Supplementary PFS at Groundhog North Delivers $1.7Bn NPV
Perth, Oct 20, 2014 AEST (ABN Newswire) - Atrum Coal NL (
ASX:ATU) (ATRCF:OTCMKTS) ("Atrum" or the "Company") is pleased to announce the results of its optimisation of the Groundhog North underground mine Pre-Feasibility study. New developments at Atrum's Groundhog Anthracite Project including acquisition of additional leases, additional drilling and coal quality test work, has led to an increase in JORC Resources, which has in turn facilitated improvements in project economics due to optimisation of the mine plan combined with refinement of road, rail and port infrastructure plans.
Groundhog North covers less than 5% of Atrum's broader Groundhog Anthracite Project in British Columbia, Canada which hosts a JORC Resource of 1.57 billion tonnes.
The SPFS was independently prepared by Valzan Pty Ltd (Valzan), with inputs on pricing from Wood Mackenzie, modelling assistance from Deloitte Touche Tohmatsu and independent cost inputs from industry participants in relation to port, power and road CAPEX.
WHAT HAS CHANGED?
Significant improvements to project metrics are largely attributed to the following:
- Total anthracite resource, mineable resource, and mine life have increased following optimised mine planning facilitated by additional drilling carried out this year, combined with an increase in the Groundhog North boundaries resulting from the acquisition of adjacent coal licences from Anglo Pacific Group PLC (August 2014);
- Operating costs have reduced on an 'owner operator' basis due to the identification of operational efficiencies;
- Capital costs have reduced across all facets of the operation. Mining fleet costs increased due to the decision favour an 'owner operator' model and employ and train locally. Surface infrastructure costs have reduced as expensive overland conveyors have been eliminated from the logistics chain. Road construction estimates have reduced due to broader tendering. CHPP has been redesigned as a modular arrangement, allowing staged capital expenditure; and
- Port capital costs have reduced due to a simpler stockpile management and storage design utilising much of the existing infrastructure at the port rather than new infrastructure as was modelled previously.
Further details of the SPFS are highlighted in the Company's power point presentation titled "Groundhog North Underground; Supplementary Feasibility Study"
The Company had $10.3m cash at bank as of June 30, 2014 and currently has a fully diluted share structure of 176.3 million with a fully diluted market capitalisation of $254 million at $1.44.
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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