Jameson Resources
Jameson Resources has entered into an option agreement to acquire the Basin Thermal Coal Mine (“Basin”) located in British Columbia, Canada. Basin has a large resource base of 124 million tonnes of raw coal with significant exploration upside. The Company is in the final stages of a feasibility study to recommission the existing mine at an expanded production rate between 500,000 and 700,000 tonnes per annum. Feasibility will be completed in the March quarter of 2010 and pending a decision to mine, production could commence by late 2010. Preliminary estimates support a cash operating margin of approximately $US20 per tonne based on 2010 futures contract pricing of thermal coal.
Jameson Resources finalising feasibility at Basin Thermal Coal Mine
Jameson Resources (ASX: JAL) is preparing to wrap up the company's feasibility on expanded mine case at the Basin Thermal Coal Mine in British Columbia, Canada next month, according to its latest quarterly report.
The Company together has identified opportunities for revised operating cost assumptions in an expanded mine case scenario with a relatively minor impact on start up capital.
As such, it has revised the brief with its consultants Norwest Consultants to determine and complete feasibility at the optimal level for start up production for the project anticipated to be in the range of approximately 500,000 tonnes or greater per annum.
Subject to reserve definition and amendments to the existing mining permit, the Company is aiming towards ramping up from the initial permitted small mine rate of 250,000 tonnes per annum to a targeted rate in excess of 500,000 tonnes per annum.
Feasibility will be completed before end of Q1 2010.
Preliminary estimates of the capital required to refurbish the existing wash plant suggest that the construction of a more efficient larger capacity plant will deliver enhanced project economics.
Advanced engineering studies on a new wash plant facility designed to produce a thermal product at 12.5% ash or both a thermal coal and pulverised injection coal (“PCI”) product are in progress.
The outlook for thermal coal prices has improved significantly with Newcastle futures contracts for delivery late 2010 just under US$100/tonne and over US$105/tonne for delivery in 2012 (ICE Europe 19th January 2010).
Chinese domestic prices are approaching US$115/tonne, providing further incentive for imports and thereby placing upward momentum on world prices.
Preliminary estimates support cash operating margin of US$20 per tonne
Basin is located 30km northwest of Princeton, British Columbia.
Basin is the closest mainland coal project to the Western Canadian ports and has good rail and road access with significant available capacity. Prospective buyers of thermal coal include international utilities and local cement manufacturers.
Discussions with both potential overseas and domestic off‐take partners have been positive, with interest confirmed in the thermal coal produced from the Basin Coal Mine. Exploration Program
The Company has completed a diamond drilling and trenching program at Basin during the quarter.
Mining and processing operations anticipated to commence within 12 months of decision to mine.
At 31 December 2009 the Top 20 shareholders held approximately 51% of the capital of the Company and the Company had a cash balance of $2.6 million.
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Other Jameson Resources articles
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24/11/09 Jameson Resources targets Feasibility Study completion for Basin Coal mine in 1Q 2010
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13/08/09 Jameson Resources a star performer on ASX, with Basin Coal Mine recommissioning plans in Canada
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22/07/09 Jameson Resources increases thermal coal resource at Basin Coal Mine to 117 million tonnes
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04/06/09 Jameson Resources raises $1.7 million to progress restart of Basin Coal Mine in Canada
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