Receives Encouraging Yield Results
Sydney, Feb 29, 2016 AEST (ABN Newswire) - Atrum Coal NL ("Atrum" or the "Company") (
ASX:ATU) (ATRCF:OTCMKTS) is pleased to provide the first update from the Company's flagship JORC 1.57 billion tonne Groundhog Anthracite Project ("Groundhog"), located in British Columbia, Canada for 2016. This announcement is an update to the ASX announcement made by the Company on 14 August 2015: "Atrum Coal Increases Groundhog North Resource".
The Company has received very encouraging anthracite quality results from drilling at Groundhog's Eastern Resource block. The Duke E seam, one of the primary target seams for the underground mines designed in the Groundhog North Mining Complex, has returned yields averaging above 80%, producing a premium 10% ash ultra-high grade anthracite. The Company's previous economic analysis has been based on Duke E yields of 60% for the 10% ash product. An increase in yield will have a positive impact on the economics of the project, which will be reflected in the Groundhog's Pre-Feasibility Study.
Robert Bell, Executive Chairman, commented: "As we gain a greater understanding of the Groundhog resource base, we increase the likelihood of designing mines with both reduced operating and capital costs.
"The delineation of the Duke E seam in the Eastern Resource block with much higher washing yields is an encouraging result, and is likely to strongly influence our mine planning and development scenarios.
"Taking the average yield of the Duke E from 60%, to above 80% could result in a significant reduction in the total cost of production as ROM coal volumes are significantly reduced to produce the same volume of premium product. Furthermore, the Duke E in the Eastern Resource block is shallowly emplaced, with average depths less than 150m, and it is consistently >2m thick - an ideal mining height underground.
"Moving the yield from 60% to 80% has potential to reduce the ex-mine cost by 20% - 25%, and the FOB cash cost by 10% - 15% for our primary export product, a low ash, ultra-high grade anthracite which is in short supply on global markets."
Encouraging yield results
Exploration activities in 2015 focussed on consolidating knowledge of the two key economic targets. Discovery B seam and the lower, Duke E seam within Groundhog North Mining Complex. Recently the Company has received significantly improved float sink yields for the Duke E seam (yields averaging >80%, compared to previous average yields of 60%), have stimulated a further design of pits in the Eastern Block where these higher yields occur.
Hole ID Seam Depth Thickness Raw Yield Product Ash (roof) Ash (F1.80) (F1.80)14-31 Duke E 186m 2.17m 17.4% 84% 9.1% 14-33 Duke E 109m 2.32m 20.7% 78% 10.0%14-35 Duke E 78m 2.08m 17.0% 88% 9.6%
Table 1. Anthracite Quality from Eastern Mining Domain
Recent field mapping led to the discovery of additional outcropping anthracite (see below). Geological interpretation, sampling and coinciding quality results validated the outcrop as the Duke E seam.
The Company is currently re-working a Pre-Feasibility study ("PFS") which includes underground mines in the Discovery B and Duke E horizons, and low-cost highwall options in the Discovery B seam. The improved float sink yields are being investigated, and the coal quality database divided into zones of geological influence, termed the Eastern Resource block, and the Western Resource block. The quality results have been sent to third party consultants to undertake washplant simulations to predict primary and secondary yields from the designed washery.
Should these simulations return expected results of primary yields for the Duke E seam of between 75% and 80%, it has the potential to reduce the overall cost of production from the Duke E seam by 10%-15%. Furthermore, these yields come from the Duke E seam at average depths of under 150m, which has the potential to significantly reduce the capital cost to access the Duke E seam underground. The Company has identified two suitable entries accessing the seam at depths of ~40m, significantly shallower than previously planned.
Coal Resource Upgrade
Table 2 illustrates the depth cut-off of Coal Resources in the new domain as at 13 August 2015.
Table 2: New Mining Domain Resource Summary
JORC Resource Breakdown by Depth (Mt) - current 13 August 2015
Measured Indicated Inferred Total (Mt) (Mt) (Mt) (Mt)<100m 0 64.9 24.9 89.8>100m 0 194.82 122.49 317.31Total 0 259.72 147.39 407.11
To view figures, please visit:
http://media.abnnewswire.net/media/en/docs/ASX-ATU-754472.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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