PFS confirms Mecsek Hills profitability

28th March 2012 By: Esmarie Iannucci - Creamer Media Senior Deputy Editor: Australasia

PERTH (miningweekly.com) - A prefeasibility study of ASX- and Aim-listed Wildhorse Energy’s Mecsek Hills underground coal gasification (UCG) project, in Hungary, has confirmed the project’s technical and economic potential.

The study was for a 400 MWt project consisting of two distinct phases; a commercial demonstration phase followed by a large-scale commercial phase.

Phase 1 of the project would be designed to have a capacity of some 130 MWt of syngas, which would be used to supply a combined cycle gas turbine power plant. Both facilities were expected to be operational by the fourth quarter of 2014.

The second phase of the Mecsek Hills project would see the development of a large-scale commercial plant designed at a capacity of some 280 MWt of syngas, with a UGC facility to supply syngas to a potential 130 MW power plant.

The development of the second phase of the project would only be undertaken after the commissioning of Phase 1.

Meanwhile, the prefeasibility study of the Mecsek Hills project has also provided an updated Joint Ore Reserves Committee-compliant inferred coal resource of 383-million tons.

Wildhorse MD Matt Swinney said on Wednesday that the resource update demonstrated that the company had sufficient coal to construct a 400 MWt UCG project, but more importantly, the company had also identified a number of UCG suitable coal seams which it would focus on further over the coming months.

“This is a landmark development in the advancement of UCG applications in Central and Eastern Europe against the backdrop of the extremely positive pricing environment for energy production in the region, due to the historic reliance on gas imports.”

Swinney said that the prefeasibility study confirmed Wildhorse’s position as a first mover in the regional alternative energy sector and provided the company with further access and leverage in the sector.

“The successful findings of the prefeasibility study supports the company’s roll-out strategy to develop further projects in selected markets in Central and Eastern Europe, and enhance the value of our wider portfolio and expansion strategy.”

He noted that the company’s focus was to develop the flagship Mecsek Hills UCG project to the bankable feasibility stage and towards the commissioning of syngas, while rapidly developing its wider portfolio of stranded coal assets in order to become a leading provider of fuel in the region.