ASPIRE Mining has entered into a non-binding Memorandum of Understanding (MoU) with New Asia Group, owner of the Zavkhan Power Station, to potentially supply oxidized coal from the Ovoot Coking Coal Project in northern Mongolia. The MoU covers a possible commitment of New Asia to annually purchase up to 250,000 tonnes.
It also involves Aspire cooperating with New Asia to develop necessary transmission infrastructure connecting the Ovoot project directly with the power station and the supply of 35MW of power annually to the project.
Zavkhan Power Station is about 70km to the south of the Ovoot project. New Asia has received a concession to build, own and operate the power station to supply northern Mongolia with power. It is currently constructing the plant which is expected to be commissioned in late 2015.
The Ovoot project will produce small quantities of oxidized (non-coking) coal as part of its mine plan, which would otherwise have been considered waste material. This coal is not included in the project's 255 million tonne JORC 2012 probable coal reserves.
Meanwhile, following Aspire's acquisition of a 50% interest in the Ekhgoviin Chuluu Joint Venture (ECJV) in June and a re-evaluation of historical exploration work, the ECJV has agreed to initiate an exploration drilling program at Nuurstei Coal Project in northern Mongolia.
ECJV is a partnership between Aspire and Singapore-listed Noble Group, and holds 60% of the Nuurstei project which could be increased to 90% upon achievement of development milestones. Drilling will target the northern part of the tenement area and will initially consist of 20 holes at an average 100 metre depth.
An 11 hole drilling program was completed over the area in 2011 with most drilling focused on the northern region. After reviewing available data, the ECJV approved the new drilling program with a budget of $500,000. It is designed to confirm resource continuity to enable preliminary economic assessment and to provide samples for test work.
Drilling is expected to be completed by the end of September with laboratory analysis expected in the December quarter. Results will be used to prepare a pre-feasibility study, which will allow for the grant of a mining licence and for completion of a general environmental impact assessment.
After a further review of the geology and the 2011 drilling program, the ECJV believes that Nuurstei presents a possible opportunity for a small-scale road-based operation due to the potential for near-surface quality coking coal. It is about 10km southwest of Moron, capital of Khuvsgul province. A paved road is being constructed between Moron and Erdenet, where existing rail infrastructure terminates.