Name of the Project
Telkwa metallurgical coal project.

Location
North-west British Columbia, Canada.

Client
Allegiance Coal.

Project Description
The project has a proven and probable coal reserve estimate of 62.9-million tonnes for a mine life of 28 years.

A prefeasibility study (PFS) completed on the project envisages the staged development of a shallow openpit operation.

Stage 1 will comprise the production of 250 000 t/y of saleable coal, ramping up to 1.75-million tonnes a year over four years in Stage 2.

Coal production will start in the Tenas pit, which represents 50% of saleable coal, and the first 14 years of mining. The pit is a syncline basin of coal, with the west limb shallow-dipping. The PFS has proposed a mining strategy involving a series of cuts initiated at the lowest point in the north of the pit, progressing uphill to the south.

Start-up primary production equipment will also be very simple, comprising one 5º drill rig for blasting, one 100 t excavator, four 50 t dump trucks, two D8 bulldozers (or equivalent) and one front-end loader.

The rail siding is an estimated 800 m long, running parallel to the CN Rail track. Coal is dropped on a coal pad, from which a front-end loader will pick up the coal and load it onto 110 t coal wagons.

Stage 2, which will be progressively mined from Tenas to Goathorn, and then Telkwa North, will involve a more substantial investment in mining equipment and infrastructure, including a designated private clean coal haul road, and a significantly upgraded rail spur and loading system.

The wash plant is proposed to be modular, which will allow for its relocation.

A standalone Sedgman-manufactured 190 t/h modular wash plant, with the capacity to process up to 1.4-million tonnes a year of raw coal and up to one-million tonnes a year of Telkwa coal, has been selected. A third circuit could be added to the plant, with minimal additional capital, to reach 350 t/h, capable of pro-cessing 2.5-million tonnes a year of raw coal and 1.75-million tonnes a year of Telkwa coal.

The wash plant will be configured with dense-media cyclones and flotation during Stage 1, and expanded by the introduction of a reflux classifier to meet the increased production requirements in Stage 2.

Washed coal will be stockpiled at the wash plant and then trucked to the rail siding.

Jobs to Be Created
All operations personnel, totalling 35, and trade technicians will be sourced locally from the towns of Telkwa, Smithers (12 km) and Houston (50 km), which have a skilled workforce with extensive experience in forestry and hard-rock mining.

Net Present Value/Internal Rate of Return
The PFS estimates a pretax net present value, at a 10% discount rate, of $416-million and an internal rate of return of 37%, with a payback from the start of Stage 2 of 1.8 years.

Value
Initial capital for Stage 1 is estimated at $51.2-million, while Stage 2 has been estimated at $161.6-million.
The capital investment in both stages could be reduced with a manufacturer-funded and -operated wash plant, and either contract mining or equipment leasing.

Duration
Not stated.

Latest Developments
Allegiance plans to fast-track the project to production, with two immediate areas of focus being a review of the PFS and assessing the level of ramp-up production that achieves the best return on capital. This is expected to be completed in the first quarter of 2018.
The company is also planning a PFS focusing on only Stage 1 development as a standalone operation to support an application for a subenvironmental assessment permitting process for completion in the first quarter of 2018.

Key Contracts and Suppliers
SRK Consulting (PFS).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Allegiance Coal, tel +61 2 9233 5579, fax +61 2 9233 1349 or email info@allegiancecoal.com.au.