Gobi Coal & Energy is acquiring Zaraiya Holdings, which owns an advanced in-situ leach uranium project in Mongolia. The acquisition is expected to be completed later this month and demonstrates Gobi Coal’s progress towards becoming a diversified multi-national energy resources company focused on high value projects.

As part of this strategy, Gobi Coal plans to rename itself Zaraiya Energy Resources Ltd and is moving forward with a public listing along with an associated capital raise of up to US$10 million.

The combined company benefits from nearly US$200 million of investment in three high-grade metallurgical coal mines in Mongolia containing 318 million tonnes of JORC resources and the advanced in-situ leach uranium project having at least 20 million pounds of existing resource potential and up to 50 million pounds of resource potential following planned land acquisitions which are currently under discussion.

The primary metallurgical coal mine, Shinejinst, in southwest Mongolia is pre-stripped and production ready with peak production potential of more than 6 million tonnes per annum of semi-soft and hard coking coal and coal seams as wide as 44 metres. Shinejinst contains approximately 95 million tonnes of JORC reserves and 225 million tonnes of JORC resources

Gobi Coal preserved its metallurgical coal mines through downturn and is now well placed to take advantage of the recent sharp recovery in metallurgical coal prices. The economic value of the Gobi Coal mines has returned to near peak levels which has allowed the company to progress plans for development of a railway from Shinejinst to the China border with a view to reaching full metallurgical coal production as soon as 2019.

At the same time, the long-term potential for uranium has strengthened significantly. China has a reported 30 reactors in operation, 24 new reactors under construction, 40 reactors planned, and 136 reactors proposed, together which will result in a three-fold increase in its nuclear capacity by 2020-21. Reactors in operation worldwide today are already consuming in excess of 10,000 tonnes of uranium per year more than current global mine production capacity. This supply-demand imbalance is expected to grow sharply as numerous new reactors enter operation.

Gobi Coal chairman Mo Munshi said, “The combination of our developed high grade coking coal mines and the in-situ leach uranium deposits next to AREVA in Mongolia positions our company to be a newly diversified energy resources company.

“Going forward, we are aiming to consolidate and develop high grade coking coal mines along our railway corridor in Mongolia as well as expand our uranium portfolio both inside and outside of Mongolia.”

www.gobicoal.com

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