Blackham Resources Limited (ASX:BLK) June 2011 Quarterly Report
Perth, July 28, 2011 AEST (ABN Newswire) - Australian energy company, Blackham Resources Limited (Blackham) (
ASX:BLK) continues to advance the development of the Scaddan and Zanthus Coal to Liquids ("CTL") projects.
The Blackham Board is very pleased to report the following highlights during the quarter:
HIGHLIGHTS
- Scaddan resource statement revised to over 1 billion tonnes
- The current combined resources equate to approximately 40 years worth of feedstock based upon a 60,000 barrel per day CTL facility
- Scaddan West coalfield remains open to the north
- Preliminary Processing Study underway to confirm oil yields
- Confirmation drilling results at Zanthus suggest higher energy zone within the coal seam
- Current diesel and crude oil prices offer robust operating margins
- Existing resources offers first rate leverage to increasing crude oil and diesel prices
The Scaddan and Zanthus Energy Projects, located near Esperance, Western Australia, contain world scale coal deposits on 1.4 billion tonnes with over 10,600 PJ of energy at shallow depth and very low mining costs. The project has the potential to produce 860 million barrels oil equivalent, consisting mainly of a clean diesel, as well as additional power available for the region.
The Scaddan Energy Project is surrounded by complimentary infrastructure approximately 60 kilometres north of the town and major port of Esperance and 10 kilometres east of the Esperance to Kalgoorlie highway, gas pipeline and railway line. Blackham has large landholdings in the Esperance region.
Revised Coal Resources
During the quarter, Blackham announced and upgrade to its Scaddan coal resource. Blackham now manages a combined coal resource of 1.4 billion tonnes estimated in accordance with the JORC Code. Blackham's attributable resource is 1.1 billion tonnes of coal.
Scaddan Coal Resource
Both historical and recent borehole data at Scaddan was reviewed by Runge to calculate the resources contained within the tenements. The data from the drill programme completed in December 2010 has now been included in the reported resource estimates.
The Scaddan West coal seam now extends over 35 kilometres in length, is still open to the north and is up to five kilometres wide in places.
Thickness in the Scaddan West area varies from up to 19m, thinning rapidly at the edges of the body and around topographic highs. The main seam LGA averages 7.5 metres in thickness and contains 87% of the total coal resource.
The Scaddan resource estimate in Table 1 (see link at the bottom of the release) is reported on a 56% moisture basis and an approximate relative density of 1.2. No thickness or quality cut-offs were applied to the Resource Estimate due to the lignite having reasonable prospects for eventual economic extraction as outlined in the Australian "Guidelines for Estimating and Reporting of Inventory Coal, Coal Resources and Coal Reserves". Exploration drilling, to define the Scaddan lignite deposit is based upon the historical drill holes and recent drilling programmes over the last three years. It includes a total of 1,547 boreholes, 311 of which cored, and 1,236 drilled as open holes.
For more information on the above please see the ASX announcement of 21st June 2011.
Successful Zanthus drilling results
During the quarter, positive drill results were reported from the infill drilling programme at the Zanthus projects near Balladonia, Western Australia. The air core program was aimed at confirming the coal seam quality in the existing resource area.
The drilling results confirm the coalfield extends over 10km in length. The best intercepts are seen in Table 3 (see link at the bottom of the release).
The infill drilling within the resource area has added confidence to the existing resource model (last updated July 2009). The current drilling programme has confirmed the coal seams are thickest in the centre of the coal deposit. For full drilling results please see the ASX Announcement dated 26th July 2011. Drilling suggests the average energy content for the middle of the Zanthus coal seam maybe up to 49% higher than previous resource modelling.
Coal Upgrading
Further coal upgrading testwork was conducted during the quarter. The drying test work concluded it was possible to remove most of the moisture in the lignite and significantly improve energy levels in Scaddan coal. Previous test work has suggested that up to 99% of the chlorine and sodium in the coal can be removed by washing. The results of this test work significantly increases the quality and energy content of the lignite.
