Tigers Realm Coal (ASX:TIG) has entered into a US$5 million leasing arrangement for the supply of a small fleet of mobile equipment to commence early stage development at its Amaam North Project F in Russia.
The remainder of the cost of acquisition, US$3.5 million, will come from cash reserves.
This is in anticipation of a positive outcome for the bankable feasibility study.
The mine development fleet is expected to arrive at site towards the end of the current summer season thereby enabling infrastructure development works to commence late this year.
Upon grant of the mining licence and mine construction permits, TIG will move immediately into mine development and production.
To support the commencement of site works, orders have also been placed for construction of a 100 person accommodation camp and fuel storage facility.
Given the growing number of coal mine closures globally, TIG expects to be supplying coal into an improving market and stronger price environment.
TIG is developing a large new coking coal basin from two deposits with combined Resources of 491 million tonnes.
The Amaam project carries 464 Mt just 25 kilometres from a planned port site and only 8 days shipping to China, Korea and Japan.
Amaam North Project F is a small portion of the deposit, focussed on the Lower Chukchi coals, with a 26.8 Mt total Resource and 35 kilometres from TIG’s existing Beringovsky coal port.
Pre feasibility studies for both projects have been completed and show strong economics.
Notably, one of TIG's directors is Owen Hegarty, the man behind the rise and rise of Oxiana.
TIG’s strategy is to rapidly advance Project F to the production stage, before going on to develop the wider Bering Coal Basin.
TIG is taking a staged approach to this development with Phase 2 being to expand production from the Amaam North Licence block.
Phase 3 is anticipated to be the development of the large scale Amaam coking coal project.
The target date for first production from Project F is H2 2015 with first coal to be shipped in 2016.
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