Australia's junior explorers - The ASIA Miner

Mongolia
Study confirms Ovoot is financially robust
A PRE-FEASIBILITY study (PFS) for Aspir e
Mining’s Ovoot Coking Coal Pr oject in northern
Mongolia confirms that it is financial robust
as well as technically and commercially
feasible. The PFS used r ecently modelled
open pit probably coal reserves of 178 million
tonnes, which categorized Ovoot as the third
largest coking coal deposit in Mongolia, by
reserves. Aspire to date has only explor ed
20% of the Ovoot Basin.
The PFS is based on a large open pit mine
annually delivering up to 15 million tonnes of
raw coal to coal handling and pr eparation
plants over a 15 year life of mine (LOM), pro-
Aspire’s projects in northern Mongolia and the existing and proposed rail infrastructure.
NEW ASX-listed Mongolian explorer Eumerella
Resources is initially focusing on tungsten exploration
at its licence in northeast Mongolia
but is also seeking other commodities at this
target. The Western Australia-based company
is also seeking other projects in the mineral-rich
country. Eumerella was admitted to the official
list of the ASX on May 3 after raising ar ound
Aus$3.5 million in its initial public of fering. It is
focused on the acquisition and exploration of
mining projects in Mongolia.
Through its wholly-owned subsidiary, Eumeralla
Resources Pte Ltd, the company has
interests in Centreville LLC, which holds a
26 | ASIA Miner | July/August 2012
ducing 153 million tonnes of high quality coking
coal. The attractive economics ar e
driven by LOM 82% average conversion rate
of ROM tonnes to pr oduct together with a
low LOM strip ratio of 7.6bcm of waste per
ROM tonne of coal including pre-strip.
Aspire says mine life and the quantity of
marketable coking coal can be incr eased
through further geotechnical and infill drilling,
underground mining studies and ongoing exploration.
The PFS defines a two stage pr oduction
profile for the project over an initial
mine life of 15 years. Stage 1 involves annual
production of 6 million tonnes of saleable coal
Initial Eumerella focus is on tungsten
granted minerals exploration licence. During
the year ended December 31, 2011, it acquired
the Ovoot licence in northeast Mongolia
from Centreville LLC. Eumeralla then acquired
Centreville on December 31, 2011.
Eumeralla’s licence covers 12,657 hectares
and includes the historical Chuluun Khor oot
tungsten mine which was active between
1945 and 1955. The licence is about 20km
north of the town of Dashbalbar and 85km
northwest of the Solowevsk-Choibalsan railway.
Previous exploration at the pr oject has
defined tungsten targets, but follow-up exploration
has been limited.
delivered by 191km sealed r oad to the new
railhead at Moron before being transported
to end markets from 2016. Stage 2 involves
annual production of up to 12 million tonnes
of saleable coal delivered by rail from Ovoot
to Erdenet before being transported to end
markets from 2018.
The staged development will de-risk the production
ramp-up and enable stage 1 operational
cashflows to underpin a futur e rail spur
line connection from Ovoot to link up with the
multi-user rail line at Moron. Ovoot will generate
substantial cashflows based on its competitive
average LOM operating cost of
US$118 per tonne. Aspire assumes its coking
coal will be sold on a 50/50 basis FOB at Russian
Far East Ports and at the Chinese border.
Using long term applicable coking coal price
estimates of US$200/tonne, a LOM EBITDA
of US$68 per tonne is achieved.
Northern Railways LLC, a special purpose
infrastructure company owned by Aspire, is responsible
for delivering the Erdenet to Moron
multi-user rail line to underpin stage 1 production.
This rail line has an estimated capex of
US$1.1 billion (plus contingency). Ovoot operating
cost assumptions assume rail tariffs on
this line sufficient to support attractive financial
returns to Northern Railways.
Aspire’s managing director David Paull says,
“Aspire is ideally placed to be the leader in unlocking
the emerging northern Mongolian coal
province. The positive PFS underpins our vision
of developing a large-scale coking coal
mine and associated rail infrastructure.”
Eumeralla plans to focus initially on tungsten
exploration, planning a geological mapping
and surface sampling program followed
by geophysical surveys and air core and reverse
circulation drilling to test the anomalies.
The aim of this work is to evaluate the tungsten
potential of Chuluun Khoroot, as well as
exploring adjacent areas of mineralization within
the Ovoot licence. Other commodities
could be targeted at the project in the future.
The Perth-based company has budgeted
exploration expenditure of $1.13 million in
its first year and another $1.03 million in the
second year.