The company recently received detailed coal quality test work from large diameter core samples which were drilled at Chinook Vicary in Canada in November 2020.
Brown said: “The results confirmed exceptional coke strength results, with CSR values ranging from 67-74%, up significantly from 65% in MR1’s Feb’21 scoping study.
“In addition, the testing confirmed high simulated plant yields (73-81%) with low ash (9.1%), low volatile matter (21.4%) and low sulphur (0.48%).
“As a result, Chinook Vicary is equivalent quality to the Platts Premium Low Volatile Hard Coking Coal benchmark, giving it the potential to sell at parity to current benchmark prices compared to the 6% discount MR1 was expecting.”
Tier-1 hard coking coal
The testwork has indicated premium, Tier-1 hard coking coal and the expected attributes of a typical Chinook Vicary product have been summarised as:
- Low ash content ~9%;
- Low volatile matter ~21%;
- Low total sulphur ~0.50%;
- Low phos in coal <0.070%;
- High rank: RoMax 1.31%; and
- High CSR: 67 – 74%.
Brown said: “Historically, the Vicary mine sold 100% of its product to Japanese steel makers and the new coal quality data not only confirms exceptional quality but also matches what has been mined previously providing product validation.”
Quality coal and location
Brown said: “Following the recent changes in Alberta’s coal policy, we continue to highlight both MR1’s key assets are located on Category 4 lands, and remain unaffected.
“We note Atrum (ATU) still remains suspended awaiting clarification over the impact on its assets on Category 2 lands, which could significantly impact development plans going forward.
“MR1 is now becoming the preferred exposure to an emerging tier-1 HCC project in this significant, undeveloped coking coal field.”
The company expects to release its JORC resource update in the June quarter 2021, and to commence Chinook drilling in the September quarter.
Chinook Vicary – indicative product quality vs Platt’s Premium Low Vol HCC. Source: MR1, S&P Global Platt’s, April 2020.
Better than initial scoping study parameters
Brown said: “MR1’s clean coal results indicate a better coal quality is possible from the Chinook Vicary deposit relative to assumptions used in the February 2021 scoping study.
“The results confirmed exceptional coke strength with CSR values ranging from 67-74%, up significantly from 65% in the scoping study.
“In addition, the testing confirmed high yields (73-81%) resulting in with low ash (9.1%), low volatile matter (21.4%) and low sulphur (0.48%).
“As a result MR1’s Chinook Vicary Project is equivalent quality to the Platts Premium Low Volatile Hard Coking Coal benchmark, giving it the potential to sell at with no discount (vs 6% discount in the Scoping Study).”