Viking Ashanti is a step closer to acquiring the North Mongolian Berkh Uul coal project, after the board of Auminco Mines Ltd granted approval to accept an off market takeover offer by Viking.
The Berkh Uul bituminous coal project in Northern Mongolia is an advanced coal project that can be developed through to production in 2016.
The project is 40 km from rail access to domestic and Russian off-take markets, in close proximity to water, infrastructure and transport and within 20 km of the Russian border.
A new inferred coal resource of 38.3 million t has been reported for the Berkh Uul deposit in March. The resource estimate, completed for Auminco by RPM, consists of 21.4 million t of Indicated resources, and 16.9 million t of Inferred resources.
Coal resource estimate
The resource estimate was based on geological, geophysical, drilling and coal quality information. It includes results from 45 diamond drill holes, completed by Berkh Uul’s previous owners, and Auminco.
The resource model has outlined multiple shallow coal seams with individual seams varying from 0.6 m to 4.5 m thick over a strike length of 3 km, extending to a maximum depth of 200 m below surface.
Start up project
Commenting on announcement of the resource estimate, Viking chairman, Jack Gardner, said: “Berkh Uul provides a perfect start up project in Mongolia for the merged entity, with anticipated low capital cost, low initial operating cost and no infrastructure needs. Close to the Russian border and with rail access within 40 km, the existing Mongolian and Russian markets for our good quality, unwashed coal are readily available. We expect that the resource will be increased by further step-out drilling, which would provide the basis for a long life open cut mining operation”.
Viking has received shareholder approval for the takeover, and will look to a capital raising of a minimum US$ 3 million.
Edited from various sources by Katie Woodward
Read the article online at: https://www.worldcoal.com/coal/24032014/viking_to_acquire_mongolian_coal_assets_648/