An independent conceptual mining study has confirmed the potential for near-term development of the Nuurstei Coking Coal Project in northern Mongolia. The study for the Ekhgoviin Chuluu Joint Venture (ECJV), which is owned by Aspire Mining and Noble Group, was completed by specialist coal engineers, Bluefield Advisory.
Bluefield Advisory was commissioned to undertake the study to evaluate the viability and cost of an open cut mining operation for the Nuurstei deposit. The aim was to assess the economics for a conceptual open cut pit that would enable a significant portion of the indicated resource to be mined.
Once the results of the proposed 2017 drilling and sampling program are included in a revised resource model the mine plan will need to be updated. The exploration program is budgeted at US$1.5 million.
The pit depth has been limited to 150 metres and does not include near surface inferred resources in an area to the west. Infill and extension drilling is anticipated to convert inferred to indicated resources in the western part of the deposit which may enable an extension of the pit design to the west.
The study is constrained by the location, depth, and quantity of the resource, and is aligned with the proposed 150 tonnes per hour wash plant (CHPP).
On April 13, 2016, the ECJV reported JORC 2012 compliant 4.75 million tonnes in indicated resources and 8.1 million tonnes in inferred resources at Nuurstei.
The conceptual mine plan based on the geological model produces Run-of-Mine (ROM) coal within the minable pit shell based on 47% from indicated resources, 31% from inferred resources and 22% from areas adjacent to the existing resource, with potential to add to near surface mineral resources.
The area considered to have potential for economic open cut mining was defined by the sub-crop of AA seam group to the north, seam depth and the tenement boundary to the south and east. This will be a target of the drilling and sampling program.
Coal from the Nuurstei open pit is expected to be supplemented by purchases of raw coal from a nearby mine. This coal has been tested by the company and has similar hard coking coal characteristics. The company is in advanced negotiations with the owner of this mine regarding the purchase of this coal and general cooperation.
The study assumes that a modular 150 tonne per hour wash plant will be established on site. The wash plant will have a modular design that can be moved at the end of Nuurstei’s mine life to the Ovoot Coking Coal Project or another satellite development. Bulk samples have been sent for wash plant design.
A preliminary internal project development time line shows first production is possible within 12 to 15 months, subject to permitting and funding availability.
The study along with preliminary logistics analysis suggest an internationally competitive delivered cost onto Chinese rail for washed hard coking coal based on owner miner assumptions. Given medium term price expectations, the study provides encouragement for ECJV to complete feasibility work and firm up operating and capital assumptions.
The Bluefield study supports further targeted expenditure on progressing the project so that an investment decision towards mining can be made.
ECJV is engaged in discussions with Mongolia-based mining contractors on a schedule of rates so that a comparable contractor cost model can be assessed. It is also engaged in a discussion with the potential provider of a modular wash plant solution and has been provided with coal sizing and washability data to complete this work.
Conversion of the Nuurstei exploration licence to a 30 year mining licence is well advanced as the company works towards a potential operational start in 2018.
Aspire has agreed with Noble Group to extend the exercise date for the option to acquire Noble’s beneficial 45% interest in Nuurstei from March until June 2017.
Aspire’s managing director David Paull said, “The Nuurstei project provides a potential path to production and associated rail connectivity and a long-term cashflow source while the company continues to evaluate the world-class Ovoot project. Nuurstei also provides the opportunity to generate useful operational and logistics knowledge to assist in development of the much larger Ovoot project. Nuurstei could also benefit through future access to the planned Northern Rail Line 70km to the south.”