IRW-Press: Update On Bankfontein Project And Project Financing Of Moabsvelden

by Press Office

(IRW-PRESS and WireNews+Co) - Vienna, Austria - 01 October 2012

Xceed Resources Limited (ASX: XCD) (Xceed or Company) is pleased to provide an update in respect of its Bankfontein Project and the financing of its Moabsvelden project:

Bankfontein (XCD: 15% earning 70%)

The Company has received a Competent Persons Report from its independent geological consultants, Gemecs (Pty) Ltd (Gemecs), in respect of the initial drilling programme undertaken on the Company’s Bankfontein project located in the Ermelo coalfield, South Africa.

Gemecs report that the JORC compliant in-situ resources on the project currently total 19.76 million tonnes (mt) (Indicated 6.05mt Inferred 13.71mt). 15.84 million tonnes (Indicated 5.94mt Inferred 9.91mt) of this total are of potential economic interest as they are contained within the high yielding, high quality B Lower and C Lower seams of the Ermelo coal field.

The Indicated and Inferred resources contained within the B Lower seam total 11.63mt and have an average seam thickness of 2.13m. The Indicated and Inferred resources contained within the C Lower seam total 4.21mt with an average seam thickness of 0.85 metres. If mined, the coal would primarily be extracted by underground mining means, potentially accessible from an initial open cut operation. Two areas have been identified where the stripping ratios are low enough (sub 4:1) to potentially support an initial open cut mining operation, thereby enabling a low cost access to underground mining.

Washability testwork undertaken indicates that primary yields to produce an export quality coal product average 66% in the case of the B Lower seam and 95% in the case of the C Lower seam.

All of the objectives of this initial drilling programme, namely: to establish that a sufficient tonnage of in-situ coal exists, that the seams of economic interest are of mineable thickness, and that access from the high wall of an initial open pit operation is possible, have been satisfied. Accordingly, follow up work is warranted.

The resources statements prepared by Gemecs are attached as Annexure 1.

Moabsvelden Project Financing

Bank funding

As previously advised, the Company has received from locally based South African banks indicative, non-binding offers of project finance for the development of its Moabsvelden thermal coal project located in the Witbank coalfield, South Africa.

To enable these financial institutions to submit final credit approved offers of project finance, Badger Mining & Consulting (Pty) Ltd (Badger), a locally based consultancy firm with recognised expertise in the South African coal industry, has been appointed on behalf of the financial institutions to undertake an independent technical review of the Moabsvelden bankable feasibility study. That review is expected to be completed in the coming weeks. Subject to the results of the Badger review, the Company expects to finalise the process of obtaining project development finance for Moabsvelden in the next quarter.

Equity partner

As previously advised, the Company has entered into a Memorandum of Understanding with Thebe Mining Resources (Pty) Ltd (Thebe) pursuant to which it is proposed that Thebe will invest R90 million in the Moabsvelden project. The proposed transaction is progressing with independent technical consultants acting for Thebe having reviewed the Moabsvelden project and reported to Thebe that they are satisfied with the information that has been provided to them. The Thebe investment committee has met and approved an initial investment of R65 million into the Moabsvelden project company and formal documentation governing this investment is currently being drafted. The Company and Thebe are currently working through a process whereby the balance of the R90 million funding will be introduced. The proposed transaction with Thebe remains dependent upon a number of conditions being satisfied, including the Company obtaining a credit approved offer of development finance from a bank.

For further information regarding the Company, please contact the Company on +61 8 9226 0329 or refer to www.xceedresources.com.au (http://www.xceedresources.com.au).

For and on behalf of the Board of
Xceed Resources Limited

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Ian Culbert
Managing Director

Competent Persons Statement:

Information in this announcement that relates to exploration results and mineral resources in respect of the Roodepoort and Bankfontein thermal coal projects is based on information compiled by Mr Kobus Dippenaar, Pr.Sci.Nat, B.Sc Hons (Geology), GSSA, who is a senior coal geologist at Gemecs (Pty) Ltd who have consulted to the Company. Mr Dippenaar is a member in good standing of the South African Council for Natural Scientific Professions (SACNASP No. 4090079/94) as well as a member of the Geological Society of South Africa. Both organisations are Recognised Overseas Professional Organisations. Mr Dippenaar has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration, Mineral Resources and Ore Reserves’. Mr Dippenaar consents to the inclusion in the presentation of the matters based on his information in the form and context in which it appears.