The pre-feasibility study (PFS) review for Aspire Mining’s Ovoot project in northern Mongolia has confirmed it has robust economics for a large, long-life coking coal operation.
The net present value (NPV) of the mine has been estimated at US$1.7 billion, with a recently announced 23% increase to 219 million tonnes in probable reserves making it the second largest coking coal deposit in Mongolia.
Aspire’s managing director David Paull says, “The PFS revision has demonstrated that the Ovoot project is one of the lowest cost potential sources of coal into China which is the world’s largest consumer of coking coal and coke. The company is now well positioned to commence commercialization negotiations to advance funding and project development.”
Ovoot is about 160km west of the Khuvsgal provincial capital of Moron which lies about 400km west of the nearest rail port at Erdenet.
The PFS is based on a large-scale open-pit mining operation, with annual production capacity of up to 14 million tonnes as well as a small underground mine producing up to 750,000 tonnes of raw coal over the next two decades. Revision of the PFS has now included up to 8 million tonnes mined underground over an 11 year period.
Aspire says the initial capital investment to establish a coal handling plant, wash plant, mobile fleet, waste pre-stripping, haulage road and other infrastructure will be US$723 million to achieve the first 6 million tonnes per annum of saleable coal. A further US$482 is required to increase annual mine capacity up to 14 million tonnes.
“We have established a Mongolian-listed special purpose company, Northern Railways, to licence, fund and construct a 581km rail line extending the Trans-Mongolian railway at Erdenet, through to the Ovoot project,” says David Paull. A PFS for the railway was approved by the Mongolian Rail Authority in March 2012. It is anticipated investors in the railway will fund the first stage of development of Ovoot.