A pre-feasibility study (PFS) on Project F at Tigers Realm Coal’s Amaam North project in Russia’s far east has demonstrated outstanding project economics from a core starter open pit coking coal mine with a shortened timeframe to first production.
Project F will annually produce more than 1 million tonnes of primarily coking coal product from a low strip ratio (5:1) open pit over an initial 11 year mine life. It has the potential to become one of the lowest operating cost, export coking coal mines in the world with an average FOB cash cost of US$75 per tonne of saleable product. The capital cost to initial production is estimated at US$52 million.
The open pit project comprises three main components:
- The mine site comprising an open pit mine, coal handling and processing plant (CHPP), and associated infrastructure (buildings, workshops and warehouses, worker accommodation and offices, electrical generation and distribution facilities, overburden/waste rock stockpiles, water and waste management facilities, etc).
- The coal transport chain comprising a 35km winter road from the mine site to the Beringovsky port for coal transport and mine site supplies, and a service road for personnel and supplies transport during the summer period.
- The coal terminal comprising the construction of port area coal stockpiles, and an upgrade to the existing transhipment facilities at the Beringovsky Port.
The PFS confirms strong project economics. Using a coking coal price of US$150/tonne and a 10% real discount rate, the project has an after-tax net present value of US$177 million and an internal rate of return (IRR) of 37%. Payback is less than 2 years.
The bankable feasibility study (BFS) continues and Tigers Realm is funded for this work. The BFS will be completed by quarter one of 2014 as scheduled. The company has received strong interest in funding Project F.
Ongoing work programs will assess options to further enhance project value. These include expanding the open pit resources through further drilling on the largely unexplored Amaam North licence, assessing the potential for underground mining of the thick seams below the Project F open pit and optimizing PFS outcomes.
Tigers Realm’s plans for becoming a large-scale and leading coking producer from Amaam and Amaam North are further strengthened by the strong economics of Project F. Project F is set to become the core starter mine which will then support the expansion of production from the main 6 million tonne/annum Amaam project and Amaam North.
Amaam North is in Chukotka province in far eastern Russia, about 30km southwest of the existing coal mining operations at Nagornaya and its supporting port and township of Beringovsky. Deposit F represents a very small portion of the Amaam North licence where initial exploration has identified coal seams of the Lower Chukchi formation that allow for development of a relatively simple open pit mine operation with very low strip ratios and a consequent low capital requirement.