Quarterly Activities and Cashflow Reports
Sydney, April 30, 2015 AEST (ABN Newswire) - Atrum Coal NL ("Atrum" or the "Company") (
ASX:ATU) (ATRCF:OTCMKTS) is pleased to report the Company's activities for the quarter ended 31 March 2015 in relation to its flagship Groundhog Anthracite Project and the advanced development of the Groundhog North Mine located in British Columbia, Canada.
HIGHLIGHTS
Groundhog Anthracite Project:
Supplementary PFS at Groundhog North Mine Delivers $1.7Bn Post-tax NPV
- Supplementary Pre-feasibility Study (SPFS) delivers improved economics for 5.4Mtpa run-of-mine (ROM) underground operation at Groundhog North compared to original PFS
- Mine life substantially increased from 16 years to 38 years
- FOB cash costs reduced from US$89/t to US$86/t on truck-to-port operation
- Capital required to deliver small scale underground bord and pillar mine (250tkpa) reduced 25% from US$77m to US$58m
- Post-tax NPV10 increased 62% from A$1,040M to A$1,685M and life of mine free cash flow of A$11,159M
Groundhog Marketing and Offtake Negotiations
- MOU and offtake marketing framework agreements have been executed with consumers of high grade and ultra-high grade anthracite in Japan and Korea; discussions also commenced with potential Chinese and Indian offtake entities
Groundhog Project Financing
- Atrum is in advanced negotiations with a select number of resource specialist Private Equity funds and specialist equipment financers and continues to progress discussions with strategic offtake partners from Japan and Korea for a direct equity investment into Groundhog North
- Atrum expects to announce positive news on these negotiations in the next week
Commenting on the quarterly achievements, Executive Chairman James Chisholm stated:
"The year started well with lump anthracite prices strengthening, selling for more than US$210/t as of last month, with upward pressure due to long term declining Vietnamese and Ukrainian seaborne supply. We expect this trend in prices to continue during the course of our mine development. The past quarter has been an active one for Atrum. On the marketing side, in addition to coke replacement, we have identified several high value market opportunities for our ultra-high grade anthracite and these were incorporated in our negotiations with tier one offtake partners. We have secured multiple offtake MOU's with some of the world's largest steel conglomerates as a precursor to binding offtake and a direct project sell down of our first mine, Groundhog North.
"On the exploration front, we have identified potential for multiple mine sites at other areas of Groundhog. Within the Groundhog North zone, we have also identified several new, shallow, low strip ratio, low-cost, surface mining opportunities that would complement the existing Groundhog North Underground Mine. This is an exciting development and has the potential to provide significant upside and low cost expansion possibilities.
"Right now, we are eagerly awaiting the grant of our first permit, which will allow us to deliver trial cargos to equally eager customers later this year. We are also advanced in our process to secure a significant funding package that will allow us to commence development at Groundhog North following receipt of our permits. The next three months will be exciting times and we look forward to keeping you informed as we progress."
To view the quarterly report, please visit:
http://media.abnnewswire.net/media/en/docs/ASX-ATU-717763.pdf
About Atrum Coal Limited
Atrum Coal Limited (ASX:ATU) is a metallurgical coal developer. The Company flagship asset is the 100%-owned Elan Hard Coking Coal Project in southern Alberta, Canada. Elan hosts large-scale, shallow, thick, hard coking coal (HCC) deposits with a current JORC Resource Estimate of 298 Mt (70 Mt Indicated and 228 Mt Inferred). Comprehensive quality testing of Elan South coal on samples from the 2018 exploration program, combined with review of substantial historical testwork data for the broader Elan Project, has confirmed Tier 1 HCC quality.
The initial focus for development is the Elan South area, which is located approximately 13 km from an existing rail line with significant excess capacity, providing direct rail access to export terminals in Vancouver and Prince Rupert. Elan South shares its southern boundary with Riversdale Resources Grassy Mountain Project, which is in the final permitting stage for a 4.5 Mtpa open-cut HCC operation. Around 30km to the west, Teck Resources operates five mines (the Elk Valley complex) producing approximately 25 Mtpa of premium HCC for the seaborne market.
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