The Asia Miner

JAN-FEB 2018

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

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12 | ASIA Miner | Volume 15 • Issue 1 | 2018 ASPIRE Mining believes A$16.5 million raised in a fully underwritten rights issue will enable it to expedite development of the Nuurstei Coking Coal Project. The company aims to put the 90%-owned project into production within 18 months. The next step is a $2 million drilling and exploration program, with the aim of increasing resources and establishing a reserve, including con- version of inferred resources to the indicated category. A new resource model is expected to be completed during the current quarter. Capital costs for development have been further refined, with the revised estimate of US$13 million to US$14 million to be confirmed in a feasibility study. The studies aim to confirm an economically viable mining opera- tion commencing within 18 months dependent on analysis of drilling results, future positive economic studies, granting of necessary ap- provals and licences, and any further required funding in addition to but not limited to that provided by other possible sources, such as coal pre-sales, contractor funding and exercise of options. While the project can commence as a road-based production op- eration, access to the proposed Erdenet to Ovoot Railway provides the potential for further reduced transport costs. Noble Group took part in the rights issue and has subsequently in- creased its interest in the company to 19.9%. Supplemented by an A$190,000 payment to Noble from the funds, Aspire has reduced its debt to Noble by A$3.75 million. This completes the first of a series of transactions designed to reduce the US$6.65 million debt owing under the Noble debt facility to US$1.8 million. Aspire's managing director David Paull said, "The underwriting was supported by a strong panel of institutional sub-underwriters seeking to position themselves as shareholders and we welcome them in that capacity. Our focus is now squarely on confirming the feasibility and commencing development of Nuurstei." In October 2016, the company received a mining licence covering 860.91 hectares of the project and providing Aspire with a minimum 30 year tenure over the area. David Paull said, "This vindicates our decision in June 2014 to look to add a new coking coal project which is not rail dependent and the decision in July 2017 to exercise our option to move to a 90% interest." ASPIRE Mining and its subsidiary Northern Railways LLC have entered into a binding Memorandum of Understanding with China Gezhouba Group International Company Lim- ited (CGGC) to advance the Erdenet-Ovoot Railway Project as part of the Northern Rail Corridor. CGGC has agreed to complete the second and final stage of a bankable feasibil- ity study by March 31, 2018. In return, Northern Railways has agreed to seek to include CGGC along with China Railways Construction Bureau 20 Group to jointly work on the design, procurement and construction of the project. If CGGC is not included in this process, Northern Rail- ways has agreed to compensate CGGC for work performed on the feasibility study. The MoU also sets out a pathway for development of the project as well as the potential extension from Ovoot to the Mon- golian/Russian border. To this end, CGGC have expressed a will- ingness to assist Northern Railways seek in- vestors to fund the corridor. It also intends to support Northern Railways' efforts to extend the corridor to eventually connect to Russia at the Arts Suuri border and to assist Aspire source investment to fund development of the Ovoot Coking Coal Project. The Erdenet-Ovoot Railway is a Pub- Aspire funds to expedite Nuurstei Agreement on Northern Rail study The proposed Northern Rail Corridor extends west from Erdenet in Mongolia's north. lic Private Partnership with the Mongolian Government. Northern Railways as conces- sionaire has the right to build, operate and then transfer 100% ownership of the railway to the government. Under the concession agreement at least 30% of the sub-contract work needs to be allocated to Mongolian construction companies and suppliers. Meantime, Noble Group has bought an additional 10% stake in Northern Mongo- lian Railways Limited (NMRL), a subsidiary of Aspire, for US$1.4 million. NMRL owns a concession to build, operate and transfer the railway through its subsidiary Northern Railway LLC. The consideration was satisfied through the conversion of debt owed to Noble's wholly owned subsidiary Noble Resources Interna- tional Pte Ltd (NRIPL) by Ovoot Coking Coal Pte Ltd, a subsidiary of Aspire. NRIPL's share- holding is raised to 20% and NMRL becomes an associated company of Noble.

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