PERTH (miningweekly.com) – A prefeasibility study (PFS) into coal hopeful Atrum Coal’s Groundhog anthracite project, in British Columbia, has revealed that the project would have a net present value of about A$2.1-billion.
The underground operation was expected to deliver 5.4-milion tonnes a year run-of-mine (RoM) coal over a 16-year mine life, and would require a capital investment of $10-million in 2014, and a further $67.1-million in 2015.
“The results speak for themselves. Groundhog is a world-class asset and we are merely scratching the surface of its potential,” said Atrum MD Eric Lilford.
Lilford pointed out that the PFS covered less than 5% of the Groundhog area and accounted for only two of the more than 20 anthracite seams. Using bord and pillar roadway development, an initial 87.4-million tonnes RoM anthracite had been defined, with some 75-million modelled for extraction.
Groundhog currently hosted a global Joint Ore Reserves Committee-compliant resource of 1.57-billion tonnes.
Lilford said on Tuesday that commercial mine development at Groundhog would be funded through strategic offtake financing and debt.
Meanwhile, the coal developer was considering the spin-out of an infrastructure unit, dubbed Atrum Infrastructure and Logistics (ATIL), which would fund the construction of roadways for the Groundhog project.
ATIL would also seek secondary customers to charge for the use of the road, which would double as a potential easement for the power line extension, and if required, add a new dedicated railway line once production at Groundhog exceeded truckable volumes.
Lilford added that ATIL provided Atrum with a means to avoid shareholder dilution by quarantining infrastructure capital expenditure and financing it in an external structure, while allowing Atrum to focus on core activities such as mining, processing, marketing and selling anthracite.