The Asia Miner

SEP-OCT 2014

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

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Page 15 of 91

14 | ASIA Miner | September/October 2014 NEWERA Resources has obtained all approvals necessary to undertake a phase two drilling pro- gram within the northern sector of the Ulaan Tol- goi licence in the South Gobi basin of southern Mongolia. The northern sector of the licence was recently covered by a ground magnetics (GM) survey, resulting in the interpreted identifcation of two substantial sedimentary sub-basins. A 600 metre diamond drilling program is being planned to test a number of coal prospective areas within the two sub-basins and Newera has received an all in quote of US$65,000 to com- plete the program. Currently, inversion modelling of the GM data is taking place which should provide detailed imagery of the basement topogra- phy underlying the GM survey area. There have been six interpreted coal prospective areas (CPAs) identifed within the two sub-basins and these have been designated as 4/1, 4/2, 4/3, 4/4, 4/5 and 4/6. The interpreted limit of depth of sed- iments within the sub-basins is placed at 250 metres. The sub-basin containing CPAs 4/1, 4/2, 4/3, 4/5 and 4/6 is estimated to be up to 9km in length and up to 7km in width. The sub-basin containing CPA 4/4 is estimated to be about 9km in length and up to1.8km wide. Bright black coal has been discovered in a newly identifed sub-basin within a third party licence immediately north of Newera's Ulaan Tolgoi licence and is interpreted to be in-plac- es overlapping the Ulaan Tolgoi northern boundary. The GM survey covered plus-700 line kilome- tres. The survey lines ran north to south in the survey area and were at an east west line spac- ing of 200 metres. The survey commenced on May 25 and was completed on time and within budget by mid-June. Mongolian registered geophysical contracting company Geo-Oron LLC completed the model- ling of the data collected and presented Newera with the fnal images and analysis of the most coal prospective areas. Geo-Oron LLC was specifcally selected by Newera for continuity of local knowledge, work practices and work quality, being the same geophysical survey contractors who recently conducted the ground magnetics survey imme- diately to the north of the JV Ulaan Tolgoi licence and who outlined the new black coal bearing sub-basin in that location. Newera has now spent suffcient funds on the Ulaan Tolgoi project to be entitled to a 51% in- terest in the Mongolian company which holds the Ulaan Tolgoi licence as its sole asset, which means Newera currently holds a right to 51% of the project, earning up to 70%. GUILDFORD Coal's Mongolian subsidiary Terra Energy has executed the frst sales contract for coal produced from Baruun Noyon Uul (BNU) mine in southern Mongolia. The contract represents the frst shipment of 8000 tonnes of coal from the mine to be sent for supply chain and coal wash testing. Once washed, the coal will be delivered to the company's preferred end users in China who will provide further feedback on the BNU prod- uct. The frst trucks were scheduled to leave the mine on August 25 with washing expected to begin thereafter. Further deliveries of coal are also anticipated of about 12,000 tonnes. Guildford Coal's managing director Peter Kane says trucking of the frst batch from BNU is a signifcant milestone. "The Board of Guildford would like to thank all of the project stakeholders for their patience and support leading up to frst sale. The Board is excited about the further development of the BNU mine and exploring the company's other mining licences." Terra Energy controls tenements contained in two projects in Mongolia. The coal projects are in the coal-bearing basins of the South Gobi and Middle Gobi which contain thermal and coking coals. In early July, 2014, the company announced it had secured a haulage permit from the Mongolian Ministry of Roads and Transport which allows trans- port of coal from BNU. The 98km haul road was completed in late 2013. Negotiations for this approval extended over six months and included formal inspections and working committee briefngs. The company is confdent that the transport can be undertaken in a way that is sensitive to the needs of the local communities in the area and protects the environment. The permit cleared the way for coal to be transported along the new road, and subsequently through the Shivee Khuren border crossing in Mongolia and onto Ceke in China. Commercial arrangements are in place for a Mongolian company to transport the coal. Early interest in BNU coal was expressed by a number of Chinese companies, including Shenhua Wuhai, Taixi Wuhai, Jiuquan Iron and Steel Group Gansu, Qunhua Inner Mongolia and Jinda Wuhai. The BNU North Pit operations began early in the June quarter in a reduced operations phase whereby only limited development work was undertaken while awaiting approval of the haul road. Due to the delays operations were further scaled back to a care and maintenance basis in early May which was considered necessary as the operation had suffcient coal on stockpiles and exposed within mining operations to commence trial shipments at short notice. At the conclusion of the trial batches completed ramp-up plans for production will begin. First sales contract for BNU coal Newera Resources' coal project location plan show- ing the Ulaan Tolgoi project, the interpreted limits of the Permian coal prospective South Gobi Basin along with transport infrastructure and Chinese coal usage facilities. Newera plans phase two drilling

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