plan Approval decision issued by District Mine Office in Wrocław of 30/07/2015

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Deposit Description

Nowa Ruda is the only coking coal asset owned by Balamara Resources Ltd. It is located in the Central Sudeten range within the Lower Silesian Coal Basin, close to the Czech Republic border. It consists of a single lease area covering two large, adjacent coal deposits – known as the WACŁAW on the north and LECH on the south. Both fields are considered as two deposits, separated by the major fault oriented in axis NW – SE. Coal seams within the concession area ranges up to 2.75m at WACŁAW Field and even up to 7.0m at LECH. The project covers a surface land area of approximately 26 km2 and extensive key infrastructure including roads, rail, power and water is in place in this area.


Exploration Works

Polish Geological Report, prepared by Balamara on a basis of own Preliminary Drill Campaign as well as purchased historical exploration data has been approved for both WACŁAW and LECH Fields by Ministry of Environment in December 2014. Included Mineral Resources Committee (K.Z.K.) evaluation decision states the balanced-class Resource as equal 83,886 Mt for WACŁAW and 32,097 Mt for LECH (totalling 115,983 Mt) within Polish resource reporting standards. Cautious JORC-coherent estimation has also been applied, showing total Resource as 86.4 Mt. This Resource Estimation was prepared using existing data from 11 historical drill holes and substantial associated data. Balamara Resources Ltd. is also successfully carrying out the drill campaign as a part of exploration works. Total length of boreholes drilled by Balamara is equal over 7.5 kilometres. Every drillhole has been made with regards to all JORC standards, obtaining 100% core yields. Full length of each borehole has been fully logged by experienced geophysics company- “Geofizyka Kraków”. Hydrogeological works have as well been applied, including pumping and studying every one of the aquifers present within the overburden. Cores have been sampled and forwarded to certified laboratories within Poland to be tested accordingly to internationally recognized standards. Scope of laboratory works included geotechnics, geomechanics, hydrogeology as well as coal quality test.

The experienced Mining consulting firm HDR were commissioned to perform an evaluation of the Nowa Ruda project using a combination of 11 historical drill holes, 7 new holes completed in 2015 and purchased historical data. The Pre-Feasibility Study has been completed subsequently in 2015, revealing the high quality and economy of the Nowa Ruda deposit. The coal quality data is shown in the Table below.


Resource
Calss.
Tonnes
(Mt)
Raw
moisture
(adb), %
Raw
volatiles
(adb), %
Raw
sulphur
(adb), %
Raw
ash
(adb), %
Raw
GCV
(kcal/kg)
WACŁAW
Measured
Indicated
9.9 1.06 18.94 1.32 26.11 25.13
WACŁAW
Inferred
45 1.03 18.86 1.14 29.17 24.23
LECH
Measured
Indicated
20.5 0.85 18.25 0.73 24.63 25.03
LECH
Inferred
11 0.89 18.12 0.81 27.02 26.64
TOTAL 86.4

Mining Method

Based on historical exploration data, recent drill campaigns, core sampling and laboratory analyses, submitted Polish Geological Report and state-of-the-art design and engineering works, Balamara Resources has successfully completed, submitted and been awarded with approval of District Mine Bureau (O.U.G.) in Wrocław for its Deposit Development Plan in June 2015. This document is considered as a significant milestone on a way to Mining Concession Application. Considering high variations of seams dips across the deposit (from completely flat zones to highly dipping areas) Deposit Development  Plan has been complied with assumption for mixed mining method, i.e. to apply both Room-and-Pillar as well as longwall systems.

Room-and-Pillar method is being based on a network of perpendicular, crossing workings, with pillars of coal mass in between, providing better roof support and giving ability to control strata subsidence when mining front is in progress. Room-and-Pillar mining will suit perfectly local conditions of Nowa Ruda Project- especially in non-dipping zones, which are also mostly composed of best quality coking coal across the deposit area. It should have been noted that Room-and-Pillar mining provides higher safety for the miners in terms of gas-bursts hazard. Gas saturated within the seams may be easier drained and ventilated due to dense network or workings, hence greater drained surface than in longwall mining. Room-and-Pillar is a method providing high selectivity and flexibility of mine geometry, being successfully applied worldwide in mines, where complex tectonics makes longwall mining challenging and uneconomical in some cases. Room-and-Pillar applies self-propelled machinery, what gives the advantage of inexpensive and rapid transportation, without necessity to disassembly the vehicles before deploying them underground. Advanced geotechnical analyses have been conducted in order to develop the safest and most efficient mine geometry (including pillar sizing, workings offset etc.), tailored to local Nowa Ruda conditions. Mining itself is designed to be carried out with application of state-of-the-art machinery, including highly efficient continuous miners, shuttle cars and conveyers as a basic equipment. In order to provide safety for the miners, a set of bolter vehicles will be applied, to secure roofs and sidewalls with bolted support, reinforced with steel plates and meshes.