Preliminary Process Study
Following the completion of successful testwork during 2010, Blackham has begun a preliminary process study (PPS). Over the last 2 years Blackham and its consultants have collected coal gasification feed specifications and expected process performance efficiencies.
Stage 1 of the PPS has been completed. Process flow diagrams that included feed pre-treatment requirements for a short list of six gasification technologies were prepared to produce low temperature Fisher Tropsch (LTFT) diesel and other oil products from Scaddan coal.
The second phase of the PPS is well underway and is designed to:
- Prepare an overall mass and energy balance (MEB) model suitable for comparing the equipment requirements, yields and materials usages for each of the gasifier technologies to be assessed.
- Trial calculation test the gasification technologies for which operating data is available. The MEB is to be based on the production of LTFT fuels.
- Assess the proven process options available for reducing, were necessary, the Scaddan coal moisture, ash, sodium and chlorine levels to those specified by the six gasification technology vendors.
- Include a comparison of the pre-treatment process flow diagrams, mass and energy balances, oil yields and advantages and disadvantages of each short listed technologies.
The process flow sheet for the production of LTFT diesel and naphtha from Scaddan coal was prepared in sufficient detail for providing the key streams required for the MEB analyses. This included process units for the reduction, were necessary, of moisture, ash, sodium and chlorine as specified by the selected gasification technology providers.
Potential Oil Production
The Scaddan and Zanthus Energy Projects have a combined coal resource of 1.4 billion tonnes containing over 10,600 PJ of energy and potential for 860 million barrels of oil equivalent mostly in the form of clean diesel. Blackham's attributable resource is 1.1 billion tonnes of coal.
There is also additional production potential from the existing inventory coal which is currently estimated at 0.66 to 1.08 billion tonnes of lignite at the Scaddan and Zanthus projects.
The current Scaddan and Zanthus resource equates to 40 years worth of feedstock for a 60,000 barrel per day potential CTL facility. The initial Scaddan mine plan also confirms most of the resource in the pit area converts to mineable tonnes. The current pit shell would also allow for greater than 20 years worth feedstock for a 40,000 barrel per day operation. Further drilling of the Scaddan deposit is planned to increase the potential capacity of the project.
Diesel Market and Crude Oil Markets
Tapis Crude Oil prices and Perth Diesel Terminal Gate Price (TGP) are now US$122/bbl and US$149/bbl, respectively.
Perth diesel prices have averaged US$142/bbl during 2011. These diesel prices provide robust operating margins for the Scaddan Energy Project when compared to a US$47/bbl operating cost from the Scaddan scoping study. At current oil prices the Scaddan CTL facility has the potential to provide robust operating margins over a 40 years period, producing 19 million barrels of oil product annually.
Access to the goldfields diesel market for the Scaddan Energy Project also gives Blackham a competitive advantage. Diesel prices in the goldfields region are higher than the Perth TGP.
The Scaddan CTL project offers Blackham shareholders significant leverage to rising energy prices as world economies increase their economic growth.
Corporate
Blackham's market capitalisation is currently $9.3 million based upon a share price of 24 cents per share. The enterprise value of Blackham's coal projects equates to just 0.7 cents per tonne of coal.
The Blackham board continues discussions with various interested potential strategic partners with a view to development of the Scaddan CTL Project.
For the complete Blackham Resources quarterly report ended June 2011, please view the following link:
http://media.abnnewswire.net/media/en/docs/68698-1001422.pdf
About Wiluna Mining Corporation Ltd
Wiluna Mining Corporation (ASX:WMC) (OTCMKTS:WMXCF) is a Perth based, ASX listed gold mining company that controls over 1,600 square kilometres of the Yilgarn Craton in the Northern Goldfields of WA. The Yilgarn Craton has a historic and current gold endowment of over 380 million ounces, making it one of most prolific gold regions in the world. The Company owns 100% of the Wiluna Gold Operation which has a defined resource of 8.04M oz at 1.67 g/t au. In May 2019, a new highly skilled management team took control of the Company with a clear plan to leverage the Wiluna Gold Operation's multi-million-ounce potential.
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