Recommences Drilling at 1.57Bt Groundhog Project
Perth, April 16, 2014 AEST (ABN Newswire) - Atrum Coal NL (
ASX:ATU) (ATRCF:OTCMKTS) has commenced a four-week drilling program at its flagship Groundhog Anthracite Project that will target infill drilling of the bulk sample location area prior to trial mining in H2 2014
Managing Director, Dr Eric Lilford commented:
"We have a busy few months ahead of us at Groundhog as we look to achieve first 'coal on ship' before the end of the year. Our PFS is nearing completion and will be released at the end of this month. We have a world-class project at Groundhog and look forward to delivering on this truly once-in-a-lifetime opportunity"
RECOMMENCEMENT OF DRILLING AT GROUNDHOG
Drilling recommenced at the Groundhog Anthracite Project (Groundhog) following the mobilisation of equipment and crew to site. The program will continue during the next four weeks and will take place along section lines perpendicular to the strike of the main structure of the key seam #70. The Company continues to map the extent of the sub-crop and further enhances confidence around the portal and bulk sample locations where it plans to extract up to 100,000t of anthracite.
Following completion of this concentrated drilling program, the Company plans to ramp up the full summer drilling program in June.
The current drilling program consists of a combination of open rotary holes and cored holes with approximately one in every four holes being targeted for coring.
Each drill hole will be positioned to:
- Confirm the depth and thickness of the #70 seam and increase the confidence in the geology / structural model to progress with bulk sample mine construction;
- Categorise the material above the target coal #70 seam including other coal seams, consolidated material and unconsolidated surficial material;
- Run an extensive suite of geophysical logs including density, neutron, gamma, dipmeter, sonic, and possibly televiewer assessments; and
- Categorize the stratigraphy.
The cored holes will be selected to ensure that:
- They are fully described, photographed and sampled as required;
- At least three coal seam intersections are sampled for coal quality analysis, to deliver at least -5kg samples of quality anthracite from the target #70 seam to assist ongoing coal marketing and offtake discussions; and
- A representative selection of cored holes will be forwarded for additional geotechnical and geochemical testing.
In late February 2014, the Company commenced a ground based seismic program designed to model the different coal seams above and below the key #70 seam based on the different densities and conductivity attributes of each seam. This data will be used in conjunction with the geophysical logs of the current drilling program to confirm geological interpretation.
GROUNDHOG PRE-FEASIBILITY STUDY
The pre-feasibility study (PFS) for the Groundhog project is on track for release by the end of April 2014. The Company is finalising a number of the study chapters with the various independent consultants. Early indications are that the project can deliver significant economic upside beyond the 2013 Scoping Study results that modelled a conceptual 1.8Mtpa run-of-mine production profile.
The PFS models the production of 5Mtpa (steady state) run-of-mine production of high grade anthracite across a number of sizing fractions and is focused on a 'cut and cover' room-and-pillar mining method of the single key #70 seam in the north-west zone at Groundhog.
Upon completion of the pre-feasibility study and the economic modelling this month, an announcement will be made to shareholders detailing the findings.
GROUNDHOG BULK SAMPLE
The bulk sample permit application at Groundhog is nearing finalisation with lodgement expected to take place in the coming days. The Company has a meeting with the Mineral Development Resource Committee (MDRC) for 16 May 2014 and it is expected that an announcement to be made to shareholders in the coming weeks setting out the plans for the bulk sample and the detailed method of extraction.
KURO COAL LIMITED SPIN-OUT
The Company is finalising documentation for its Kuro Coal Limited (Kuro) spin-out which plans to list by Initial Public Offering on the ASX under ticker code 'KCO'.
Kuro provides Atrum shareholders with an opportunity to freely participate in the development of Atrum's non-Groundhog metallurgical coal assets in a separate dedicated vehicle. Under the terms of the spin-out, Atrum shareholders will receive one free Kuro share for every four Atrum shares held at the Record Date (date to be advised).
To view diagrams, please visit:
http://media.abnnewswire.net/media/en/docs/ASX-ATU-674259.pdf
About Atrum Coal Limited
Atrum Coal Limited (ASX:ATU) is a metallurgical coal developer. The Company flagship asset is the 100%-owned Elan Hard Coking Coal Project in southern Alberta, Canada. Elan hosts large-scale, shallow, thick, hard coking coal (HCC) deposits with a current JORC Resource Estimate of 298 Mt (70 Mt Indicated and 228 Mt Inferred). Comprehensive quality testing of Elan South coal on samples from the 2018 exploration program, combined with review of substantial historical testwork data for the broader Elan Project, has confirmed Tier 1 HCC quality.
The initial focus for development is the Elan South area, which is located approximately 13 km from an existing rail line with significant excess capacity, providing direct rail access to export terminals in Vancouver and Prince Rupert. Elan South shares its southern boundary with Riversdale Resources Grassy Mountain Project, which is in the final permitting stage for a 4.5 Mtpa open-cut HCC operation. Around 30km to the west, Teck Resources operates five mines (the Elk Valley complex) producing approximately 25 Mtpa of premium HCC for the seaborne market.
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