The Asia Miner

JAN-MAR 2019

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

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Page 25 of 51

the asia miner • volume 16 • issue 1 24 REGIONAL FOCUS: Central Asia & Mongolia Aspire Mining has announced in its Q4 2018 report the compleঞon of US$15 million strategic financing, enabling the company to immediately commence the Ovoot Early Development Project Pre-Feasibility Study and a scoping study on road routes, construcঞon and logisঞcs costs. Aspire Mining, focussed on the exploraঞon and development of metallurgical coal assets in Mongolia and the rail infrastructure required to bring producঞon from these assets to market, is a 100 per cent stakeholder in the large-scale, world class Ovoot Coking Coal Project, and holds a 90 per cent interest in the Nuurstei Coking Coal Project. OEDP PRE- FEASIBILITY STUDY The Pre-Feasibility Study is being conducted by Ferrostaal Mining Services (FMS) based on the exisঞng Ovoot resource model and focusing on a thick low ash part of the Upper Seam, which commences approximately 40 metres below surface. The operaঞon is expected to be a low strip raঞo open pit mine producing relaঞvely low ash high yielding coking coal. The purpose of the OEDP is to accelerate mining at Ovoot while the Company's rail subsidiary, Northern Railways LLC, conঞnues to pursue the required approvals and funding for the construcঞon of a 547-kilometre rail line from Erdenet to Ovoot. The low strip raঞo and high yielding nature of the OEDP targeted area is expected to offset the higher trucking transport costs to the exisঞng rail head at Erdenet. Ulaanbaatar Railways JSC (UBTZ), the operator of the Mongolian rail system, has confirmed that it has the capacity to transport between 3 and 4 Mtpa from the Erdenet railway staঞon from 2020. NORTHERN RAILWAYS LLC During Q4 2018, the company conঞnued to progress the Erdenet to Ovoot Northern Rail Project. As announced on 29 October 2018, rail subsidiary, Northern Railways LLC, received a Preliminary Economic Assessment (PEA) for a 238.6k kilometre rail extension from the Ovoot Coking Coal Project to the Mongolia- Russia border port of Arts Suuri. The PEA confirms that a sequenঞal development of the Ovoot to Arts Suuri rail extension, and connecঞon to markets beyond, would yield material long term benefits in expansion and diversificaঞon of both rail and coal income, as well as delivering a generaঞonal dividend and benefit to Mongolia and its people. SHORTAGE OF FAT COKING COAL IN CHINA Aspire Mining commissioned and received a markeঞng study from Fenwei Energy Informaঞon Services, a leading expert on the Chinese steel industry and the associated coking coal market. The results of this study were released on 16 January 2019. Fenwei's report forecasts a relaঞvely balanced overall Chinese metallurgical coal market through to 2025 but with rising demand for quality 'fat' coking coal of the type that will be produced by the OEDP. Aspire's Chairman Mr David Paull noted that "the targeted 3 to 4 million tonnes per annum of washed fat coal producঞon from the Aspire OEDP1 will go part of the way to meeঞng this deficit." China's Hebei Province is forecast to provide the highest value markets for Ovoot fat coking coal, with a long- term price forecast range of Rmb 1,217 (US$176\t) to 1,307 (US$191\t) per tonne delivered to customers in the Hebei Province. While the Fenwei Report focused on the Chinese market place, given the locaঞon of Ovoot in the north of Mongolia, there are also viable markets in Eastern Europe, Russia and the Russian Far East with new lower rail tariffs being offered by Russian Railways. Fundamental to the OEDP strategy is the construcঞon of a road to enable the haulage of coal from Ovoot to Erdenet. Studies on alternate routes and discussions with local authoriঞes and communiঞes have commenced. The results of the OEDP Pre- Feasibility Study and other studies are expected to be available for announcement in February 2019. Aspire Mining delivers Q4 2018 report Ovoot Basin Tenement Outline and Mining Licences. Image ©Aspire Mining

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