Advances Operations at Groundhog North
Perth, Aug 4, 2014 AEST (ABN Newswire) - Atrum Coal NL ("Atrum" or the "Company") (
ASX:ATU) (ATRCF:OTCMKTS) is pleased to provide an operational update for the Company's flagship JORC 1.57 billion tonne Groundhog Anthracite Project ("Groundhog"), located in British Columbia, Canada.
VP Operations, Mr Ben Smith commented:
"The operational team has been flat-out at Groundhog preparing to deliver first anthracite on ship." "Ultra-high grade anthracite has been accessed readily from a surface extraction program and we have exposed a thick anthracite seam at the proposed mine portal."
EXPLORATION AT GROUNDHOG
Following completion of the Pre-Feasibility Study (PFS) within the North-West area of Groundhog, where initial production is expected to commence, the site activities has ramped up considerably with an intense drilling and extraction program.
Close spaced diamond core drilling continues at Groundhog along section lines perpendicular to the strike of the main structure of the S70 seam as part of the portal development and main development headings. The Company continues to map the extent of the sub-crop and enhance understanding of the mine portal. A total of 28 diamond cored drill holes have been completed to date for this purpose within the portal area.
The map (in link below) provides an overview of the location of the drill holes that have been completed as part of the recent drilling campaign as well as outlining the drill holes that are currently being drilled
The additional drilling is expected to be completed in the next six weeks with a large number of samples sent to the laboratory for proximate and ultimate analysis. This will add further anthracite quality data and help underpin the initial mine plan and marketing strategy. Approximately 450 anthracite seam samples, including roof and floor samples, have been collected for quality analysis.
These samples have being sent to ALS' laboratory for weight, ash and moisture determination on a ply-by-ply basis. The returned information is then added to strip logs as it is received, which enables the Company to systematically update the mine plan and the geological model.
Recent drilling data supports a structure which will allow the Company to expand a small scale shallow adit style underground mining operation within the portal area into a full scale mine.
Anthracite located in an S80 seam outcrop close to diamond drill hole DH14-06 has been extracted for customer samples and wash testing. Due to the homogenous nature of the Groundhog deposit, particularly in respect of 'coal rank', the S80 seam has comparable anthracite qualities to the S70 and S40 seam and provides an ideal source of Groundhog anthracite for customer testing. The S80 seam measured 4.7m at 3.3m depth. This represents potential upside for the PFS mine - Groundhog North.
The S70 seam has been encountered at depths ranging from 14m to 101m below surface with a net anthracite thickness ranging from 1.0m to 6.4m and averaging approximately 2.5m. Recent drilling has identified a new opportunity in the S60 seam which has been encountered in several drill holes of significant thickness within the PFS and mine portal area, positioned between 30m and 50m below the S70 seam. The S60 seam ranges in drilled thickness from 0.4m to 6.4m and averages 2.5m of net anthracite.
The Company is reviewing the potential inclusion of the S60 seam as part of an expanded anthracite mining inventory in the PFS revision to allow for increased throughput during the initial phases of the Groundhog mine and ultimately amplified economics. The S40 seam has been encountered at depths between 195m and 276m below surface with net anthracite thicknesses as high as 11.0m. Drilling and anthracite quality testing continues to support the PFS mine plan.
A regional drilling program is also currently underway at the Groundhog project designed to expand the global resources within the project area and delineate the extent of additional anthracite resources on untested regional targets, south and east of the current global anthracite resource, consistent with Atrum's view that Groundhog represents a regional opportunity, capable of multi mine development.
A WORLD CLASS MULTI MINE VISION
Atrum has long term plans to groom Groundhog to be a world class multi mine supplier of high grade and ultra-high grade anthracite products to the steel and specialty industries. To support this vision drilling continues in regional untested areas where there is potential for major resource expansion.
The map in link below outlines additional regional drilling locations which are currently underway. To date, the Company has drilled four of the regional drill holes with significant anthracite intersected.
PFS OPTIMISATION
The PFS is in the final stages of optimisation which will take into account additional anthracite inventory, extension to the mine plan geographically and incorporation of additional anthracite seams that have been encountered in significant thickness within the North-West area of Groundhog as a result of recent drilling.
The initial PFS completed for the first stage of production at Groundhog was based on the underground mining of the S70 and S40 anthracite seams in the North-West area of Groundhog. This area represented less than 5% of the total aerial extent of the project and considered only 2 out of 20 potentially mineable anthracite seams. The initial PFS demonstrated significant economic returns generating a pre-tax NPV8 of $2.1 billion based on a pre-tax IRR of 68%.
Since release of the PFS, an extensive summer exploration program has been carried out to increase confidence to the initial mining areas of Groundhog North. In the process, additional seams of thicknesses favourable to mining have been identified - namely the S60 and S80 seam. The S80 seam sits close to surface while the S60 is located between the S70 and S40. Mine planning and economic evaluation of these additional anthracite measures is currently underway, with an augmented PFS to be released in due course.
The PFS optimisation is close to completion and addresses mine site engineering, mine planning, surface infrastructure and logistics options. The Company will release a summary of the PFS revision including CAPEX, OPEX and economic modelling during Q4 of 2014.
ADVANCED SITE WORKS AT GROUNDHOG
The Company recently mobilised heavy equipment to the staging platform in the North-West area at Groundhog, including an articulated dump truck, an excavator and a dozer. This equipment is being used to complete various site preparation activities as part of the portal and pre-production exploration program.
Site preparation commenced at Groundhog during mid-July 2014 with the initial centre line cleared to allow movement of the heavy equipment. The Company has begun extracting anthracite for test purposes including customer samples.
Extraction has been taken from a 1.5m wide trench consistent with the Company's low impact approach.
The vitrinite content of the anthracite gives the material its high lustre appearance and the welldeveloped cleats in the sample indicate the potential of the anthracite to retain strength supporting an ultra-high grade lump anthracite product for the steel and speciality metals industries.
As part of the Company's transition from explorer to developer, the Company has also updated its health and safety policies to reflect the direction of the Company and to outline the objectives and standards that are being set. This is being spear-headed by the VP Operations, Mr Ben Smith.
The Company looks forward to providing further operational updates at Groundhog as drilling continues.
To view figures, please visit:
http://media.abnnewswire.net/media/en/docs/ASX-ATU-686729.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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