The Asia Miner

JAN-FEB 2017

The ASIA Miner - Reporting Important Issues to Mining Companies in the Asia Pacific Region

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Page 19 of 103

18 | ASIA Miner | Volume 14 • Issue 1 | 2017 A LARGE proportion of the deposit at Aspire Mining's Nuurstei Coking Coal Project can be mined economically in an open pit. Modelling carried out during preliminary pit optimisation uses in- dicated and inferred resources as well as a range of coking coal prices. The optimisation work was carried out by the Ekhgoviin Chuluu Joint Venture (ECJV) in which Aspire and the Noble Group both own 50%. The ECJV has a 90% interest in Nuurstei in Mongolia's north and Aspire has an option to purchase Noble's 50% interest which is to expire in March 2017. The optimisation work combined with strong coking coal pricing provides encouragement for Aspire and the ECJV to complete fur- ther commercial and feasibility studies. Earlier in 2016 Aspire released a JORC 2012-compliant resource statement that reported 4.75 million tonnes in indicated resourc- es and 8.1 million tonnes of inferred resources based on a report from independent geologists, McElroy Bryan Geological Services (MBGS), and incorporating results of work completed in the 2015 and 2015 exploration drilling programs. Aspire plans to complete additional drilling to upgrade the inferred resources to the indicated category and to test deposit extensions being undertaken by MBGS. The process is also under way to con- vert an exploration licence to a mining licence. The ECJV has agreed to commence a scoping study for Nuurstei with an international mining contractor assisting in providing mining coasts for a proposed mining schedule. Nuurstei is 10km south of the Khuvsgul aimag capital of Moron and lies in close proximity to a sealed road connecting with the Erdenet connection of the Trans-Mongolia Railway. The project is also well placed to be an early user of the proposed Northern Rail- way Project which extends rail from Erdenet west to Aspire's Ovoot Coking Coal Project and then northwest to the Russian city of Kyzyl. Nuurstei is viewed as a low capital cost starter project which could assist with development of the much larger Ovoot project, 160km further to the west. Aspire has recently received interest to invest in the company and completed an equity raising of up to $320,000 comprising a place- ment and option exercise. Up to $220,000 worth of shares will be placed to a new investor. Director and substantial shareholder Neil Lithgow has also exercised $100,000 worth of options. THE first stage feasibility study for the Northern Rail Corridor in Mon- golia has concluded that the project is financially feasible. The study, which was prepared by China Railway First Survey and Design In- stitute Group Co Ltd (FSDI), covers the Erdenet to Ovoot section. It demonstrates that the first stage is consistent with Mongolia's mineral resource development strategy to be supported by growth in rail infrastructure, and will play a significant role in regional and social development. It says the project is necessary and is recom- mended to be implemented as soon as possible. FSDI is a subsidiary of China Railways Construction Corporation and is the nominated rail engineer for the rail project under the con- cession granted to Northern Railways LLC by the Government of Mongolia. Northern Railways is the rail subsidiary of Aspire Mining, which owns the world-class Ovoot Coking Coal Project adjacent to the proposed line and has a 45% interest in the smaller Nuurstei Coking Coal Project which is well placed to be an early rail user. The capital construction cost is estimated at US$1.25 billion plus contingency for a 20 million tonnes per annum capacity single line at current exchange rates. This compares with the 2013 pre-fea- sibility capital cost estimate of US$1.2 billion for a 12 million tonne line. The study includes: • Two locomotive service depots as well as insurance and service costs not included in the pre-feasibility scope; and • Provision for a number of tunnels, some of which may not be necessary after a final feasibility study is completed. The study noted that planned capacity upgrades to the Erdenet to Salkhit line and Trans-Mongolian Railway will be needed to cope with the increased freight volume. Northern Railways now has the opportunity to continue its review of the study before committing to the final stage feasibility study, which will take around six months. The study will be used by China Development Bank and other Chinese banks in assessing invest- ment in the railway. This study follows preparation of a high level study by rail logistics consultant TransCare which shows the Northern Rail Corridor from Erdenet to Kyzyl would be potentially the quickest and lowest cost rail path for trade between northeast China and Europe. Nuurstei open pit has economic potential Study shows Ovoot rail section is feasible The proposed Northern Rail Corridor in Northern Mongolia is intended to increase trade between China, Mongolia and Europe.

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