Name and Location
Crown Mountain coal project, British Columbia, Canada.

Client
Jameson Resources.

Project Description
The Crown Mountain coal project has a measured, indicated and inferred resources of 98.6-million tonnes, and total proven and probable reserves of 55.83-million tonnes.

Jameson has reported that the prefeasibility study (PFS) on its Crown Mountain project will have outstanding economics and be technically robust.

The mining method selected for Crown Mountain in the PFS is openpit. Mining equipment includes excavators, front-end loaders and haul trucks, supported by dozers, backhoes and blasthole drills. It is expected that the vast majority of overburden removal will require blasting.

The mine plan has been sequenced to extract the low strip ratio North block first, followed by the smaller East block (a subset of the South block, but a distinctly higher-quality and discrete mine pit) and, ultimately, the large South block.

Mined run-of-mine coal will be hauled from the pit to a derocking device (rotary breaker or equivalent) where some of the larger size out-of-seam dilution will be removed. A wash plant will be located close to the mine site.

The primary processing method used will be heavy-media cyclone and reflux classifier, supplemented by column cell flotation for fines recovery, with a thermal drier included in plant design.

Washed coal will be conveyed 3 km down the mountain and then trucked for about 9 km to a stockpile/load-out area, where the product will be loaded by a 16 000 t capacity silo onto railcars on a new rail loop to be located adjacent to Canadian Pacific’s existing common-user railway. The load-out facility includes silo storage, with a batch weigh bulk loading system for accurate load control and freight cost management.

Early mine life production will peak at two-million clean tonnes a year, levelling off at 1.7-million tonne-a-year average over the project’s 16-year mine life.

Net Present Value/Internal Rate of Return
The project has an estimated pretax net present value of $369-million and a pretax internal rate of return of 33% on base case start-up capital of $339.7-million. The payback period (after tax) is 2.7 years.

Value
Start-up capital expenditure to support the mining and processing operation has been estimated at $339.7-million.

Duration
After prestripping, North block coal will be mined in late 2017. To allow for desired yearly production, multiple pits will be operated, with the East block pit beginning concurrent production in 2018.

Yearly production, after accelerating in 2018, will reach just over two-million clean tonnes a year in 2019 and 2020, followed by a gradual decline as the lower recovery South block is mined. The yearly production will average 1.7-million clean tonnes a year until the final partial year of operation.

Latest Developments
The PFS examined that Jameson is building and operating the project as a company-owned standalone entity. According to the PFS, this represents a worst case with respect to capital.

Additionally, the South block reserve is mined immediately after the North and East reserves, ignoring the potential value of the project’s Southern extension. As a result, over the next few months, Jameson will evaluate several value-enhancing alternatives including:
• the development of a cost estimate for using contract mining;
• the examination of alternative production levels to test their effect on overall project economics;
• the evaluation of a mining strategy based on optimising coal quality;
• the evaluation of emerging technologies as potential replacements for using a traditional thermal drier in the plant;
• the examination of the Southern extension in greater detail to determine the viability of mining the deposit immediately after the North and East blocks;
• the evaluation of synergies between Crown Mountain and other regional projects; and
• the initiation of a feasibility gap analysis in the next few months to identify outstanding data collection requirements for a bankable feasibility study (BFS). The results of that evaluation will determine the scope of any 2015 fieldwork required to support the BFS.

Concurrently, Jameson intends to continue fast-tracking the environmental assessment process to have the project ready to enter the construction phase once market conditions improve.

Key Contracts and Suppliers
Norwest Corporation (management of PFS).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Jameson Resources, tel +1 604 629 8605, fax +1 604 629 7526.
Norwest Corporation, tel +1 604 602 8992, fax +1 604 602 8951 or email vancouver@norwestcorp.com.