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Equus Mining acquires 51% of Chilean thermal coal explorer

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Equus Mining (ASX:EQE) has earned a 51% interest in Chilean explorer Andean Coal via an agreed $200,000 expenditure.

Equus also has the option to purchase the remaining 49% for a further $200,000 in shares at a fixed price of $0.0125.

Andean hold exploration licenses covering three strategic project locations within the Magallanes Basin, recognised as the largest known coal occurrence in Chile.

These licenses are centered over the main coal bearing unit, the Loreto Formation, which extends over a distance of 200 kilometres.

Additional exploration licenses applications have now been made bringing the total area under control to over 300 square kilometres.

This makes making Equus the largest holder of potentially open pit-table coal resources in Chile.

The three project areas may host shallow dipping coal deposits suitable for bulk open cut extraction as indicated by a combination of coal outcrop, float and intercepts in oil and gas wells, as well as regional work done by BHP and Chile’s state owned petroleum company ENAP.

Of the three coal projects, the Mina Rica project is particularly strategic given its location adjacent to the exhausted Pecket mine.

Existing idle infrastructure including a ship loader and mining equipment means low capital costs and direct ship loading from mine and an anticipated low strip ratio means low operating costs.

Currently there is just one operating opencut coal mine in Chile and the potential to replace thermal coal imports and forecasted strong demand growth of thermal coal by domestic power producers provides an opportunity for new coal projects.

Last month, Equus raised $125,000 at $0.01, and is capitalised at $3.5 million.

 

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Quick facts: Equus Mining Ltd

Price: 0.0165 AUD

ASX:EQE
Market: ASX
Market Cap: $23.24 m
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