Name of the Project
Ovoot early development project (OEDP).

Location
The project is located in northern Mongolia.

Project Owner/s
Aspire Mining.

Project Description
The robust financial results from the OEDP prefeasibility study (PFS) have confirmed a compelling strategy to unlock the 100%-owned Ovoot coking coal project.

The project has a Joint Ore Reserves Committee-compliant reserve of 225-million tonnes of coal. The base case focuses on a scenario using a 36.8-million carve out from the Ovoot project reserves. It proposes the development of a steady-state, four-million-tonne-a-year operation over an initial mine life of 9.2 years, supported by a special purpose haul road, which will connect to the existing Mongolian rail network to China and other key end-markets.

The washed coal will be delivered using a 560 km special purpose haul road that will be built to connect to a rail head at Erdenet. The coal will then be delivered on the Mongolian rail network that has confirmed available capacity for the OEDP coal through to the Mongolian/China border crossing of Erlian to Chinese end-customers.

A further cutback of the OEDP, should Aspire choose, will increase the mine’s life at 4.5-million tonnes a year to 12.5 years and is based on an ore reserve of 53.8-million run-of-mine tonnes.

The PFS envisages mining being conducted by a contractor using traditional truck-and-shovel methods.

The final design includes a heavy-media cyclone, chosen owing to its lower water and power consumption, and processing complexity. A flotation process will be required to maximise fines recovery.

Potential Job Creation
None stated.

Net Present Value/Internal Rate of Return
The OEDP PFS base case has an unleveraged pretax net present value (NPV), at a 10% discount rate, of $586-million and an internal rate of return (IRR) of 43.7%. The OEDP extended case has an unleveraged pretax NPV, at a 10% discount rate, of $758-million and an IRR of 44.5%.

Both options have a payback of 24 months.

Capital Expenditure
Construction of the mine will require a capital investment of $110-million and the construction of the haul road $165-million.

Planned Start/End Date
Aspire is targeting the start of road construc­tion in the fourth quarter of 2019, commissioning from the first quarter of 2021 and first coal production in the second quarter of 2021.

Latest Developments
The OEDP definitive feasibility study (DFS) is under way.

The significant amount of work already undertaken by Aspire and FMS, as the lead PFS consultants, and GT Global, as the wash plant experts, provides an excellent foundation to pursue several parallel workstreams to fast track the completion of the project by the third quarter of 2019.

The OEDP critical path is the Ovoot to Erdenet road construction. The haul road has a 15-month construction timeframe once all permits are in place and funding is secured. Aspire is targeting to secure funding and permits by the third quarter of 2019 to allow for the haul road to start immediately thereafter.

On this basis, Aspire is targeting haul road completion by the March quarter 2021.

All other activities, including the coal handling and preparation plant, mine construction and waste prestripping activities, will be managed and coordinated to ensure that meaningful production of washed coal coincides with the haul road completion.

While the DFS is ongoing, Aspire will look at strategies for starting coal production in 2020.

Meanwhile, a draft feasibility study on the Erdenet to Ovoot Railway project has been delivered to Aspire rail subsidiary, Northern Railways (NR). NR will review the study and provide feedback before finalisation. The study, however, has confirmed the financial viability of the proposed railway.

Key Contracts and Suppliers
FMS (lead PFS consultants) and GT Global (wash plant experts).

On Budget and on Time?
Too early to state.

Contact Details for Project Information
Aspire Mining, tel +61 8 9287 4555 or email info@aspiremininglimited.com.