Scoping supports flagship development

0 Comment
 23 Sep 2013   Posted by admin


A scoping study has found Atrum Coal’s flagship Groundhog anthracite project in Canada to be a low capital expenditure opportunity for a 1.8 million tonnes per annum run-of-mine (ROM) operation.
The study indicated a five year initial mining, processing and transport cost of about US$85 per tonne on a contract basis, with a target of less than US$70/t as an owner-operator.
Based on a 1.57 billion tonne JORC-compliant resource, the study targeted first shipment in the fourth quarter of 2014. It indicated the project could have a before-tax free cashflow of US$107 million per year, increasing to US$293 million per year at an aspirational rate of 3mtpa of anthracite production.
The study was modelled on extraction from coal seam #70, which ranged in thickness from 1.3m to 5.5m and was known to sub-crop close to surface along at least 6km of strike length, with no significant oxidisation of the coal seam.
The Perth-based company will undertake a pre-feasibility study (PFS) that would include the results from 43 drill holes completed during 2013. Results during the year included 5.49m of coal at 18.75m depth and 6.8m of coal at 30.4m depth.
“With such encouraging drilling results, the company is confident of reporting upside in the PFS compared to the scoping study,” Atrum managing director Dr Eric Lilford said.
“It is important to note the scoping study considers only one seam of 16 potential economic and mineable coal seams, from approximately 5 per cent of the company’s 22,815 hectare contiguous land holding, leaving potential upside in future economic analyses.”
Atrum had secured 1.5mtpa of port capacity at Stewart Bulk Terminals, from 2014.