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Aspire Mining's Ovoot project in Mongolia set to become one of world's largest coking coal mines

Published: 12:58 24 Jun 2011 AEST

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Aspire Mining (ASX: AKM) has increased production expectations for its wholly-owned Ovoot Coking Coal Project in Mongolia, positioning it as one of the largest coking coal mines globally.

The coal washability test results have now been collated from 90% of samples taken from the 2010 exploration program and confirm very high theoretical 80% yields at an 8% ash content, making it potentially the lowest ash coking coal product in  Mongolia.

The company's production target for Stage 2 has increased to 12 million tonnes per annum (tpa) from 10.5 million tpa, and there is potential for reduced capital and operating costs.

Ovoot is located in the north of Mongolia about 500 kilometres west of the rail connection at Erdenet. A railway joining Ovoot and Erdenet has been proposed.

David Paull, Aspire's managing director, said “it is clear from the results that coal from some areas of the deposit may not need to be washed.

"While this will result in lower operating costs and less required coal washing capacity, it also means potentially higher committed tonnage for the proposed Ovoot to Erdenet rail line.”

Aspire has entered into an agreement with coal processing and engineering specialist Sedgman Limited (ASX: SDM) to assist with an initial wash plant scoping study.

Aspire is considering a two stage development of the Ovoot Coking Coal Project.

Stage 1 is a small scale project (0.5 to 1 million tonnes per annum) targeting a Direct Ship Ore (DSO) operation whereby ore would be trucked from site to the nearest rail head at Erdenet and then transported via railto eastern Russian ports or south along the Trans Mongolian Railway to China.

The aim of Stage 1 is to demonstrate to potential customers the ability of the company to deliver product consistently along the extended logistics chains and to demonstrate the benefits of blending Ovoot’s quality coking coal.

There are currently three drilling rigs on site working on infill resource drilling, geotechnical drilling and water monitoring bores as well as exploration drilling further into the Ovoot Basin.

The company expects the study will be completed in July 2011 and following this a scoping study for the larger Stage 2 will commence.

Stage 2 is based on the establishment of a railway from Ovoot through Moron to the nearest existing railhead at Erdenet. Work has already commenced on infrastructure, mining and environmental studies in support of the Stage 2 scoping study.

Stage 2 also includes the aforementioned initial wash plant scoping study and is expected to be completed by the end of 2011.

Just eight months after acquiring the Ovoot Coking Coal and the Nuramt Coal projects in Mongolia, Aspire Mining (ASX: AKM) defined an initial maiden 330.7 million tonnes JORC coking coal resource at Ovoot in October 2010.

Over 80% of the resource is in the measured and indicated categories, and 75% of the coal resource is above 250 metres vertical depth, a large scale open pit mining becomes a distinct possibility.

The Ovoot Coking Coal project encompasses an area of approximately 509 square kilometres, with only 10% of the project area being drilled to date, allowing for a potentially significant increase in the JORC resource

In other news, Aspire has appointed Wood Mackenzie as its marketing consultant and will assist Aspire to determine target product specifications for the Ovoot project and maximizing overall project value.

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