PERTH (miningweekly.com) – Coal hopeful Aspire Mining has revised the mine plan for its Ovoot coking coal project, in Mongolia, in an effort to drive down costs.

A 2012 prefeasibility study on the Ovoot project had considered the staged development of the project, with the Stage 1 operation delivering six-million tonnes a year by 2016, and ramping up to eight-million tonnes a year from 2018.

The Stage 1 capital requirement was estimated at $459-million, along with a $264-million contingent for the mining fleet.

However, Aspire said on Tuesday that the new mine plan had reduced the capital expenditure at Ovoot to $144-million, and changed the model from an owner-operator model to using contractors to supply mining, camp, aviation and communication services.

Initial production has also decreased to five-million tonnes a year, with later production increases to be funded from internal cash flow. The five-million-tonne-a-year operation would start in 2017, to coincide with the commissioning of a railway from Erdenet to the Ovoot project.

Aspire told shareholders that the development of the project would take around 12 months.

The company noted that it was in the midst of sourcing funding for the revised mine plan at Ovoot and had, thus far, received nonbinding letters of intent from Deutsche Bank and BHF Bank to provide $40-million and $50-million respectively, in loans.

The Noble Group had also expressed its willingness to provide a range of initiatives to support the development of Ovoot and the port and rail options for the project. One of these initiatives was a working capital facility of some $20-million to support an initial mining operation.

A further $60-million could also be secured from two large international mining contractors for a five-year, 368-million tonne waste and coal mining contract. Additional funding would also be sourced from potential coal customers, Aspire said.

The new mine plan has the start of construction slated for the December 2015 quarter, with first production scheduled for 2017.