Major Coal Intersections at Elan Coking Coal Project
Perth, Dec 11, 2014 AEST (ABN Newswire) - Wholly-owned Atrum Coal NL (
ASX:ATU) (ATRCF:OTCMKTS) ("Atrum") subsidiary Kuro Coal Limited ("Kuro" or the "Company") is pleased to announce it has completed its first phase exploration program at the Elan Coking Coal Project ("Elan") located in Alberta, Canada. Pursuant to the joint venture agreement executed in October 2014, the Company has the right to earn up to a 70% interest in the Elan project subject to the meeting of certain milestones including completion of a scoping study, pre-feasibility study and bankable feasibility study.
Completion of Drilling at Elan Coking Coal Project
Drilling at Elan commenced in late October and continued for approximately three weeks. Seven drill holes, four diamond core and three rotary, together with seven trench sites where designed to test coal quality and increase the current JORC resource at Elan. All drill holes were geophysically logged.
The exploration program focused on the "Grassy North" and "Wildcat" targets within the broader Elan project area, which is part of the Livingstone Trend. This area accounted for much of the Exploration Target on the project and extends for approximately 10 km northward along strike and is in close proximity to existing rail infrastructure.
Initial exploration results are outstanding with very thick and shallow coal intersections encountered including:
- Net coal thickness of 20.8m between 54.6m and 82.3m (GNDH-14-02)
- Net coal thickness of 14.3m between 18.3m and 34.4m (GNDH-14-05)
- Net coal thickness of 12.2m between 77.9m and 94.6m (GNDH-14-04)
- Net coal thickness of 10.0m between 55.6m and 67.8m (GNDH-14-07)
- Net coal thickness of 9.6m between 28.9m and 46.8m (GNDH-14-06)
- Net coal thickness of 8.2m between 64.5m and 77.2m (GNDH-14-01)
- Net coal thickness of 5.2m between 23.0m and 29.3m (GNDH-14-03)
Refer to Appendix A for a full table of the drill results.
The 2014 drill results have exceeded expectations and the Company anticipates a significant increase in JORC coal resources at Elan following coal quality testing and resource modelling. As such, Atrum has elected to retain Kuro in-house for the time-being, in order to add more value for Atrum shareholders prior to the planned spin-out.
Historical coal quality results indicate the presence of a mid-volatile coking coal in the drill target area, consistent with coking coals from the region. Coal quality testing has commenced on the 2014 drill samples with results expected in Q1 2015.
The Company is applying to expand drill permits at Elan which will allow further drilling and trenching during the 2015 season.
Elan Location
Elan is located in the foothills and front ranges of the Rocky Mountains of Alberta, approximately 30km north of Coleman in Alberta. Historic work has divided the property into the Savanna Creek, Isola Peak, Isolation Ridge, Isolation South, Wildcat and Grassy North areas.
It comprises of 27 Alberta Crown Coal Lease applications covering an area of approximately 22,951 hectares, and provides the right to explore the land within the boundaries of the lease applications.
The majority of the project can be accessed via paved highways as well as a system of limited-use roads and access trails.
Elan extends for 55km northward from Crowsnest Pass along strike in the Kootenay Group coal formation. Five different areas of interest with surface mineable potential have been identified from historic exploration work carried out by companies including CONSOL, Devon Canada, Granby Mining, CanPac Minerals, and Canadian Hunter dating back to the 1940's. More than 10 coal seams have been identified at Elan with historical thicknesses ranging from 3m to 10m. Elan can be accessed by driving north from Crowsnest Pass on secondary roads. The property is close to rail which leads to two export ports with spare capacity.
Upgrading ground access in and around the project area will allow the Company to undertake exploration with ground based drill rigs with minimal reliance on air support. Ground access upgrades are being planned for the 2015 drilling season.
Based on historical results, coal rank is expected to be low to medium volatile bituminous with variable but generally moderate ash content, good washability, and good coking properties.
Coal Resources
The Property hosts a JORC compliant Indicated and Inferred Resource (in accordance with 2012 JORC guidelines) of 146.5Mt. The table below details the JORC Indicated and Inferred Resource as well as indicative clean coal quality:
In addition to the current JORC Resources, Elan hosts an Exploration Target of between 735Mt and 755Mt of low to medium volatile bituminous coal. This Exploration Target (under section 17 of the JORC Guidelines 2012) is based on drilling completed by previous explorers together with historical trenching, adits, mapping and sampling of coal outcrops across the project area.
The Exploration Target quantity and quality is conceptual in nature. There has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in the Exploration Target being delineated as a mineral resource. The Exploration Target was calculated in August 2014 by Dahrouge Geological Consulting Ltd under the 2012 JORC Guidelines.
Refer to ASX announcement dated 3 September 2014 titled "Kuro Coal Acquires Major Coking Coal Project" in conjunction with ASX announcement dated 26 September 2014 titled "Kuro Coal Clarification Announcement - Elan Project".
Project Infrastructure
The southern part of Elan is highway accessible by driving approximately 20 km north from Coleman via Kananaskis Highway. The northern part of the property can be accessed 42 km north of Coleman, via the Kananaskis Highway and the Oldman River Route. These routes provide maintained access to the limited-use road network that reaches the Isolation South, Isolation, and Savanna areas. Transport to and from the property is by 4x4 truck and ATV.
A secondary Canadian Pacific rail line runs through Coleman and connects with the main CNR east-west line for access to Vancouver and Prince Rupert ports or as far as the Great Lakes eastwardly. The nearest municipal airport is located in Pincher Creek, Alberta, approximately 50 km east of Coleman along Highway 3 (Crowsnest Hwy) and the nearest major international airport is located in Calgary approximately 220km to the northeast.
Accommodation, food, fuel and other necessary services are available in Coleman and Blairmore, Alberta, which are located 10 to 60 km south of the property. Coleman and Blairmore have a combined population of approximately 4,000. The local economy is primarily based on tourism, forestry, and coal-mining. Several coal mines, including Teck Coal and Coal Mountain mines, are currently in operation in the area.
IPO Timetable
The proposed ASX listing of Kuro Coal Limited through an initial public offering has been postponed following outstanding results from the maiden exploration program at Elan. Atrum believes that building more value in Kuro through advancing Elan prior to a spin-out will maximise value for shareholders.
To view tables and figures, please visit:
http://media.abnnewswire.net/media/en/docs/ASX-ATU-703681.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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